Talk or Walk? at Innovation by SIT

As specialists in creative processes and innovation, we have worked with many companies over the last ten years, giving us many years of real experience in creating innovations and actually implementing them on the market. And, after talking to thousands of managers, the situation is clear to us:

Most everyone strongly feels a need to continuously renew their commercial offering and working methods to keep competitive in the market. They follow the modern mantra of ‘differentiate and create value’ and to achieve this, everyone wants to be more innovative.

Indeed they all like to talk the creativity and innovation talk. Most managers agree that innovation is the last stronghold for competing in a global economy. Moreover, they are interested and fascinated by the thought of working systematically with innovation in order to gain a breakthrough to create growth and profitability for their organizations.

We all agree about all this… intellectually. But very few translate this talk into action.

Senior business managers spend much time on creating their business visions, objectives and strategies. These strategies get implemented through a process of taking these important goals for areas like R&D, HR, IT, QA, finance, and production and breaking them down into operative objectives that are delegated, measured and tracked.

But what about innovation?

Most often innovation stays as a fuzzy formulation contained in business or strategy planning. Often these same formulations are then communicated to the market.

Sure, everyone wants to be seen as innovative and pioneering! Obviously, many understand the importance of being able to adapt, innovate and renew. But the gap between cheering and actually doing is just too broad!

That’s the issue – Why so much talk and so little action?

There are exceptions. Electrolux has set up an ‘Innovation Office’ to develop the company’s innovation capability in order to create new commercial opportunities. But again, this is an exception.

If you’re interested, you can do a quick survey yourself: Pick 10 companies who advertise themselves as innovative or creative. Do this the easy way and look at their market communication and their annual reports. Call up to their headquarters’ receptionist and ask to talk to their innovation manager.

You can be sure that few will be able to find someone directly responsible for innovation. They might try sending you to someone at product development, business development or marketing. Very few have a specific person in a role that actively addresses innovation issues throughout the corporation.

Why then, is there such a gap between clear intellectual acceptance of how important innovation really is and actually proactively and systematically working for innovation?

Our experience is that this comes from the basic structures and business cultures in our society.

Just look at some of the major obstacles to innovation:

* Short-sighted business objectives – Blinding focus on quarterly results makes any greater innovation effort too risky. By definition, innovation is uncertain and anyone working on innovation risks missing their quarterly financial objectives – and being disqualified as a leader.

* Standard budgeting procedures – Setting annual budgets prevents companies from taking advantage of new ideas that come up during the fiscal year. Standard budgeting models restrain applying resources and financing for any opportunities that are not planned long in advance.

* Innovation is too vague – People still think of innovation and creativity as something almost mystical, where ‘lightning strikes’ or you have to ‘think outside the box’. Do you say ‘Getting an idea’ or ‘Creating an idea’? In the worst case, you’ve been part of a woolly, embarrassing creative exercise that didn’t lead to anything concrete. As long as you think about innovation and creativity as something fuzzy and uncontrollable, that you can’t direct or do systematically, then you will find it difficult to ‘do’ innovation.

* Lack of knowledge – People don’t know how to run innovation and leaders are educated to be ‘Masters of Business Administration (MBA)’ as opposed to ‘Masters of Business Innovation’. Regardless of how much they talk or write about it, most organizations lack a basic understanding of what innovation really means. This lack of knowledge makes misunderstanding more common. As in ‘Innovation can’t be measured or controlled’; ‘Great innovations can’t result from goal-oriented processes, since they are unpredictable events’; ‘Innovation depends on the right kind of culture instead of the right kind of processes, methods and tools’.

* Consensus – Managers in the certain companies are not allowed to make individual decisions about new investments or high-risk projects. Rather, they have to seek consensus and support among many others. This slows innovative efforts and creates resistance. For example, there is a significant difference between Germany and Sweden about the kind of decision a manager can take in relation to ideas that are not fully spread and supported.

In our next post we will present our suggestions for things that can be done in order to translate the innovation talk into real actions.

This post is based on an article that was originally published at InnovationManagement.se

Orren Shalit is the founder of SIT Scandinavia.

Gunnar Storfeldt is the CEO and a partner in SIT Scandinavia.