“Innovation” has got to be one of the most overused, ambiguously-defined words of the modern day. What counts as innovation? Arranging desks in a new way to speed order processing? A new way to pack boxes in the warehouse that increases throughput? Post-its? The iPhone? The Internet?
Yes. All of those things. Any time people create value by implementing a new idea, they are innovating at some level. That’s why I’ve spoken on the idea of building a “culture of innovation” throughout a company. Innovation, far from being a lucky accident, is a process that can be planned and supported. And building it into the company culture can help everyone in the company think with an innovation mindset.
Working with an innovation mindset means not only seeing opportunities for improvement but understanding the process for bringing that idea to fruition and knowing that that idea has somewhere to go. Ideas are important, but they’re also a dime a dozen. Turning that idea into real value– for the company, the employees, or society– is hard.
Now, I’m not suggesting that those ideas shouldn’t be treated with respect. One of the first things I did in my role leading the start of the innovation circle at Zappos was to build an idea management system to open up communication, record great (and not so great) ideas, and give everyone an opportunity to register their input and interest in working on the ideas.
But, typically, the person with the idea isn’t the person who can make it real. An engineer might have an idea for advertising in a new way, but they don’t have the ability to make those changes or the knowledge to understand the ramifications of such a thing. What’s more, a real disruptive innovation, like a new line of business, takes many people working together and a pile of money to give that idea even a chance of seeing the light of day.
A real culture of innovation requires a concerted effort to connect, educate, and support everyone in the company to give their ideas a fighting chance. It requires leadership to make decisions about what’s worth investment and to explain clearly why (or why not). None of those pieces are going to happen spontaneously. They need to be planned, tested, iterated, and continuously supported.
Building that culture of innovation also isn’t free. Resources must be allocated to manage those cross-functional connections, training, tools, idea vetting, and investments required to manifest the employee or customer ideas. And those resources must be evaluated differently than an investment in a new machine or additional headcount in a production department.
Data is an input to help you define a strategy or modify it, but cannot replace what is inherently the uncertain side of innovation.
— Steven Sinofsky, Andreesen Horowitz
Data is not always a substitute for strategy
This is where real, talented, visionary management is required. This investment in innovation must be made, to a large degree, on faith that it is the right thing to do. When Zappos committed to empowering their customer service reps to do what it took to make their customers happy, it was swimming against the current of customer service of the time. No scripts, no upselling, no time limits on calls? Tony Hsieh knew that it was the right thing to do, even if there were no metrics to graph to prove it. That vision has paid off handsomely for Zappos, the standard bearer for quality customer service.
Even Intel, the microprocessor king, once faced a strategic decision point, memory vs. microprocessors, that was not only uncertain but actually clouded by available data. Andy Grove had to step back and ask himself what he thought was the best choice for the future of the company and got out of the memory business.
[Intel’s Andy] Grove’s story reveals a flaw in the way many experts think about decisions. If you review the research literature on decisions, you’ll find that many decision-making models are basically glorified spreadsheets.
Chip and Dan Heath, Decisive
Both choices may seem obvious now, but they weren’t at the time. They were expensive, unpopular with many, and flew in the face of many interpretations of a good investment. Still, these leaders believed in the underlying principle and potential of their choices and stood by them.
In the same vein, a systematic investment in supporting a culture of innovation will yield long-term dividends that may be difficult to attribute directly to those investments. And while individual projects can be treated with the Lean methodology, for instance, and steered by the star of objective data, the investment in the larger supportive structure must be seen as investment in maximizing the potential of all employees– something you just can’t measure.