The only way to build an innovation culture — relentless experimentation
Innovation, eh? It’s the new normal, isn't it? Read the business press and you'd think their 'VUCA world' was near apocalyptic. Any moment, a tech upstart could whip the ground from under your feet with an app and a minimum viable bean bag. No wonder so many of us have caught innovation-fever.
But really, what does it mean?
Is it a corporate value? Twenty-two of the FTSE100 seem to think so, but this doesn't seem to correlate with share price or performance.
Is it research and development? And if so, how come Apple has consistently spent less on R&D than its competitors in the last decade, yet still come out top? How come Booz and Strategy& find no link between the investment of the largest companies and their growth metrics?
Revenue and R&D costs for the last year (in millions of dollars)
Ask any innovation leader and I suspect you'll get a similar flick of the wrist - 'well innovation goes further than values or research and development'. Some might even have a magic formula to illustrate their point:
innovation = [(research + customer value) x business model]
to the power of purpose.*
*For the avoidance of doubt, I made this up.
Stick it in a triangle shape and you’ve got yourself a fully-fledged disruption model – and why not? If leaders don’t know what they're trying to achieve, how can they go beyond platitude? The merry-go-round continues to spin.
A different perspective - think small and experiment.
We should start with an obvious question - is innovation good? If we're honest, it depends, doesn’t it? If I clicked my fingers and everyone in your organisation started innovating the whole company would probably grind to a halt. Innovation has some likely side effects to contend with – you’re more likely to fail than you are to succeed, it’s cognitively exhausting so you’ll have to invest heavily in human resource, and it’s riskier than building on an established idea or model.
Add them up and it would seem like a genuine quest for innovation would need you to concentrate your efforts. That means defining a specific problem before you start a project – who would you like to 'innovate' and what element of your business would you like them to improve upon? Why is that more valuable than opportunities elsewhere?
Let me use an example of hospitals and ‘hygiene culture’ to illustrate why these questions are important. In recent years, MRSA has spread throughout hospitals because of unhygienic conditions. A cultural and behavioural change is needed: better hygiene among healthcare professionals. But this macro-objective, similar to innovation culture, is the compound sum of a series of small actions.
Over in the US, one such action stood out for researchers Adam Grant and DA Hoffman — are healthcare professionals washing their hands after using the bathroom? The measure identified for this outcome was the amount of soap used in the dispenser.
The behavioural outcome gave the researchers a focus for their intervention design and the measure allowed them to test its effect in an experiment. In this instance, Grant and Hoffman explored two reminder messages: one based on self-interest motivation - ‘wash your hands or you could get sick’ - and one based on prosocial motivation - ‘wash your hands or your patients could get sicker’. The prosocial sign increased soap and gel use by 33% per dispenser and healthcare professionals were 10% more likely to wash their hands. It's not anywhere near a complete answer, but it's a start...
What's this story got to do with innovation? Four things.
- The defined problem.
- The outcome and measure.
- The intervention design.
- The (randomised controlled) experiment to test its effect.
If you need a formula for innovation culture, those are the four steps to promote - it's a secret behind some of the most successful organisations in the world:
Here's Jeff Bezos at Amazon: "To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there. Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day..."
"Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day..."
—Jeff Bezos, Amazon
Ginni Rometty at IBM: "With really smart people, they try things, they experiment. Some of them work, you codify them, put them in management systems, you react to what happens."
Eric Schmidt at Google: "Our goal is to have more at-bats per unit of time and effort than anyone else in the world".
And Mark Zuckerberg at Facebook: "One of the things I’m most proud of, that is really key to our success is this testing framework … At any given point in time, there isn’t just one version of Facebook running. There are probably 10,000."
"At any given point in time, there isn’t just one version of Facebook running. There are probably 10,000."
Mark Zuckerberg , Facebook
But the beauty of the experimental approach is that it isn't the preserve of god-like superstars and their mega-corporations. It's for anyone who wants to do things differently - to innovate without fear and learn about their impact.
You can start today.