There has been a lot written lately about the decline in innovation, or R&D productivity in the US and elsewhere.
Labor rates (in the US in particular) have flattened out, and are now in decline. (see as an example, the chart labeled “Flattened out”) The argument is that we are not bringing out new technologies at a fast enough pace to sustain the growth in wages. Declining wages reduces consumer spending which accounts for 70%ish of total GDP. And thus, some economists argue that technological innovation is a key driving force in overall economic vitality and growth.
Often over recent history, evolutions in core technologies (the internal combustion engine, electric power, oil and gas, transportation, cellular communications, computer technology) have propelled economic growth. In the US for example, when our “innovation engine” was running well, we saw a blistering economic growth rate of about 2.5% per year. Since the turn of this century, that rate has fallen to about 1%.
While R&D spending hasn’t dried up, some argue that the significance of what is being invented today is less than in the past. The Economist reported on one study suggesting that R&D workers 60 years ago contributed about 7X more to economic growth as compared with their successors who are in our laboratories and engineering departments today. I am not sure of all the reasons why, but I have read articles suggesting that our fixation with lowering risk is forcing shorter time horizons and companies to focus on smaller non-game changing projects that have more certain chances for commercial success.
Peter Thiel, Silicon Valley visionary, and founder of PayPal puts it this way, “[we grew up dreaming about] flying cars, instead we got 140 characters [in 73 different type fonts].”
So how do we re-kindle that spark of innovation?
Here is a website that suggests that one effective way to accelerate innovation within your organization is to form your own innovation steering committee. The idea is to create a band of senior executive leaders to discuss how they could instill innovation across the enterprise. This may be a good idea . . . creating the so-called “guiding coalition” that drives innovation.
I’m not so sure.
Innovation is not top-down driven. It must become an embedded element of organizational culture. The leader’s role is to find ways to encourage a prudent amount of risk taking, where it is ok to stumble along the way – so long as we learn from and improve upon it.
In my MBA class the other night we were talking about how sometimes organizational structures create barriers and we started considering ways of getting around them. One student talked about her company (in this case a highly regarded organization) which created an Innovation Committee to whom all ideas for new stuff flowed. She told of an example where she came up with an idea to promote conversion of some forms of information into electronic formats, which she believed would save space, and improve worker productivity. So, she dutifully filled out the requisite forms and submitted them to the Innovation Committee. “I received a polite thank you note from them”, she said, “but nothing ever happened.”
How many times do you suppose that outcome needs to happen before employees stop sending information on through channels? Now in her case, she had the determination not to accept silence as an answer, and pursued her idea anyway, which is awesome. But what if she wasn’t quite that stubborn?
It felt, listening to her, that the purpose of the Innovation Committee was to “protect” the organization form a potentially “bad” idea rather than encourage more and more ideas from anywhere.
Linus Pauling, Nobel prize-winning biochemist, was once asked how he came up with a good idea. His response was that “it helps if you start with a lot of them”. It is a simple idea that divergent thinking generating lots of ideas increases the odds of finding the good one. It is one key premise behind innovation and creativity.
If you want your organization to be a product development engine, then it helps to start by being an idea engine. In my mind this isn’t about what you write down on forms for submission to the Innovation Committee. Instead, you want supervisors, managers, and leaders who:
- Create environments around them where ideas are valued, respected, and appreciated. We can do this especially by encouraging ideas that contradict our own. We can do this by sometimes challenging our colleagues saying “I’d like to hear more ideas, the ones we have discussed so far aren’t bold enough”. We can do this by restraining our teams from diving into solutions before they have thoughtfully explored what the problem really is.
- Promote “smart” risk taking. We need to drop our belief that there is only one solution to a problem. If someone has an idea that seems reasonable, why not let them explore it. It might surprise you and work! If not, there is both a learning opportunity for your team and a coaching opportunity for you to gain something from each failure we can apply in the future.
- Are bridge builders. We all know that gaining cooperation from other departments (silos) can be a challenge. When this is too hard, our natural tendency is to focus on solutions that are mostly or totally within our control. We narrow our focus, when a broad solution might be far better. We might implement something, but it will be less likely to be game changing. So, our job as leaders is to form alliances with counterparts in other departments who can help us. We need to be sales persons. We need to offer to help them (building a sense of obligation that you can use later when you need to ask them for help). Or, by reframing problems so that the solution benefits both groups, causing resistance to melt away and making the job of your team members easier.
If you decide to have an Innovation Committee, then at least ask them to focus their energies promoting the ideas we have spoken of above. Get them to promote company-wide competitions for teams that generate the “best” ideas. The prize might be a tangible budget for implementing them. Have special prizes for the ones that link together people from multiple departments. Celebrate and communicate the success stories. Make it seem valued by the organization to find clever new ways of doing things. Disseminate the knowledge. Mayo Clinic’s famous Transform Conference started as an internal best-practice sharing session within the clinic. It has grown from that to a global program where people come annually to talk and think together about how they can make health care better. Notice also that the way they named it speaks loudly to what they think the purpose of innovation is.
Make your organization a bubbling caldron of ideas. When you do, you won’t likely need an Innovation Committee to choose the projects. Your teams will know which ones can best help them. Let your committee be an enabler, rather than a screener of good ideas. There is a big difference.
Innovation Almost Dead. Perhaps Not So In Electricity, by Peter Kelly-Detwiler, Forbes Magazine.
Has the ideas machine broken down?, from the Economist