At a recent dinner with an old colleague, I was surprised to hear them bemoan that “the age of entrepreneurial innovation is behind us.” They went on to say that Silicon Valley has become complacent, too eager to rest on the heels of our previous success. Industries that once seemed promising are now dominated by global giants. “For ten years you couldn’t swing a North Face parka in Silicon Valley without hitting a new unicorn,” they sighed over a bowl of ramen. “Now what’s left?”
What’s left, indeed.
While I’m not sure I agree, the sentiment is one I am all too familiar with. In many ways, actual innovation has been replaced by the trappings of innovation. Tiger teams working outside the company’s purview and presenting new products to their VPs to rousing acclaim have been replaced by Innovation Departments who seem to dedicate their time teaching courses to other employees about thinking outside the box.
In the meantime, the people making and selling their business are hamstrung by internal procurement policies. They are told the company wants them to innovate but are usually not given the necessary tools and systems. And if they do, they end up in a maze of permissions and technicalities that make even the most ardent enthusiast agitated and discouraged.
As we head into a new year, it’s vital to ask yourself: Do I want an Innovation Team or a team that is innovative?
At Foundry415, we work with companies to find areas of innovation beyond product specs and markets. When working with our partners we ask three key questions: Who is empowered to make change, how are you measuring innovation, and are you prepared to succeed?
The leading problem I see in companies looking to be more innovative is that they think it can be done by a handful of people…and then supervised by their executive team.
Who is Empowered to Make Change?
The leading problem I see in companies looking to be more innovative is that they think it can be done by a handful of people — carefully selected or hired — and then supervised by their executive team.
And they will likely succeed, in the short-term. They will cut costs by moving a production platform to a cheaper model, or increase sales with a new marketing outreach. And the executive who is not paying attention will call it a job well done.
Change like this is mostly incremental. It is the bare minimum a company needs to do to stay competitive. Think of it as the equivalent to a cost of living adjustment for the company — just enough to keep your head above water.
When it comes to true innovation, everyone in the company must be onboard — from the newest and lowest level employee to the board of directors. At the top level, there needs to be an understanding that failure is another name for learning. The moment someone is punished or even worse, fired, for an innovative idea that did not pan out, you have killed any hope of radical change in the company. Every employee needs to feel empowered to make mistakes in order to succeed.
How are You Measuring Innovation?
It can be alluring to measure success and failure in terms of top and bottom line metrics. They line up neatly on slides so that you can show investors/senior leadership that what you’re doing is working. Nothing beats a number you can place next to another to show concrete proof you are doing better now than ever before.
I urge you to consider other ways to define success in innovation. How many big risks did you take this year and did you learn from them? It’s a common refrain that you have to fail a hundred times to succeed once. I would posit that it’s almost mandatory. Through the failures we can learn what is necessary for success.
Don’t become so focused on the bottom line or efficiencies that you miss the big swings.
Are You Prepared to Succeed?
Here is an exercise you can do right now: Have a look at a list of industries and pick the one you feel is furthest removed from yours. Now, identify potential changes to the world that could force those to intersect. A manufacturer of designer handbags discovers their bags are perfect for carrying emergency medical supplies. A virtual meeting platform encounters a global pandemic.
It’s not as unlikely as you might think.
Are you prepared if that happens? Not the specifics. The specifics don’t matter except as a mental exercise, but how could you seize the opportunity if it arose? Can your sales team handle a sudden influx of customers? Can your backend servers? Who do they go to to request resources and approvals and how long does it take to get them?
You have to not just be looking for opportunities but also anticipate them as they emerge from beyond your industry. This starts with empowering your team. It starts with instilling a culture of risk-taking that lets people feel comfortable making that leap.
So What Next?
There are short-term solutions and long-term solutions to instilling innovation in your team. Short-term, look for opportunities beyond your industry. The next big disruption will come from where you’re least expecting it — but you can practice by exploiting opportunities in adjacent industries. Travel companies have their own financing and credit card divisions. Logistics firms are looking into 3D printing as it can speed up delivery times. Find the next steps by looking beyond the traditional borders of your industry and chasing them.
For the long-term, the answer is as simple as it is complicated. Build a company culture that rewards risk taking and leaves behind risk aversion. Put systems in place that empower people to move quickly and instill a tolerance when those moves do not pan out as we might hope. Find ways of tracking these projects that don’t rely on their bottom line success to show they were worthwhile.
By putting these together, you’ll be prepared to face the major disruptions when they come down the line.
Sandra Miller is the CEO of Foundry 415. At Foundry 415, and in prior roles, she has provided innovation consulting services for global enterprise clients. This work has included executive coaching and education in areas such as creating an effective engine for startup engagement, innovation frameworks, cultivating a digital ecosystem and creating innovation challenges and hackathons. Sandra has deep experience working with technology-based startups at many stages and advising them on market and business strategy, fundraising, US market entry, and positioning their companies for scaled growth.