“We’re too big.”
“We’re not a startup.”
“We’re not ready.”
“We have the wrong culture.”
“We acquire innovation.”
Although every organization faces unique challenges, we see the same excuses repeatedly why established enterprises can’t do “real” innovation.
Here are the top 5 to be aware of and some ideas on how to overcome them.
1. “It’s not my job.”
Go ask some of your co-workers who they think is responsible for innovation.
What kind of answers are you likely to get? Obviously, it’s the product team’s. R&D. The C-suite is ultimately responsible. It’s our internal startups: that’s why we have an incubator. Duh.
The one thing they can all agree on is that it’s not theirs. Innovation is somebody else’s job.
Sales says they just sell whatever the product team delivers. The product team says they struggle to keep up with a long list of features required by product management. Product management says feature requirements come from sales. The finger pointing goes on and on. And that’s just for incrementally improving existing products!
Part of the problem is understanding what is meant by the word innovation itself. There’s a pervasive myth that suggests that all big companies need to get better at disruptive or breakthrough innovation. They don’t. And they can’t anyway. No one can. Would anyone say that startups, in general, are good at breakthrough innovation?
Most big companies struggle to compete in existing markets. What they need in order to be more competitive may or may not require technical innovation. To start, they need to be closer to their customers, be more agile, act bolder. This means everyone.
It means breaking down traditional silos. It means acting more entrepreneurially.
A culture of entrepreneurship snowballs. What starts out by producing small process improvements may result in incremental (and perhaps eventually, breakthrough) innovation.
At Intuit, MTN Co-Founder Aaron Eden started the snowball by running “LeanStartIN” workshops under the radar to teach lean startup to small handfuls of colleagues. Fast forward several months and 100 new internal startups were built resulting in nearly $90 million of value created within one year.
Do we care whether the $90 million came from disruptive innovation? Of course not.
Not everyone will be an innovator, but innovation can come from anywhere. It’s everyone’s job. To get started:
- Run internal lean startup hackathons, where the process rewards iterative learning over solution building.
- Form a monthly meetup (like a happy hour) for all employees interested in design thinking and lean startup ideas.
- Create an internal blog or newsletter sharing internal experiments, impact, as well as all things lean innovation going on in the outside world.
2. “We need more big ideas!”
The overall quantity of ideas is not what makes a company more successful. Instead, the number of ideas that get tested and eventually implemented is.
We’re horrible at predicting which ideas are likely to be successful, let alone BIG. It’s understandable that senior management — people who have successfully executed in known markets — believe it’s their responsibility to pick and choose ideas that will lead the company to future success. Unfortunately, it doesn’t work that way. The world is too complex, the needs of customer too varied, the competition too fierce for the smartest people in the room to predict the future.
Ideation, invention, and innovation are not synonymous. Most businesses do not have a shortage of ideas. Most businesses do not have a problem with technical risk. In other words, most businesses know they can build a solution. Those that face technical risk likely have large R&D groups, who are measured by a number of patents produced (invention). Where most businesses fail is in taking the invention to market or mitigating market risk.
Since we can’t predict the future and (generally) know we can build the product, the trick is to prioritize ideas and kill bad ideas quickly. Those organizations who do in-market experimentation (not traditional market research!) move fast, generate evidence to support continued investment, and are more likely to roll out great ideas to gain competitive advantage.
To get started:
- Identify lagging products and run experiments to reinvigorate or kill.
- Approach newly funded initiatives, identify uncertainty, and run experiments to lower risk.
- Use experimentation to tackle a senior leader’s internal process issue.
3. “We don’t have time.”
Giving employees time to break from their daily routine work and think creatively can lead to positive outcomes. Google has ditched their 20% free time rule because although it sounded nice, it wasn’t leading to the results they wanted. But, they’ve replaced it with dedicated time for new ideas.
The Industrial Age was an age of execution. We taught and managed employees across the organization to execute on known processes. We sought to automate them like the robots on the factory floor. But, we’re not in the Industrial age anymore, and robots can’t discover new value (yet!). We must find ways to unleash the creativity and inspiration that lives in all of us.
Building confidence in successful outcomes for new product initiatives starts with building a foundation for a new way of thinking; a new way of working across our organizations. It begins with building entrepreneurial spirit across your organization.
We focus our efforts on driving the 3 E’s of Cultural Change: Educate, Enable, Empower. It begins with teaching the capabilities, then building the support systems, and finally transforming the culture in a profound way so that people become empowered to act boldly.
To get started:
- Don’t get hung up on language – use the words that resonate, that are already a part of your values, mission, and corporate objectives.
- Invite operational colleagues – legal, HR, IT – to your lean innovation group.
- Don’t pitch solutions, pitch evidence.
4. “We already know our customers!”
Over time, organizations accumulate their own perceptions about their customers. These beliefs become encoded and are rarely challenged or updated. They turn into deeply held assumptions that are not backed by market evidence. Market research unwittingly seeks to enforce the assumptions, rather than work to validate or invalidate them.
We’re very good at classifying our existing customers, such as with demographics, but poor at understanding what motivates or inspires them.
Worse, in heavily silo-ed organizations, people operate without even keeping the customer in mind. Employees focus on their tasks because that’s how their performance is measured instead of working to make an impact based on creating value for their customers.
At the core of Lean Innovation is customer empathy. By seeking to learn from customers directly through design thinking practices as we teach in our LEAP lab eCourse, we seek to understand needs and desires, pains and passions. We hope to gain deep customer insights that open new opportunities.
To get started:
- Go observe your customers within the context of your business. (If you sell to restaurants, ask a manager if you can watch what goes on “behind the scenes.”)
- Practice interviews, paper prototyping, and behavioral experiments on fellow employees at your company cafeteria.
- Use the “flipping the conversation” technique 5 times this week by talking to prospective customers about their problems, not your product.
5. “This doesn’t work in my industry.”
To go one layer deeper, we hear these on a regular basis:
- This doesn’t work in b2c. (Eric Ries came from b2c.)
- This doesn’t work in b2b. (Customer Development came from b2b.)
- This doesn’t work in hardware. (Hardware always does prototypes; now use to reduce market risk.)
- This doesn’t work with network effects businesses. (Start with a closed group.)
- This doesn’t work in regulated industries. (Works in finance, insurance, healthcare…)
- This doesn’t work in government. (See City of Hayward.)
That about covers our entire economy, no?
We’ve tackled all of these, including two of the most heavily regulated industries, insurance, and finance.
In the cases where regulation is an issue, check out our article on How to Run Experiments without Compliance Wanting to Kill You. Instead of operating under fear, work collaboratively with internal groups to create guidelines for running experiments.
Ask yourself and your leaders the “Why not us?” question:
“Recall a failed product and how much was invested in it. Looking back, can you think of anything you might have done that might have indicated early on that the product was doomed to fail?” This is the essence of Lean Innovation: Empathy, Experiments, and Evidence applied looking forward in order to not fail big, rather than backward and lamenting the millions of dollars in waste.
Kill bad ideas quickly. Invest in tranches based on “innovation accounting.” Apply lean innovation across the business model, not just products.
To get started:
- Have the “why not us?” conversation with colleagues and leaders.
- Invite legal or compliance leaders to lean startup hackathons.
- Many operation group leaders are tired of saying “no.” Ask them, “how can we begin running experiments?”
Excuses are a trap. You can either let them stop you in your tracks or treat them as quick little speed bumps to hop over. It may take work to overcome your challenges, but you can’t overcome obstacles until you run into them. There’s no such thing as getting the organization ready for change prior to change. You have to do the work.
What’s the excuse you hear most often?