Innovation - a question of balance
Imagine the scene. Crowds looking up, craning their necks to see against the blinding sunlight glistening in the spray. The roar of the waters as they crash down nearly 200 feet to smash against the rocks below. The damp chill of mist clammy against skin despite the summer heat. Stretched across the gorge is half a mile of thin wire climbing away from a platform on which a tiny figure of a man stands, about to step out….
Charles Blondin knew a thing or two about risk management. The most notable daredevil of his day he took the first step on June 30th 1859 on what was to be his biggest stunt yet – tightrope walking his way across Niagara Falls. It only took him 17 minutes and on reaching the other side he promptly turned and made a return trip. It was a trick he’d repeat many times, adding even more challenges – pushing a wheelbarrow, carrying his manager on his back, even once completing the task blindfolded! And all without a safety net.
This is not something I’d like to try even if lockdown does ease enough to allow me to travel. But it does give us a powerful metaphor for thinking about innovation from the comfort of our armchairs. It shares many features with the process:
High risk as well as high reward (if you make it across safely)
A clear goal and the ability to shut out everything else and focus on it
The value of prior knowledge and experience, embedded in routines – this kind of walk is not one for first-timers but if you’ve practised to the point where it (almost) feels automatic then it might work
Careful systematic steps, each one punctuated by a check, a slight adjustment, pivoting
And tension. In the high wire trade loose wires are deadly, slack ropes are suicide. But while they need a degree of tightness there has to be enough give in them. It’s a question of balance, not just in your legs and feet but in getting the right degree of tension in the quivering wire beneath them.
I don’t know much about tightrope walking but I do get this idea of tension. Not least because it’s an essential part of preparing to play my guitar – tuning up. You can’t make music without it, at least not on anything which has strings on it. Too loose and there’s not enough to enable the string to vibrate when it is plucked. Too tight, and your string snaps. It’s all about keeping just the right degree of tension.
And that’s also a big part of the innovation story. Peter Drucker put his finger on it (as he did on so much of management practice) when he talked about ‘the discipline of innovation’. The title of one of his many articles, this apparent oxymoron highlights one of the big challenges we face in managing innovation. How to allow for creative freedom while at the same time keeping a sense of control. How much is inspiration – and how much hard work? The answer for him was ‘somewhere in the middle’ – in other words, it’s a balancing act.
His view was simple: ‘innovation is real work that can and should be managed like any other corporate function’
We don’t have to look too far to see this in a number of common innovation situations.
Managing innovation as a process. Anyone might get lucky once but if we are going to be able to repeat the trick then we need some structured roadmap, some framework to guide the progress from initial idea to something which creates value. Embedding behaviour patterns for how we guide our search, how we select amongst options, how we execute projects against a background of uncertainty requires the creation of ‘routines’ – repeatable steps or sequences. That’s a hard-won lesson which has emerged consistently over a century of researching innovation and it forms the core of thousands of textbooks and consultant offerings. These days there is even an international standard for innovation management; ISO56000 (from the International Standards Organization) promotes a systemic and systematic approach to organizing and managing the process. This is a set of normative guidelines rather than a bureaucratic straitjacket; its purpose is to provide some simple framework rules which can help focus creativity, channel energies and avoid costly mistakes.
Accelerators – and brakes. Innovation is about experiment and learning and these days there’s growing emphasis on the need to do this fast. But it’s not simply a matter of opening up the throttle and heading off in any direction we choose. Today’s models for ‘agile’ innovation are about focused rapid learning cycles through which we can ‘fail fast to succeed sooner’, pivoting around the lessons we learn. They are rooted in much older ideas about disciplined project management and the need for regular strategic reviews (stage gates, for example) to monitor progress, to adapt and if necessary to kill off projects which are drifting out of control. The costs of not having such controls can be seen in the (sadly) extensive range of projects which overran budgets, timescales and often never succeeded in meeting their technical or commercial targets.
We don’t have to look too far to find high-profile examples like the ‘Concorde’ airliner (original cost estimate £75m, eventual cost £2bn), the Iridium satellite networkm (eventual cost $5bn which bankrupted the company), countless high-profile public sector IT projects and pretty much the entire contents of the ‘Museum of failure’ exhibition gives a good start to our list. But behind these are countless others; costly mistakes with (if you are a start-up with very limited resources) often terminal implications for the innovating organization in question.
Exploit and explore. Innovation involves varying degrees of novelty along a spectrum. At one end is incremental change, doing what we do but a little better, and this accounts for the majority of innovative activity. Not surprisingly; it allows us to build on what we already know , about technologies, markets, competitors, etc. and we can exploit that knowledge to advantage. But there’s also the need for radical innovation, exploring uncharted territory, doing something different. Unless you put some of your innovation eggs in this basket you risk being overtaken by others in a highlight competitive world.
The challenge is finding the right balance between the two and that’s the basis of a tricky conversation which you can find going on every day in boardrooms and strategy reviews. There’s no simple formula; the 3M organization offers a good reminder of this. Famous for its long history of breakthrough products it was a regular constituent of lists of the world’s most innovative companies for decades, despite being well over 100 years old. But in the first decade of the new millennium it began to slip down the rankings – for example from being top of the BCG list in 2004 to 7th place and falling by 2007. Their soul searching found the cause to be the balance slipping between exploit (of which they were doing a lot thanks to heavy emphasis on six sigma incremental improvement drive) and explore. A new CEO restored the balance, the breakthrough innovation engine restarted and they resumed their place at the top of the list.
Of course the reality was more complex; when they introduced Six Sigma it was partly to bring back discipline in an organization whose costs had spiralled out of control and the programme was very successful in doing that. But its emphasis on tight metrics and controls was not necessarily a good fit with some aspects of the innovation effort, especially in R&D. The moral of the story is not one of either /or but rather of managing a delicate balancing act.
Inside and out. Over the past twenty years we’ve become increasingly aware that innovation is a multi-player game, that ‘not all the smart guys work for us’. That’s fine but it throws up another question of balance – how to manage the flows of knowledge into and out from the organization in a controlled fashion? How to develop an open innovation strategy which takes account of intellectual property (IP), organizational capability and complementary assets?
Procter and Gamble were early entrants to this game; back in 2002 they launched ‘Connect and develop’ with the ambitious target of a 50/50 split between innovations which came from inside and from outside (vs. the 100% inside model which had hitherto been their history). This gave them a clear strategic goal but they’ve spent the past twenty years learning how to do this, setting up and then fine tuning their mechanisms to enable a balance which is now close to that 50/50 goal. They aren’t alone; the big shift in innovation thinking over the past decades has been in this direction and today’s major players are ecosystem They convene and co-ordinate rich networks across platforms, a delicate balancing act of managing knowledge flows rather than creating and controlling all the knowledge by themselves.
Organic and mechanistic. A key question in any organization is around where innovation happens and the structures which might support that. One model is to concentrate in R&D, setting up a specialist functional area whose job is to think on behalf of the rest – the brain of the firm. But while concentration of this kind helped some of today’s giants to grow – Bell Labs, Philips, the big chemical concerns which spawned today's Big Pharma – it is a somewhat binary choice.
Back in the 1960s UK researchers Tom Burns and George Stalker looked at the arrangements for innovation within a range of companies across many different sectors. Their conclusion was that there are clearly different contexts within which innovation happens – the experimental open ended search with high uncertainty fit well with the R&D laboratory approach. But there is also scope for incremental innovation, not least around process improvement, doing what we do but better. (In this they anticipated lean manufacturing ideas by nearly thirty years). Their conclusion was that innovation could happen right across an organization but it needed different structures to support it, positioned along a spectrum whose poles were what they termed ‘organic’ and ‘mechanistic’. Smart organizations mobilised multiple innovation activities in different ways along this spectrum, looking for a balanced portfolio rather than a single best way.
High involvement innovation. Which of course raises the question of who does the innovating? Specialist highly trained teams can make a significant contribution and you can find them in R&D, product and service development, new business units etc. But the key skills of creativity are available from all employees and the long history of suggestion schemes and similar employee involvement programmes underlines the innovation contribution which they can make.
Experience with incremental innovation in the ‘quality movement’ and the ‘lean revolution’ in the late 20th century paved the way for today’s collaboration platforms which offer powerful ways of bringing many more minds together to work on the innovation challenge. Companies like Liberty Global and Fujitsu now tap into tens of thousands of employee ideas and mobilise their creative efforts behind key strategic innovation campaigns.
Broadcast search – crowdsourcing innovation ideas – has become increasingly important, not least during the current Covid-19 crisis. And one of the key lessons which has emerged is that it offers not only a massive increase in the volume of ideas to feed into the innovation process but also a significant increase in the variety. Drawing on diversity – having people who think differently – doesn’t take away from the focused mission, it enhances the search for new and interesting ideas around it.
We could go on but the point is clear. Getting fit for innovation depends on managing tensions, resolving apparent conflicts and finding the sweet spot, the healthy balance. We need to build a balanced approach and to develop our routines for enabling innovation in a day-to-day systematic fashion. But it’s not a static process; just as no self-respecting funambulist (= tightrope walker) would dream of setting out without checking and adjusting their wire for tension, so we need to keep our innovation management routines under constant review, adapting and adjusting them. It’s a dynamic process.
That’s an idea which a sometime 97lb weakling back in the 1920s stumbled upon as he was picking himself up off yet another beach on which he’d had sand kicked in his face. Fed up with this he strove to train himself to become, if not Superman, then certainly one of the world’s strongest men. Angelo Siciliano (who changed his name to Charles Atlas) was named ‘America’s most developed man’ in 1922 and became a role model to thousands who followed the Charles Atlas method of physical exercise. And at the heart of this transformative programme was the simple idea of building up strength by pitting muscles against each other– the principle of ‘dynamic tension’. Not a bad motto for working towards innovation fitness……