How do you build an innovation engine in 90 days?

In the quest to boost innovation within an organization, the path often appears daunting, especially when comparing to companies with charismatic founders or decades of innovation experience. Scott Anthony, who has been immersed in innovation for years, shed light on a refreshing perspective in a recent Harvard Business Review article. He proposed that, with the right interventions at the right pace, anyone can establish a Minimum Viable Innovation System in just 90 days. It doesn't require rocket science. It's about defining the types of innovation to pursue, identifying strategic opportunities, enlisting the right people, and implementing sufficient governance. This approach is accessible and applicable to any organization, offering a clear path forward for innovation leaders.

So, if you've been wondering how to elevate innovation within your organization, take heart in Scott's insights. The power to innovate lies within your grasp.

What is holding companies back from really building these innovation engines and building new growth engines?

When it comes to building innovation engines and propelling new growth, many companies hesitate to begin this journey, believing it requires hefty investments or a large hiring spree. However, in the Harvard Business Review article, Anthony emphasizes that it's possible to kickstart innovation without breaking the bank or rapidly expanding your workforce.

A common concern that surfaces revolves around talent acquisition. Some believe their organization lacks the innate innovation talent found in tech giants or fast-moving consumer goods companies. Anthony challenges this notion, firmly believing that innovation is a discipline, a set of skills that can be cultivated and managed within any organization. The capacity to innovate exists within, waiting to be unlocked.

Another hurdle often cited is a lack of spare capacity due to relentless operations. Surprisingly, hidden beneath the surface, organizations harbor the untapped potential, often trapped within what we term the "zombie projects" – initiatives that linger without significantly impacting growth. Organizations often discourage those who point out these unproductive endeavors, inadvertently promoting a culture that fears failure. However, we advocate for a different perspective; failure in pursuit of innovation, guided by well-thought-out assumptions and learning, is a stepping stone, not a stumbling block on the path to growth. Embracing this mindset can lead your organization towards building successful innovation engines and unlocking new growth opportunities.

Where does that myth come from that starting innovation has to be really expensive?

The myth that starting a business is expensive doesn't hold up.

Back in 2010 in Singapore, Anthony had a consulting practice with a capital investment arm. One day, a young startup called Plunify came to pitch for investment. This was the first time that the people pitching showed Anthony a business — not just a business plan. A business plan is on paper, on PowerPoint slides. A business is in the market, a functioning website, early customers, early revenues, and more. Plunify launched all of this while spending basically nothing.

Today, many markets let you launch a business for very little. Those who still think it's costly should see what entrepreneurs do with leading startup tools. Success comes from trial and error, not one big shot. Keep it simple, and you can change the whole game.

What can companies do to overcome this fear of failure?

To bring about cultural change, it's crucial to tweak the routines and rituals within the organization. Actively encouraging people to participate in innovation endeavors gradually shapes the culture. Additionally, rethinking pivotal moments, such as employee reviews and celebratory events, can make a significant impact. Rather than solely focusing on outcomes, these moments should evaluate how the work was approached, recognizing that in the unpredictable world of innovation. Success isn't always the best measure of effective thinking. Recognizing and celebrating attempts, even those that didn't lead to immediate success, can be instrumental in shifting the culture.

What does innovation governance look like?

In the article "Build an Innovation Engine in 90 Days" article, authors Duncan, Pontus, and Anthony touch on a crucial concept. Many companies follow planning disciplines, suitable for a linear, predictable environment. However, today's reality is different.

Their suggestion is to adopt a strategy from the venture capital industry, where staging investments replaces one-shot deals. Embrace polarization in decision-making, understanding that deviations are not punished but expected. Learn from them, find pivots, and don't see it as a passive exercise. Like successful venture capitalists, actively engage with your teams, offer advice, and shape strategies. These established disciplines help rigorously navigate uncertainties in innovation – a vital practice for any company.

How do companies build dual operating cultures?

Here, Anthony shared a few key points with us. Rather than viewing ambidexterity in the traditional sense, he sees it as being a chameleon leader – adapting to different situations with distinct thinking and actions. It's a more intricate challenge than being ambidextrous because it requires playing two very different sports depending on the context.

So, how do you introduce this into a company inherently designed for different tasks? Establishing a safe space or a dedicated part of the organization is vital, a practice observed in many forward-thinking organizations. Leaders need intentional training to think and act differently, a task challenging for those accustomed to executing yesterday's model.

For a culture deeply rooted in innovation, prioritize curiosity. Nurturing and driving curiosity, from field trips to customer engagement, cultivates a natural environment for innovation. It's a nuanced process, but curiosity serves as the cornerstone.

How can leadership intervene & encourage innovation?

Identifying the specific interventions for fostering innovation within an organization isn't a one-size-fits-all solution. It varies based on each company's unique circumstances.

The initial step for any leadership team is to pinpoint the problem innovation should solve. The term "innovation" can be thrown around without a clear definition, so it's essential to establish a precise understanding. At InnoSight, innovation is defined as something different that creates value, with specific categories like sustaining and disruptive innovation. Once the problem is identified, attention turns to the resource allocation engines within the company, encompassing budgeting, project funding, human appraisal, and leaders' time allocation. These engines are instrumental in driving innovation.

On a more detailed level, when working on specific projects, leaders should not wait until the end to intervene. The most significant impact can be made at the beginning by actively shaping and defining the problems, termed as strategic opportunity areas. Deep involvement in the early stages enhances the chances of success.

While there's more to explore on this topic, these considerations provide a solid foundation for effective intervention in the innovation process.

Is leadership today ready to reinvent themselves?

In considering the potential for more business failures akin to Kodak or Blackberry, the response is a nuanced blend of "yes" and "no." With the accelerating pace of global change, disruption is pervasive across various industries. Even seemingly stable sectors, like mining, face potential upheaval, exemplified by ventures such as asteroid mining. The readiness of today's corporate leadership for this paradigm shift is questioned, highlighting the need for a fundamental mindset shift to view disruption as an opportunity for growth rather than a setback.

The concept of creative destruction, articulated by Joseph Schumpeter, underpins this perspective. While disruptions may initially resemble a gale threatening a brittle house, the analogy suggests that reinforcing and adapting today's structures can lead to exciting possibilities. The key lies in recognizing that, despite business models evolving, there is inherent potential for growth within the winds of change.

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_{Guests
Scott Anthony, Managing Partner of Innosight (@ScottDAnthony)
Alex Osterwalder, co-founder of Strategyzer (@AlexOsterwalder)}

_{Host
Kavi Guppta (@kaviguppta)}

_{Music
A Void by Johnny Ripper}