The idea that big business struggles to innovate is nothing new. As a company becomes larger the emergence of hierarchies, processes and the aim of just keeping the motor running can begin to stifle creativity. You don’t have to look far to see how that ends for many businesses.
As the C-Suite has exploded in recent years, with multiple chiefs of something or other (from people and knowledge to sustainability and internet evangelism) there has been a greater and greater move towards silos. After all, if Lisa, the Chief Innovation Officer, is managing this then I don’t need to worry about pushing forward innovations, she’ll do it, and anyway I might rock the boat if I do say something. And here lies the problem: siloing is one of the biggest threats to innovation.
Buy, Buy Innovation
Google has a well-known policy that encourages employees to spend 20% of their time on projects and ideas they think will most benefit the company. In theory they get to ditch their contractual obligations and indulge their creativity and innovation. And it’s yielded some big results: Google News, Gmail and AdSense all have their roots in 20% time.
But as Google has grown, it seems that the 20% policy, while still in effect, may no longer be practical for employees if indeed it ever really was.
So Google, while maintaining its secretive Google X lab for what they call ‘moonshot’ projects, has taken the well-worn path of big business: buying innovation.
With huge reserves of cash, Google and other large organisations simply buy up smaller companies. Because start-ups and small businesses have less to lose they take bigger risks, and this means they are a hot bed of innovation just like Google, Facebook and the rest were when they emerged. These are some of Google’s innovation hauls:
- YouTube – Purchased because Google could see the huge potential in video content
- Nest Labs – As the Internet of Things and home automation became a reality, Google grabbed these innovators
- AdMob – With mobile internet access soaring, Google acquired this mobile ad platform
- Android – Now the biggest smartphone platform, Google snapped Android up in 2005
And the list goes on. You’ll find similar acquisitions by Facebook, Yahoo!, Microsoft, and also non-tech firms.
In larger organisations there is an aversion to risk, especially amongst the C-Suite. This makes sense when your job could be on the line. After all it seems that many C-level jobs exist to soak up the adulation when things go well and then take the hit when it goes wrong.
I’ve had many experiences going in to corporate environments, hearing lots of people talking about the need to change, and when I say, “Well let’s do it”, the answer is invariably a mixture of incredulity and pessimism. Before anything happens there has to be a lot of meetings, then the friction starts and before you know it everything has ground to a halt.
The feeling is that once you begin to innovate and disrupt then you open Pandora’s Box and there is no way to shut it. So the easiest way for huge corporations and businesses to innovate is let someone else take the risk, and if it works buy it.
But what about those businesses that don’t have the mega-corporations’ buying power? They can still do it, but instead of using money they have to focus on people.
Talk of innovation is fine, and necessary, but of course but it’s fair to say that expecting a business with hundreds or thousands of employees to simply change their culture is a bit unrealistic. After all not many people will relish the thought of possibly losing their job just so they can say they innovated.
But businesses, no matter how large, can’t avoid change. For many organisations it would be best to accept the difficulty they face in innovating and then take baby steps towards it.
One crucial step that businesses overlook is fostering a start-up culture from within. We know that corporates struggle to innovate for the reasons above, but what they can do is create small “start-ups” within the structure.
Set up a small, nimble team, give them some budget and let them know that what they need to do is experiment and work towards the goal, without worrying about jumping through the hoops of risk limitation and so on.
An analogy I like is that of a mother ship. The main business is the mother ship, which repairs and refuels these smaller start-ups. They then act like smaller craft that strike out and explore the depths of the final frontier.
To further minimise risk, these smaller companies can be moved off the balance sheet, which should calm any fears of failure damaging the parent company.
Investing in teams like this might seem scary to the monolithic world of corporations, but it is a way to innovate that is often overlooked.
TOP DOWN MEETS BOTTOM UP
Innovation does need to be led from the top, there’s no getting away from that. Very little can happen without top-level buy in.
According to Harvard Business Review’s report Business Transformation and the CIO Role – businesses that are leading change, what they term Innovation Accelerators, share these traits:
- The CEO drives the commitment to innovation and transformation
- The approach is structured but they prioritise speed over perfection and remove red tape
- They emphasise diversity of thought and experience. Collaboration happens across teams and disciplines, silos are removed
- Their CIOs spend more of their time on activities that are strategic to the business
- They have strong IT departments that drive the agenda on innovation
- They invest in and reward innovation
What’s important here is that innovation is led from the top, but driven from the bottom, as the points highlighted reveal. One interviewee in the report explained how their company goes “down two levels” to solve problems. That is, instead of making decisions strictly at the top and letting it trickle down, executives collaborate with staff further down the company and in different departments. This gives them a better idea of the problems faced by those on the ground. It also gives different viewpoints, which increases innovation.
And that’s where innovation from the ground up comes in.
I understand Snapchat, I get how to use it, what people use it for and how it can be used in a marketing context. But I’m in my mid 30s and nobody I know really uses it. My understanding of it is abstract, academic. Whereas someone younger, who lives and breathes it everyday, has a knowledge of Snapchat I can never really have.
THE TURN OF THE MILLENNIALS
So, what’s the answer? Essentially, hire people who live the reality of digital in a way you can’t.
Millennials are the natural choice. For this generation, smartphones, social media and digital are irrelevant labels. What falls under these categories is simply the lived reality they experience every day. But really, being a Millennial is more of a mindset. You don’t need to just hire people under-25, and in fact they may lack the experience and broader skills for many positions. Find people who have that openness, the ability to flex and change.
And, despite some naysayers, they are by their nature a driven, disruptive and innovative group. A study by PwC on Millennials in the workplace revealed:
- 52% say career advancement was very important to them
- 35% believe that personal development opportunities are the most important offer an employer can make
- 38% feel that older senior management don’t get them
- 65% believe rigid hierarchies and out dated management styles fail to get the most out of younger recruits
- 46% think their managers don’t understand how they use tech at work
This generation expects information to flow freely, they are wary and mistrustful of power structures, and they want to work in the way that gets the best results, not the way things are “supposed” to be done. With their access to, and understanding of, technology and emerging platforms that’s exactly how they will operate, whether you like it or not. And that’s a good thing.
By hiring these natural disruptors, helping them grow and develop, and listening to them, you’ll be able to achieve digital transformation and innovation in a more fluid way than if you just try and force it from the top.
Of course the focus shouldn’t just be on Millennials and so called ‘digital natives’. People with strong traditional skills but who have an interest in, or are motivated to learn more about, digital can bring just as much to your business. We’ve added people to the Organic team who came from other backgrounds and aren’t your typical smartphone wielding 20-somethings. By supporting and encouraging them to get more into digital they are now key to our continuing success.
People need to move away from this idea of ‘digital’ being a little container that you drop ‘digital people’ into, while everyone else operates in a different world to them. Soon digital is going to stop being a thing, in fact some people would say it already has, and it will just be an integral part of everything an organisation does.
As with anything, it’s about balance.
THE INNOVATIVE C-SUITE
The C-Suite can innovate, but to do it they need to change how they think about the structure of their organisations. CEOs and CIOs in particular need to acknowledge that they can’t really stay on top of everything, and that they should tap into employs who are digitally savvy.
Trying to motivate people who lack drive is difficult, and sometimes impossible, so always look for motivated people and give them something to believe in and care about. Support their wider personal development, even if this means letting them indulge in activities and training that is not directly related to their job role. If your designers understand how to code, and your coders have a grasp of design principles, their breadth of knowledge coupled to the depth of their expertise in their specialism will make collaboration and understanding throughout your business easier and more effective.
There is only one way to succeed in the face of change, and that’s to embrace it, because clinging to the old ways as they crumble around you isn’t sensible or sustainable.
Interested in finding out how you can make digital transformation a success? Read our ‘Unlocking Your Digital Transformation‘ event round up.