The Challenges of Corporate Innovation
An excerpt from an interview with Jesse Nieminen from Viima – discussing innovation culture, blockers, the Innovation Mode and more.
Q: What are the most common challenges or barriers to innovation in large organizations?
Innovation in large corporate environments typically suffers from bureaucracy, politics, a risk-avoidance mindset, and a general ‘disconnect’ from the organizational purpose – and these blockers can be seen even in companies that are truly determined to innovate.
In many cases, I’ve seen great ideas being abandoned due to inertia or political reasons – e.g., when, in absence of an objective ‘opportunity evaluation’ framework, ‘political’ interventions impact innovation investments. In other cases, I’ve seen organizational complexity and bureaucracy blocking corporate innovation – for example when innovators get frustrated while trying to navigate the organizational structure in search of the right stakeholders to pitch their ideas and seek support. On the other hand, I have witnessed small but inspired startup teams that managed to produce impressive solutions, surprisingly fast, with extremely limited resources. What makes the difference in such cases, is the belief in the purpose, the mission, and the vision of the company along with the true agility of the team – its ability to learn quickly and pivot as needed. This is the ‘startup mindset’ that corporations need to adopt.
Another frequent point of failure is when corporate leaders fail to convince their people regarding the importance of innovation in their context. I mean, it is easy to set up fancy collaboration spaces, organize innovation events, hackathons, or even establish an impressive innovation lab – but without a strong link to the organizational purpose and key results, there is a risk to end up with the so-called ‘innovation theatre’. In such cases, the initial excitement quickly fades away due to the absence of meaningful outputs and outcomes. Ironically, such ‘lightweight’ or ‘on the surface’ innovation programs can even damage the ability of the organization to innovate – as people quickly realize that fancy innovation activities alone cannot serve the business goals of the company.
Finally, I would highlight the limited ‘innovation education’ as a frequent blocker for corporate innovation. Very often, there is no consistent and contextualized innovation process for the company, there is no shared understanding of the key principles, and no ‘standard innovation language’. This prevents alignment on what innovation means in the context of the company and allows confusion around the tools, the methods, and the innovation processes. Companies do need a framework for innovation and a strong innovation leadership on top of it.
Q: How would you define the ‘innovation culture’, and how would you suggest leaders to shape it?
The ‘culture of innovation’ is another overused term, that needs proper definition. In the Innovation Mode, I define it as the collective mindset that values and promotes curiosity (exploration of new ideas) and change (adoption of new ideas) as key success factors for the organization, holistically. It is a system of values and principles that inspire and empower people to collaborate effectively toward big organizational goals.
As I explain in the Innovation Mode, the ‘system of values’ of the innovation culture is based upon six principles, namely Trust, Safety, Openness, Curiosity, Purposefulness, and Healthy Competition. When these principles are there people tend to be more open, creative, and efficient - they engage more with the innovation process, they become more proactive, they share their ideas and contribute to others’ ideas in constructive and creative ways. At the same time, the leadership is also more open, accessible, and collaborative – they engage with innovation activities, they provide direct and constructive feedback.
The culture of innovation starts evolving when a critical mass of people engages with the innovation function as a means of pursuing the purpose of the organization. You will know when this special culture is truly adopted when you see leaders in your company accepting failure as part of the innovation process; when people are not afraid of failure and feel part of “one team” working toward a bold organizational purpose; when they feel empowered and encouraged to engage with formal or informal innovation activities.
To shape the innovation culture, leaders must first realize that it cannot be simply fixed, on-demand – and this is one of the most common mistakes I’ve seen in the market: you cannot simply adopt a ‘better culture’ or run a program and make your people more open to innovation; you cannot simply bring a vendor to change your culture. Whatever improvements you get out of such initiatives will only be ephemeral. Leaders must realize that the innovation culture can only grow organically – it can only evolve from within. Shaping a culture of innovation is a long-term investment - a journey of inspiration and leadership, powered by authentic, strong messages and genuine leadership behaviors that link innovation with the purpose of the company.
As a leader, you must first obtain a good understanding of the current state of the culture in your company – to become fully aware of the blockers, blind spots, and gaps that prevent people from engaging with innovation. For example, the organization may realize that people need additional resources (it could be digital tools, innovation methods, templates, content, etc.) or that people perceive the innovation process as slow and complex; or that they are not encouraged by their managers to participate in innovation events.
Based on such findings, the company could design and orchestrate initiatives that improve the existing innovation tools and methods, provide related educational programs, and establish more effective communication channels for innovation. It is important to note here that this is not an isolated ‘fix the culture’ project but rather a continuous, ongoing process of improving and protecting the innovation culture. At the core of this process, I see a self-organizing community of inspired innovators.
Another prerequisite for an authentic innovation culture is transparency and access to knowledge. In this direction, I always advise my clients to implement an ‘Innovation Portal’ as a digital ‘home for innovation’. This is the place where people discover and share anything innovation-related; where they discover innovation stories and share their learnings. When such an innovation portal exists, people can easily see how the organizational purpose links to innovation initiatives and projects; they discover real examples of how innovation drives value for the business and they connect with other innovators within the organization. Through such an Innovation Portal, leaders themselves are more present – they diffuse strong messages about the importance of innovation, recognize and reward innovators; they advocate for the fail-safe fail-fast principles, and promote real projects that demonstrate how innovation serves the organizational purpose. Also, the Innovation Portal can become the basis for the formation and empowerment of the informal community of innovators I mentioned previously. And this is very important because those inspired innovators both produce innovation results and promote innovation – they lead by example and attract the attention of people from the broader organization. On top of all these, a carefully designed gamification system can bring incredible results in promoting innovation and boosting the culture.
These are just some of the key investment areas for shaping a strong culture of innovation. It is important to understand that, obtaining and maintaining a strong innovation culture needs ongoing orchestration that must become part of the ‘operating system’ of the organization.
Q: How would you advise innovators going from an idea or opportunity to concept and then product?
I strongly believe that what differentiates a truly innovative company is the ability to quickly spot and validate innovation opportunities. A systematic, streamlined approach to ‘opportunity discovery’ improves the chances of spotting promising, big opportunities at the right time. This allows better prioritization and innovation investment decisions, which results in a healthier portfolio of products to be built and driven to the market.
The problem is that people tend to overcomplicate this process – they often add too much governance with multiple stage gates, requirements for lengthy documentation, long assessment procedures, unnecessary interdependencies, and bureaucratic decision-making. This approach slows down the entire innovation pipeline and severely impacts its throughput.
I often advise my clients to rethink their opportunity discovery process as a simple, fast, and agile ‘system’ that is well-understood and adopted by all. Some of the most important components of this system – such as the ‘idea intake’, the ‘assessment of ideas’, the ‘concept validation’ and the ‘MVP development’ - can be abstracted and streamlined as independent services. This increases the pace of innovation, enables clear accountability, and allows accurate performance measurement and insights.
For example, the ‘Prototype Factory’ as presented in the Innovation Mode, could be one of these independent, core services. This is an optimized ‘concept validation capability’ run by a team of experts who know when and how to validate an idea or a product concept. This special team understands deeply the technology ‘state of the art’, they are fully aware of the competition and emerging market trends, and they master methods related to prototyping, user research, and product development. They leverage reusable software components, templates, UI elements, and frameworks, and they use low/no-code platforms to build realistic, inexpensive prototypes in no time. Beyond that, they apply the most appropriate validation techniques – by exposing the prototype to real users and gathering data and feedback. The Prototype Factory delivers not just prototypes, but data-backed, justified recommendations about the next best steps for each product concept – e.g., hold, revise, pivot, proceed, etc. The Prototype Factory hides the complexity regarding prototyping and testing, increases the pace of innovation, and boosts the ‘opportunity discovery bandwidth’ of the organization.
In general, I would advise innovation leaders to invest in educating their organizations on the topics of experimentation and prototyping – I think it is essential to establish a ‘shared innovation language’ across the company – also covering product development and experimentation terminology. For example, everybody must understand what a ‘prototype’ is, how it is different from an MVP and when each of these comes to play. Business stakeholders must have a clear view of how experimentation can be used to improve decision-making and how failure is part of the innovation process. This is essential as it helps in both expectation management and better utilization of resources.
Q: Where would you advise a company leader to start from to try to drive more innovation?
To move closer to the ’Innovation Mode’, you need to first understand where you stand in reference to the ’ideal state’. Hence, I think that the most important step is to perform a ’self-assessment’ in terms of the ’innovation maturity’ of your organization. This will tell you how mature your company is - in terms of capabilities, culture, innovation outputs, and outcomes and how far you are from the ’ideal innovation architecture’. The latter must be defined specifically for your company - e.g. the ideal innovation architecture after considering the mission, size, sector of your company, the type of services/ products offered, etc.
The assessment comes as a ’gap analysis’ presenting the missing elements in terms of technologies, processes, resources, educational programs, or even organizational design. The report should then be used to prioritize the needs, define potential solutions and then construct a strategic roadmap presenting how to move towards the ’Innovation Mode’.
This is an excellent way to obtain awareness about the current vs ideal state, capture insights regarding the elements that must be added to the scheme, and ensure alignment in terms of planning and ownership.
Q: You’ve worked with many innovation leaders and innovators. What do you think sets the successful ones apart from the rest?
On top of the typical innovation skillset, I think that there are three characteristics or behaviors that make a big difference.
First, successful innovation leaders are purpose-driven. They get passioned or even obsessed with the big purpose they are serving and the problems they are trying to solve; they use their bold vision to put their creative energy in the right direction and inspire others to join the effort. Hence, having the ability to shape, articulate and advocate a bold vision is critical for innovation leadership.
Second, successful innovators are inherently curious – they have an experimentation mindset and they see failure as part of the process. They tend to question things in a constructive way and challenge the status quo – how things work and why they work in a given way. Having this mindset can prove to be a valuable source of ideas and innovation opportunities - and also a source of inspiration and leadership for fellow innovators.
Finally, true innovators have a special mindset regarding collaboration – they are ’open’ to share their thoughts and ideas, they realize that innovation succeeds when great minds work together to solve big problems; when people share their knowledge and expertise; when they are open to constructive feedback.
* Excerpt from an interview to Viima - Questions by Jesse Nieminen (Jan 2022)
