Why an entrepreneurial mindset leaves innovation methodologies dead in the water

150 150 Fusion Labs

In this world of accelerating exponential change, a key driver for leaders seeking success will be their ability to adapt and embrace scalable learnings. Applying best practices regardless of methodology and delivering real, tangible value that matters to real customers.

In a world of rapidly increasing technological change, increased competition and volatile economic times, innovation (and the ability to keep ahead of the market over sustained periods of time) has become a difficult challenge for CEOs. Leaders who still pretend they operate in stable environments and focus solely on operational performance, rigid processes and hierarchical reporting lines are in for a big surprise.

Amidst this uncertainty are the companies who are not quite sure how to respond…

Instead of managing innovation as a strategic priority, they act on impulse and create chaos with scattered tactics like setting up ‘labs’ with the latest technologies and attending startup pitch nights trying to ‘keep their finger on the pulse’.

It’s an “us too” approach, or innovation theatre as Steve Blank calls it…

And while I agree that corporates need to engage startups and invest in emerging technology, it needs to be aligned to a strategy with clear metrics to measure the return on investment.

The companies getting it right understand that an innovation strategy is not a collection of well-constructed sentences painted on the walls like poetry.

Kodak’s poetic words were “We should build a world class, results orientated culture to bring differentiated solutions with energy”, and we all know how that turned out…

Companies like Apple, Spotify and Netflix understand that while strategy makes for impressive reading, it’s only effective if they do three things: EXECUTE, EXECUTE and EXECUTE.

They understand that innovation is not just about having a good idea or a ping pong table in the corner for the creative team. Innovation comes from investment, development and implementation as the building blocks of a scalable, sustainable strategy. Simply put, their cash cows of today fund their future growth. They communicate top down and enable bottom up so that innovation is understood, accepted, embraced and adopted in all levels of the organisation powered by new reporting structures and new ways of work.

Mindset trumps methodology

Anyone who’s worked in large corporates knows that innovation projects (by virtue of their nature) are characterised by high levels of uncertainty. Uncertain markets, uncertain customer needs, uncertain resources, uncertain constraints, changing technologies and so much more.

Market boundaries are blurring, making it hard to predict outcomes. Customers are expecting more and more from the incumbents. To be frank, innovation is a messy business and directly opposes and conflicts with old school processes, structures and KPIs. Getting it right… might hurt a little.

The latest knee-jerk response to this messy business is a race to adopt new ways of work. I call it ‘METHODOLOGY MADNESS’ – becoming fixated and inflexible over a particular methodology, be it Agile, Design Thinking, Kanban, Lean Startup etc.

At the end of the day, they each have their merits, and can work well together.

BUT, it requires a level of common sense about when to apply the right pieces to the problem you set out to solve. Alison Jacobson, a thought leader in digital strategy and a good friend articulates this well:

“Some parts of a business consist of standard work, it’s repetitive and should be made as efficient as possible. This is [6-Sigma] Lean. The end-point of this game is automation and AI (very efficient).

Other parts of the business consist of non-standard work, it’s work we’ve never done before, it requires ingenuity and iterative experimentation, i.e. innovation. We can’t simply automate this, we can only make it more likely to succeed by changing the way we work (Agile, User-centred design).

If you try [6-Sigma] Lean in a context of the new and uncertain – you kill innovation. If you try pure Agile when we’ve done this work before, we know how to do it and we are clear on the outcomes – you introduce waste.”

Innovation, Lean, Agile, Design Thinking

Many mindsets, one team @jonnyschneider

Everywhere I look, companies are training up in Design Thinking, Agile and sending their staff on Lean Startup boot camps. While companies DO need to build this capability, it’s vital they don’t become obsessed with the specific methodologies.

Far too often, I see new initiatives withering away at the vine because new methods are applied without any thought given to how they fit into the context of corporate business processes and nuances. Toolkits and methodologies are great guides and starting points, but only through deliberate practice do you begin to master innovation.

In an era when popular appeal seems to rule, I would like to caution against mindlessly adopting popular perceptions and argue that none of these methodologies are the silver bullet that will save you from disruption. It’s not a one size fits all approach. At the heart of a successful organisation lies the ability to be flexible and learn.

An entrepreneurial mindset accepts that a hybrid-approach is needed, but simple ingredients like cross functional teamwork, customer-centricity, diversity and experimentation are crucial.

Innovation leaders don’t get caught up in the buzzwords because they understand that the focus needs to shift from being a methodology purist to adopting the mindset of an entrepreneur. A mindset that is ever evolving, adaptable and focused on solving customers’ complex jobs-to-be-done. Karen Dillon, co-author of ‘Competing Against Luck’ notes that reason people buy a product is not just for its functional dimensions, it’s to do with the job they’re trying to get done. This requires leaders to also understand the social and emotional dimensions of the job. You can listen to her explaining this theory in more detail here.

Perhaps some of this has resonated with you – you can find me on twitter to discuss @mattadendorff1 and @FusionLabsAU