Innovation Isn’t an Idea Problem, Nor is it a Recognition Problem

In a recent HBR article with the same title, David Burrus argued that Innovation is a recognition problem. He also went on to propose a solution to this problem, one that Rhode Island based Rite-Solutions is already using. The general idea is that people are given a certain fixed amount of virtual currencies (say 10000$) which they can invest in any of the idea that is proposed on their internal idea site. This could eliminate the bias of any one or a set of executives, who are usually responsible for deciding on the feasibility of any particular idea. In my opinion, Innovation isn’t an idea recognition problem either as argued by David. In my opinion, Innovation is a culture problem. No matter how many processes you set-up or programs that you run in your organization to foster innovation, you can truly support innovation only if the entire organization culture supports innovation. Some things that an organization needs to inculcate in its culture to foster innovation in their organization are:

• Clearly define Innovation: Adding new features or functionalities in an existing product or services don’t qualify as innovation. These are product/service improvements and should be treated such. In my opinion, Innovation is only when you are able to create a new product/service, a new way to deliver or distribute it, a new business model, etc.
• Set-up boundaries within which you want to innovate in. It is very well known that we are more creative when we work within a set a boundaries. Still almost all organizations fail to set-up boundary conditions within which they want their employees to think about.
• Transparency in the process: It doesn’t matter how the organization wants to manage the ideas that their employees generate. What matters is that these employees know who/how is their idea being evaluated by. This transparency ensures that employees do know that their ideas will get a fair audit.
• Option for employees to continue to develop their ideas inspite of it not getting through the process: This is another step where almost every organization fails. They have in place an idea management process, they pick the ideas (based on whatever is their criteria) that they want to continue to invest in and the rest of the ideas are rejected. However, history shows that some of these rejected ideas have gone on to become multi-billion dollar enterprises. Instead of rejecting these ideas, organizations can provide an option for the employees to continue to work on their idea based on the following conditions:
  • The organization will provide x% of the funding. The employee brings in the other rest of the funding. They are free to get their share of funding from whatever means that they are able to. The conditions for a successful project is clearly articulated (a big bonus or a share of the new business if it leads to a new LoB).
  • Till the employee is working on the project, he/she stops getting their salaries (Maybe they can provide a small % of salary to encourage more employees to go this route).
  • Once the funding is exhausted, and the employee is not able to procure further funding (internal or external) for the idea, the employee is absorbed back in the organization.
• Rewards/recognition: The rewards and recognition policies also need to be in place. Ideally, this should be a combination of non-monetary and monetary recognition and in that order. The recognitions should not just be limited to those who have had a successful idea. The organization should also celebrate the employees who tried to innovate and were not successful. Both the successful and the not so successful people should get to share their story with the organization. 
• Connect & Combine: Organizations should be willing to support and nurture networking across organization. One of the most important attribute to build a culture of innovation is for your employees to be exposed to different points-of-views. They should be able to build a network of people who are willing to mentor, partner and promote the employee when needed.
• Executive Buy-In: One of the most critical aspects of building a culture is executive buy-in. It is the CEO’s job to ensure that there is continuous investment and progress made in building and sustaining the culture of innovation. It is his job to define the boundary conditions. It is his job to not only celebrate the organization successes but also to talk about their failures and the lessons learnt from them. This is one single action that can go a long way to building the culture of risk taking and innovation.

These are some of the steps that an organization can take to create a culture of innovation. Unless employees see this culture, no organization will be able to sustain their ability to innovate on a continuous basis. What do you think about innovation and how to build the capability of sustained innovation in an organization? Do share your thoughts on the same so we can continue the discussion. You can connect with me on twitter, linkedin, facebook or email. You can also subscribe to my weekly newsletter here.