The Meetup was held in 3M’s Innovation Center: 40+ participants from a dozen Minnesota-based organizations convened to share and learn from one another how they deal with some common challenges that they encounter while trying to promote innovation. Prior to the meeting, they raised a long list of 67 challenges, but there were many that had some overlap and as the SIT team analyzed them, we realize that the vast majority fall squarely into four main categories.
4 Most Critical Innovation-Related Challenges:
1. How do we de-risk our innovation efforts
“Lack of external leverage; too many options to choose from makes it even more difficult.” Companies are accelerating their front-end efforts; they are producing more ideas and launching more development projects. However, they feel that this only exacerbates the stress of having to decide where to allocate development resources, how to select those products or services with the highest probability of success, and how to manage their launches.
SIT’s take on this: Of course, entering the experimentation funnel with a shorter list of quality ideas that have already been initially vetted by market potential, feasibility, and connection with company strategy will help with resource allocation decision-making early on. Additionally, the shift toward more agile-like approaches, often through Lean Startup, should in principle alleviate this stress, since such approaches dictate that instead of focusing on de-risking a specific “big” idea, one should test numerous MVPs and quickly pivot based on the results of “experiments”.
But it seems to us that although many companies have officially adopted an LSU process, they find it difficult to wean themselves off the habits of testing and seeking a high level of certainty for each specific innovation before launch.
2. How do we change our company’s culture/mindset?
“We need to be focusing on long-term development, not the ‘right now’”. “Internal cultural shift necessary to transform our business model.” The most common task these days goes way beyond launching a product, or even an entire product line. Key words are “culture”, “change” and “transformation”. The desire is to find ways to influence the entire organization, change strategies and business models.
SIT’s take: We’ve seen this process evolve over the past 26 years, from attention to a specific local result such as solving a problem or launching a single product, to the demand to generate an entire pipeline and roadmap, all the way to the current situation, in which CEOs and top management either realize the need or are pressured by their Boards or stakeholders to lead transformational changes in their organizations. This can often lead to futile high-profile and costly changes-for-the-sake-of-changing, but, if well-managed by a committed senior leadership team, innovation can truly transform and invigorate a company. Like all major changes, the transformation needs to evolve over time as short-term milestones are hit at a cadence that the organization can digest while ensuring that the day-to-day routine business that keeps the lights on continues to thrive.
3. How do we accelerate / acquire speed and agility?
“Innovation takes time to hatch. How do we innovate within the fast-paced environment?” Companies are not only pressured to change, but to change faster. This obviously places additional demands on managers, often accompanied by stress.
SIT’s take: A paradox ensues, whereby managers are expected to lead profound transformations, rather than superficial change, which requires time and patience; but, since the environment changes at an ever-accelerating pace – requiring rapid and immediate adaptations – there is less patience and resources for profound long-term change processes to take place. More than ever, small-scale quantifiable value needs to be created as part of a clear plan as to how this accumulated value results in the profound change, which was the original goal.
4. How do we listen and get closer to our customers?
“Doing adequate research to uncover new problems.” “Lack of customer interaction to direct innovation.” After decades of effort to get closer to the client, listen to the Voice of the Customer, observe, empathize, research and analyze, companies still feel that true understanding and insights tend to elude them, and therefore are searching for novel approaches.
SIT’s take: Although true that innovation is useless unless it addresses a customer need, it is a mistake to believe that true innovation is born from listening to VoC. Being attuned to your customers is a necessary but not sufficient condition for innovation success. Instead, we recommend a combination of: a) breaking the more-of-the-same-VoC mold by interacting with your customers proactively through co-creation engagements; b) using structured innovation methods to come up with ideas that are, in turn, validated with customers. Don’t use VoC as the starting point for innovation, but as an assessment tool for the amount of resources to invest in bringing and innovative concept to execution.
To summarize, we found, not surprisingly, a high level of congruence between the most pressing innovation-related issues in a wide variety of organizations and positions. And how some of the ill-advised Common Innovation Wisdom exacerbate, rather than alleviate, many of the challenges associated with innovation.