Intro on Innovation, how does it work in large companies?
About a month ago I found myself sitting in a large auditorium, outfitted with about 1,000 nice comfy blue seats all facing towards a large stage outfitted with a giant projector screen. An older man comes on the stage to a soft applause and starts talking about the organization’s values, what it’s current state is, and then proceeds to hammer home one point about what needs to come next. ‘We need more innovation’. ‘If we are going to continue to prosper in the future we need people to think outside the box and innovate’. ‘It is up to the younger generation to lead this next era and create a culture of innovation’. This auditorium would continue to host many older men (and one woman) who came in to try to motivate ~500 future leaders of the organization, and not one left the stage without a mention of the need for innovation.
Another organization the ELLO team visited is steeped in history, having survived for over a century and continues to flourish into the 21st century. As we enter the historic grounds, we walk by icons of the past in the form of giant statues of majestic animals, we walk past large posters reminding employees to always think about process improvement, and we walk past 8.5x11 print-outs talking about innovations in the company. We took a round-about way through the building as we weaved in and out of the floors having meetings, with a feeling similar to what Mario (yes, that Mario) must as felt as he worked his way up the levels until he finally got to the Big Boss. In our case, the big bosses were on one of the top floors. When we exited the elevator we were confronted immediately by a large glass case containing new products and awards the company had received. This trophy case seemed to represent the future of this large company, as it took the prominent place on the prominent floor in the headquarters building. To leave little doubt about the central theme of the future of this company, there was one word spelled out in giant physical letters – Innovation.
Innovation is really just a problem solving process?
Why is innovation such a central theme at the highest levels of these large organizations? If these companies have been around for such a long time, why haven’t they figured out the best processes yet? Have the leaders of these companies been reading just a little too much Clayton Christensen and spend their nights worried about disruption from the next small upstart? What really is innovation?
When we at ELLO talk with companies about their needs for innovation, it usually starts with ‘We need a widget to solve X’ or ‘Can you guys build us widget Y?’. This is a common theme throughout many of the large organizations that we work with. This is taking a product focused orientation towards the challenge of innovating.
But buying, or building a new new innovative product for your organization does not accomplish many of the innovative goals that the leaders of the organizations seek.
There are several reasons challenges associated with the product-based approach to innovation:
1. The new, innovative product will almost certainly require changes in processes to be able to use it effectively – and often these procedural changes and training for the product are skipped because they falsely seem like an ‘extraneous’ cost tacked on to a contract (like buying the 2-year warranty for your new fridge at Best Buy)
2. The new product requires buy-in from the people that are supposed to use it, pay for it, support it, etc. which requires a cultural shift to accept the introduction of new solutions
3. If many places all around the organization are busy buying one-off innovative solutions for their own problems, it is likely that an organization ends up with a grab bag of solutions that do not work together, thus losing out on the great potential of compounding incremental improvements.
In light of these challenges, when we at ELLO work with companies we try to steer them towards a process-oriented innovation mindset. In process-based innovation, the company is creating a new framework in which to solve problems, regardless of what they are. Process-oriented innovation is making your organization efficient and effective – like learning how to fish. Product based innovation is paying someone else to to go get that fish. What happens when someone can’t bring you the fish you need?
In a nutshell – process oriented innovation is helping your company define a new, adaptable, and effective way to solve problems.
3 Tenants of Process-Oriented Innovation
1. Involves the people within the organization in the innovation process so that they understand how and why the solutions are designed the way they are and so they can become internal champions of this new way of problem solving
2. Adaptable to meet a wide variety of solution sets, it should not be focused only on one area of the business, but should understand the inter-dependencies throughout the organization (i.e. can work with all of the stakeholders in your organization)
3. Takes a long-term view – your improvement should compound on each other to make your organization orders of magnitude better in the long run
We at ELLO have been codifying these ideas into practice with our clients. For example, in designing the Glyde Hand Truck with ABinBev, we worked closely with drivers (users), the distribution center managers (purchasers), and the corporate leaders (champions) to help ensure that each level understood how and why the product was being created. We are now applying this same process to other areas of the business as we look into creating a network of sensors that will affect safety, sales, efficiency, production and visibility for ABinBev. Finally, in building this next product, it is designed to both aid the proper distribution of the Glyde Hand Truck as well as enable the data-based decision making for future improvements to the end-to-end business for ABinBev as part of a long term strategy that has been developed between ELLO and ABinBev.
Our path forward with ABinBev has not come without strong leadership and courage from the ABinBev managers and executives that have chosen to allocate resources to process-oriented innovation to put their corporate vision of innovation into action.
In our experience, corporate leaders spend many hours espousing the benefits of innovation, and a small minority translate this into more than token ‘innovation efforts’. We at ELLO are motivated to work with those companies who have the intestinal fortitude to commit to the action of creating a process-oriented innovation framework that takes a long-term view, engages employees from across the enterprise and focuses on inculcating a culture of real innovation.