As an advisor on corporate innovation, I need to be able to quickly assess the state of corporate innovation in any organisation. Typically, a detailed assessment of a company’s innovation ecosystem can take up to 3 months. This involves the analysis of current blockers and enablers of innovation and coming up with a high-leverage action plan to improve the ecosystem. In the meantime, I found that two questions I ask leaders are a good predictor of how important innovation is considered in their organisation.
In this blogpost I explain how to use those two questions as a proxy to a more detailed assessment.
The time spent by the CEO and senior leadership on innovation is a good proxy to the importance of innovation in the organisation. It can already help you see through any lip service paid to innovation by leadership.
In that sense the time spent by the CEO can be a good predictor of the state of innovation in an organisation. If the CEO doesn’t spend any time on it then it’s probably not that important, so senior leaders will tend to treat it as a secondary topic, and so it will cascade in the whole organisation.
We run regular polls on this question with our clients and beyond, as you can see on this visual of a recent Twitter post by Strategyzer co-founder Alex Osterwalder. Results all lead to the same conclusion. In most organisations today, that time spent by the CEO would not amount to much. And this sends a loud and clear message understood by the whole organisation: if you want to be like me one day, don’t waste your time with innovation.
In your current business, failure can only be the result of bad planning and/or execution. Failure is to be avoided at all costs and punished by leaders.
But when you’re exploring new business ideas with high uncertainty, failure goes hand-in-hand with learning. How else would you learn what works and what doesn’t in a high uncertainty environment? If you can’t fail then you can’t truly explore new business ideas.
So, if the implicit message in the organisation is that 80+% of the innovation projects need to be successful then innovation teams will quickly understand that “failure is not an option”. As a consequence, every innovation team will quickly abandon the exploration of truly transformative ideas and recalibrate to safer plays where success is more likely.
In an organisation that expects 80+% of the innovation projects to succeed, you’re likely to find predominantly “efficiency” innovation projects, which will lead to incremental improvements of the core business but will struggle to deliver new growth.
Only in environments where it’s ok for 80+% of projects to fail can truly radical new ideas be explored, and transformative outcomes delivered over time. That’s why the percentage of failure that an organisation can tolerate will also give an idea of the likely state of corporate innovation in that organisation. And whether truly transformative ideas can be explored.
So far, everyone we’ve met in large organisations wants to be successful. No one wants to commit career suicide. In an organisation where the CEO and senior leadership don’t spend time on innovation to support teams, and where failure is not an option, who in their right mind would take the risk to explore truly transformative ideas or business models.
So, you can make a fairly accurate assessment with those two questions already.
Of course, this is only a temporary way to assess an innovation ecosystem. Those two questions won’t help you identify all current blockers and enablers, and the high-leverage improvement actions that could shift this ecosystem towards better outcomes. But in our experience, it’s been a good way to assess the state of innovation in an organisation early on, and a great way to kick-off critical conversations with leaders on the requirements for world-class innovation.
If you wish to conduct a more in depth assessment of your Innovation Ecosystem, go check out our Innovation Readiness Assessment Program.