68. Innovation Sins & Virtues

Key Definitions

Innovation is the act of doing something new and distinctive. Firms need to constantly try to innovate their products/services, processes and even business model, to improve their value creation and strengthen their position vis-à-vis competitors.

Being innovative is not a quality that happens naturally or by accident, but a capability that needs to be organized. A one-off innovation can happen despite a lack of structural innovation capability, but ongoing innovation requires the buildup of the right organizational conditions.

Conceptual Model

The Innovation Sins & Virtues framework identifies the seven most deadly sins in the area of innovation. Each undermines an organization’s capability to continuously innovate and condemns it to linger in ‘innovation hell’. Each sin can be avoided by adhering to its opposite virtue. Together these seven vital virtues create the organizational conditions necessary to achieve ‘innovation heaven’. The framework is intended as a checklist to evaluate an organization’s current innovation infrastructure and to suggest avenues for improvement.

Key Elements

The seven sets of opposite sins and virtues are the following:

1. The Exploitation Trap vs. The Exploration Imperative. In the short run, it is financially more attractive to invest in optimizing the organization’s current products and processes, than to place bets on inherently more risky innovation projects. So, management teams often fall for the lure of exploiting what they already have, instead of having the courage to venture out into the unknown to explore innovative opportunities. But explore they must.
2. The Icarus Syndrome vs. The Insurgency Mindset. Organizations also get stuck in the past because they come to believe that their historic success formula will remain the recipe for profitability in the future. But to be innovative, organizations need to be irreverent rebels, looking for ways to smash the past and come up with a challenging alternative. They need to be willing to upset their business themselves, instead of letting others do it to them.
3. The Big Bang Fallacy vs. The Marathon Mantra. Innovation is not an event, but a process. It doesn’t happen in a short sprint but requires years of hard work. Yet, many managers think of innovation as an occasional occurrence that takes place suddenly and radically, after which a long stretch of stability sets in. But, of course, innovation is more like a marathon, requiring sustained dedication and discipline to reach the finish line.
4. The Innovation Monastery vs. The Innovation Bandwagon. The R&D department can be a key source of new technology and novel ideas, yet they are often far removed from operations and the market, which can make their thinking rather one-sided, even esoteric. Successful innovation requires a variety of skills and perspectives, making it an organization-wide activity. And novel ideas can come from anywhere in the organization.
5. The Business Bulldozer vs. The Business Incubator. Although everyone in the organization can get involved in innovation, new initiatives need to be shielded from everyone imposing their existing policies and procedures on the infant innovation. ‘Business as usual’ often unintentionally smothers the unusual new approach. Therefore, innovations need to be kept at a distance and incubated in the best suiting circumstances.
6. The Lone Inventor Legend vs. The Capability Condition. The stories told about aspiring innovators starting their new company in a garage has led many people to believe that true entrepreneurs don’t need any support and even thrive on adversity. Unfortunately, the lone inventor is the exception, not the rule. To increase the chance of success, organizations need to create supportive conditions, including sufficient time, resources and infrastructure.
7. The Fermentation Fable vs. The Mobilization Missionary. In the same way, many top managers believe that innovations will bubble up from lower in the organization, driven by dogged individuals. In reality, the more that top management promotes innovation, the higher the chance of eventual success. At the very least, top managers need to provide air cover for challenging new initiatives, but even better is for top managers to be the advocates of innovation in general and to champion certain innovations in particular.

Key Insights

• Innovation doesn’t come naturally. How to be innovative is poorly understood by most managers, while there are many innovation pitfalls into which they can easily tumble.
• Innovation is hindered by seven deadly sins. There are seven common dysfunctional behaviors undermining organizations’ capability to innovate – focusing on exploitation, clinging to past successes, hoping for a sudden change, leaving innovation to R&D, imposing existing procedures, giving little support, and providing no management backing.
• Innovation is supported by seven vital virtues. Each deadly sin can be avoided by sticking to a vital virtue – embracing exploration, challenging success formulas, taking a structural approach, involving the whole organization, sheltering innovations from standard procedures, providing organizational support, and getting top managers as champions.
• Innovation stuck between heaven and hell. Few organizations live all seven virtues all the time. But this framework can be used as a checklist to evaluate how well they are doing.
• Innovation needs to be organized. The conclusion is that to be innovative requires innovation management – a structured approach to abide by the seven vital virtues.