INNOVATION CULTURE IS A PREREQUISITE FOR SUCCESS
When the upper management in an organization help to create the framework for healthy/developing conflicts, and project managers are professionally and personally able to handle conflict, development in an organization becomes possible. This creates the foundation for a culture of innovation.
Well-known innovations, like the iPad, don’t come out of thin air or as the result of a “problem-solving” meeting. They occur in an environment, where there is room to disagree and where tons of good, bad and crazy ideas are continually happening.
Having a culture of innovation culture doesn’t mean that all traditional projects and work within the organization should be put on standby. It means that there should be room for disagreement during project development, between projects, and upper management genuinely appreciates when temployees present ideas – including the bad and nutty ones.
When was the last time you celebrated the best idea, which turned out not to be marketable after all?
THE DIFFERENCE BETWEEN DEVELOPMENT, INNOVATION, AND DISRUPTION
We rarely hear about innovation without the word “disruption” being mentioned. What happens in most cases is often something more down-to-earth, namely development.
Let’s get the concepts into place.
Development deals with gradual improvements, which happen as a natural consequence of thinking about and working with a product or service.
An example of a development is a smartphone getting an improved camera.
Innovation is a process as well as a result.
For a result to be an innovation, it must be a real and evident breakthrough (not just an improvement).
An example of innovation is when Apple invented Live Photos.
The innovation process is the work that leads to innovation. There is no definite recipe of how an innovation process should look, even though there are many processes and tools that can inspire and motivate development and innovation. In upcoming publications in this blog, I want to share some of my perspectives on these. For now, I’d like to refer to some other solid writings that hopefully will inspire.
For inspiration, see the article “What your Innovation Process Should Look Like” from Harvard Business Review, which gives insight into the core elements in a good innovation process.
Another concrete example is Pretotyping, that within digitalization is a popular approach – for example, take a look at this interesting article from Medium: “Break the Innovation barrier with Pretotyping”.
An important cross-disciplinary point is – notwithstanding the innovation process – that for the innovation to blossom, it is essential that the team that works with innovation is assembled correctly – and a conflict environment is created where innovative ideas can occur. We’ll look at that more closely later on.
Disruption means destruction or disturbance.
Contrary to innovation, disruption is exclusively a result – and disruption is most often seen in hindsight. If an innovation becomes disruptive (and thus implies disruption) it’s not anything you can analyze in advance – but of course, it can be a preliminary ambition when the innovation process starts. This convergance between an ambition to create disruption has caused consultants to erroneously see disruption and innovation as equals.
An innovation becomes a disruptive innovation when the innovation is so significant that it disturbs or even destroys what had so far been successful industries and business models.
Let’s look at some examples to get the context in place.
PERSPECTIVE AND EXAMPLES OF DISRUPTION
With the abovementioned definition, it’s apparent that an innovation like the smartphone has induced disruption – and particularly in many areas that have nothing to do with telephony. On the other hand, how much should an industry be disturbed before you can talk about disruption?
For example, has Airbnb’s business model disrupted the hotel industry? To some extent, I would say.
When a municipality applies a software robot to assess and manage forms and documents – is that disruption? Not so much. My belief is that the latter is just the use of a well-known innovation in a given context that causes a development for the processing of forms in the municipality.
STARTUP WITH AN AMBITION FOR DISRUPTION IN THE NEWS INDUSTRY
Another example from my own real life.
In one of my companies, NewsButler, we are working with a new and innovative digital platform for the presentation of news – a kind of “Spotify for news.” This is an innovation, and nothing more. But NewsButler has the potential to create disruption in the news industry, if we are good enough and lucky enough.
If it turns out that we are able to introduce a new digital business model in the news industry that changes the existing hierarchies and paves the way for new players – then we can say that we’ve been a part of disrupting the news industry (and I sincerely hope that I will be allowed to say that some day!).
But until we see the results, it is “just” an innovation. It is also worth mentioning that even if NewsButler doesn’t cause disruption, it doesn’t mean that it was a bad idea. If we construct a solid media firm using our innovation and technology, that’s also ok. Everything new doesn’t need to result in disruption to be a success.
Technology can in itself be disruptive without necessarily being tied to a concrete solution. Blockchain, as an example, will probably disturb a range of different sectors (in addition to the finance sector).
DISRUPTION IN THE FINANCE SECTOR
An interesting example of disruption in the finance sector that essentially has nothing to do with technology is the innovation of low-cost index funds. It has revolutionized parts of the investment market – especially for the benefit of regular people saving up.
The famous podcast, Freakonomics Radio, has both an entertaining and insightful episode about this subject, titled The Stupidest Thing You Can Do With Your Money.
THE RIGHT COCKTAIL OF INNOVATION CAN LEAD TO DISRUPTION
When companies want to work with disruption, then in most cases, it deals with innovation. If you combine innovation within digitalization, technology and business models, then you have a cocktail that can lead to disruption, if you are really good (and if you have a little bit of luck with you).
THE COMPOSITION OF INNOVATION TEAMS IS CRUCIAL FOR SUCCESS
For organizations to have a chance to succeed by developing something really innovative, the teams who that work with innovation must have the right composition and be positioned in correlation to the business.
An innovation team that is similar professionally and culturally will typically have a large professional depth within a limited area. This runs the risk that the team (and thus the innovations) becomes short-sighted and segregated from the rest of the company. This kind of disconnect does not lead to innovation – but to development within the area where the team has the professional weight.
When an innovation team is very different professionally and thus has a wide professional focus, it provides a much better anchoring in the company as a whole. Therefore, it is much easier for the team to gather ideas from a surrounding organization, and this contributes to the fact that it is easier to utilize the collected idea potential that exists in all companies. This heterogeneous innovation team is thus a precondition to have success with innovation.
The placement of an innovation team in an organization must ensure that the team has a real possibility of execution without being disturbed by “daily work” (in any case, in the timeslots that are dedicated to the innovation work).
Innovation does not come from the team alone – more is needed, namely conflicts.
“For good ideas and true innovation, you need human interaction, conflict, argument, debate”
– Margaret Heffernan
FRICTION AND CONFLICTS LEAD TO INNOVATION
What is needed to make the innovation team innovate?
The American entrepreneur and writer Margaret Heffernan, has very concisely explained it as “For good ideas and true innovation, you need human interaction, conflict, argument, debate.”
Friction between people can either be stimulating (constructive conflicts) or unstimulating (destructive conflicts). The difference between if a conflict being constructive or deconstructive is just the way you handle it – when the settings are safe, the conflict creates positive energy and development. In other ways you have to develop a healthy conflict environment if you really want to make a foundation for friction and through that, development and innovation.
A healthy conflict environment is characterized by confidence and room for respect of different opinions and attitudes. It signifies a common understanding and acceptance regarding conflicts and how to handle them. The larger the degree of confidence, the more safety is provided for the employee to express opinions and contribute to alternative, creative suggestions.
When you lead a team into (developing) conflicts you have to pay attention that people are very different in how we experience conflicts – also the educational ones. Some people have a hard time with disagreements while others thrive or are motivated. You have to pay attention to this when composing an innovation team.
For example, if a team is composed where the provocation limit (the limit for when you feel provoked or where internal tensions become uncomfortable) is low, development/innovation will be more difficult than in a team with a high provocation limit. You have to be very aware about handling the tensions and conflicts that occur when a team consists of participants with both low and high limits of provocation. The participants who have a low limit of provocation might experience the innovation process as very uncomfortable and have a feeling that they are being overruled.
All the conflicts can be constructive (stimulating) or destructive (open conflicts) – it is just how you handle them that determines the outcome.
This matrix can be utilized to get an overview of where a group might be, in comparison to the conflict environment. The single field is not a diagnosis, but can be seen as a risk or an opportunity that should be analyzed. For example, there does not have to be hidden conflicts if the environment in the group is characterized by distrust and immediate agreement, but there is a breeding ground for it to arise.
In groups where there is a high degree of trust and obvious agreement, it’s beneficial to create debate, disagreement, and thus, developing conflicts. This can, in the right contexts, be the basis for more and better development and innovation than if the team continues with “business as usual”.
SUMMARY AND FURTHER INSPIRATION
When an organization wants to innovate, you must:
- Be aware of what innovation is and is not
- Create the right team, which is heterogeneous, deeply anchored and has peace to do its work
- Establish a healthy conflict environment
- Support a strong innovation culture management-wise, for example, by celebrating all innovations and insight healthy conflicts and debate
Of course, there are many other ingredients to succeed with innovation, including that the organization’s management/governance processes must not clamp down on innovative experiments (for example, with a strict and inappropriate budget process). I would recommend that you read more in the articles – The 5 Requirements of a Truly Innovative Company and 10 Tips for Successful Innovation Teams.