Last time (‘Putting a square peg in a round hole?’), I discussed ways to embed creative innovation methodologies in ‘non-creative’ organisations. Now, let me explain what type of innovation this process can lead to. In particular, I want to explore how radical innovation can thrive.
Radical vs. incremental innovation
‘Radical Innovation: How mature companies can outsmart upstarts’ by Richard Leifer et al, describes a five-year study of twelve projects within ten large, mature US companies including IBM and DuPont. The projects are defined as radically innovative because they ‘deliver[ed] a product, process or service with either unprecedented performance features or with familiar features that will enable market transformation through significant performance improvements (five time better or more) or cost reductions (30% or more). They are not concerned with exploiting current lines of business, but with exploring entirely new ones, and not created in skunkworks but within the organisation”.
Leifer and Co. conclude that radical innovation is a long-term, bumpy, and unpredictable process. It usually lasts more than ten years vs. incremental innovation, which typically lasts six months to two years). Over these ten years, many things will change – leadership, management, teams, policy, and customer needs and wants. On top of that, outside shocks will likely occur.
Everything about radical innovation is uncertain, and as its name suggests, radical innovation really is radical – with new innovations often cannibalising existing products or services, and leading to a game-changing event. This is not limited to new products, but also to entire organisations themselves. It is no wonder that many companies fear giving it a go. In today’s world of fast job churn and 3-to-5 year management terms, incremental innovation still dominates. Most companies are happier to be first-followers than to ride the roller-coaster of the first-movers.
How to embed radical innovation
Radical innovation’s long timescale throws up questions about how to embed innovation into organizations, which I talked about in my previous blog. In particular, it makes difficult IDEO’s belief that the best results come from a ‘hot team’ whose members all stay on the project for its duration.
Leifer and his co-authors also promote the use of small teams for radical innovation. But they believe these teams will change and grow through the projects lifecycle, as people move on and new skills are required. Additionally, where IDEO’s Tom Kelly suggests that hot teams should include ‘T-shaped personalities’ (those with cross-disciplinary skills – both analytical and empathetic). Leifer stresses such individuals, ones which he calls ‘multifunctional’ (those with curiosity, passion for a challenge, a high level of technical or analytical skill in one area, but experience and interest in others) alone should make up the teams. He believes a multi-disciplinary team with different personalities will produce only incremental innovation.
Interestingly, Leifer and his team also emphasise the importance of the individual over the team. They say that most companies’ radical innovation comes not from a process or team, but from a ‘corporate entrepreneur,’ or what we might today call an ‘intrapreneur’ – an entrepreneur within a large firm. That’s someone who is resilient, willing to take risks, is driven by personally-set goals, and fearless of potential failure. The identification, recruitment, support, and retention of these individuals, they argue, is key for radical innovation.
Many of IDEO’s Deign Thinking based recommendations however, do match Leifer’s own thoughts:
• Promotion of fast and rudimentary prototyping – speed is of the essence with the goal to learn from mistakes
• Innovation must be iterative – especially considering the many internal and external changes that occur in long time-scales
• Development of a culture and environment that tolerates failure and supports creativity
• Creation of new organizational structures, job roles, and good leadership to drive this culture.
Leifer and his co-authors suggest the following changes (to name but a few) that mature companies can make to ‘outsmart’ the start-ups and embed radical innovation:
• Create interconnected innovation hubs to gather information, learn from mistakes, identify strengths, and build a flexible process for radical innovation. That’s something most venture capitalists and entrepreneurs don’t have the time, resource, or man-power to do.
• Support and promote radical innovation. Mentors and in-house champions must come from the top-tier of an organisation, as well as from within a company’s informal internal networks;
• Hold reasonable expectations of radically innovative projects and create appropriate metrics on which to assess them, and their participants. This is of particular interest to me. Often company’s existing assessment and incentive systems are inappropriate, or even counterproductive for radical innovation. They are based on certainties and success, and reward only with money or titles. Most radical innovators are motivated by personal goals, not external rewards (something I will come back to in the future). Radical innovation participants also need to know their jobs are not contingent on project success. And companies must reward inviduals’ participation and perseverance to encourages others to participate.
Leifer’s study is useful, but a note of caution is merited. The authors’ focus is on the co-existence of radical innovation within R&D departments and mainstream company operations. And little is mentioned about systemic radical innovation. This raises the bigger question: Does radical innovation belong solely within R&D teams? Or, should it be systemic? Check back in for my take on this soon.