The following is an excerpt from the forthcoming book, High Velocity Innovation: How to Get Your Best Ideas to Market Faster (Career Press: October 2019).
Over and over again, I see the things company leaders do to accelerate innovation often slow it down instead. They encourage teams to be decisive, only to find that many of those decisions have to be revisited later, when it’s expensive to change the decisions. They accelerate the Investigation Phases of innovation to meet an aggressive time line, and then find that the Execution Phases get bogged down. They staff an innovation team with outsiders for fresh thinking and then wonder why these teams’ products cost too much or fail to resonate with consumers.
Three practices in particular receive a lot of praise in innovation management literature. They have been around long enough that if they had a lot of success, they’d be much more common with many innovations in the market that would demonstrate their value. Although a lot of theory has been written about them as compelling hypotheses, theydon’t have much evidence to prove them.
Conventional wisdom says that if a company’s people are not innovative and the processes and metrics conspire to kill innovation, the best thing to do is to get it completely out of the building. “Skunkworks” refers to a team that has been deliberately isolated from the company’s core and told to “do all the new things we can’t do” or “start with a blank sheet of paper.”
They’re usually located in a remote building or an independent space rather than sitting with their Engineering and Marketing peers. Some innovation authors write as if this idea is a new discovery, but that’s where storied innovation engines like PARC, HP Labs, and Bell Labs came from.
There’s a reason why these entities have become shadows of their former selves: they were not very effective at delivering innovations that their sponsoring companies could implement, and therefore they became targets for funding cuts. PARC’s best inventions, the mouse and the touchscreen, were exploited by Apple, not Xerox. Bell Labs spun out a few successful companies when the parent company was willing to support them, but the breakup of AT&T also broke up their funding for such wide-ranging research. HP Labs incubated a lot of ideas throughout the decades while the founders were still alive and able to keep the teams focused. After they retired, funding evaporated as a series of downsizings and management missteps led to the need to shore up shareholder results.
Even the more recent examples are just as likely to show spin-offs or killed ideas rather than new initiatives that truly create value for the companies that sponsored them.
It turns out that companies, especially the large, well-funded companies that can afford skunkworks teams, have powerful immune systems. Since the people in such efforts are cut off from the rest of the organization in every way but funding and a tenuous connection to leadership, there is no home for the innovations when they come back into the company.
Either these teams develop into standalone entities that are ripe for being cancelled, sold off, or spun off, or they might as well. They have nothing in common with the parent company. At some point, the investment stops making sense. All their management sponsors have to do is change the strategy or leave the company, and all that investment gets put to waste.
Specialist Innovation Teams
Even worse are the proponents of assigning responsibility for innovation to a specialist team, mainly consisting of people brought in from outside the company. At least most companies staff skunkworks teams with experienced people. The Innovation Specialist approach is fun for the people on the innovation teams because they are freed from much accountability or need to learn about their new company and encouraged to do things that are dramatically different than the corporate norms.
But it doesn’t ensure that the teams will get better results and the track record backs that up.
This approach seems to be especially popular with those who study innovation practices academically, who base their hypotheses on the observed externalities of innovation programs. Like skunkworks, these programs don’t have a good empirical record of success. In fact, such teams can become deaf to valid constructive criticism from the company’s experienced personnel, who may have good points even though they appear to be resistant to change.
On the other side, it sends the wrong message to everyone else:
“You’re part of the past but not the future, and as such, you have no responsibility to be innovative.” Some people will love the freedom to pursue an undemanding status quo and others will chafe at the restrictions; either way, the company is not getting the best from its most deeply knowledgeable people.
Startup Innovation for Corporate R&D
Finally, many innovation team leads like the idea of “going back to the garage” and embracing the methods that allow startups to become multi-billion-dollar businesses. But a corporate innovation team, even in a small established company, has both strengths and weaknesses that a startup doesn’t have.
Some aspects of Lean Startup translate well into corporate innovation programs, but these tools are not dependent upon building a startup culture. Today, people who want to work in startups have ample opportunities to work for one or even start one. Even there, the heavy workload is not sustainable and burns people out.
The people who work in a corporate environment have chosen to work in a place with more constraints and stability but fewer sacrifices, but that doesn’t mean they lack good ideas. Such an approach almost ensures that people with families, especially but not exclusively women, will be locked out of innovation programs and the career advancement they can foster because the demands will be even heavier.
All of that might be worth it if it delivered better results. Here, the evidence again shows scant progress toward improving the velocity of innovation. Such a model combines the worst aspects of the skunkworks model and the dedicated innovation team model: the group is “protected” from the current business and exempted from much of the rules, yet they are expected to push ideas onto the rest of the company.
I witnessed this first hand when I was part of the short-lived E-Services Inside Factory at HP Labs. This was an attempt to go “back to the garage” to reinvent how services talked to each other over the Internet, an early form of the API frameworks that drive tools like Zapier. At the time, e-services were a core part of HP’s strategy, and the assignment seemed like it would be a lot of fun.
Yet strong executive support led to lack of accountability and the freedom to do anything, which made it hard to get anything meaningful done, and there was no place to commercialize the interesting stuff we did manage to build. I was relieved when I moved back to the core printer business, which needed innovation and knew how to deliver it.
Tesla demonstrates these perils, because delivering a new mass market car is very different from delivering a new service, or even a limited-edition sports car. Tesla’s development process, still grounded in the founder-centric worldview of the startup, inadequately met the challenges that this mainstream car presented about how to scale up production volumes and lower cost.
Katherine Radeka is the founder and executive director of the Rapid Learning Cycles Institute, and supports a growing global community of innovators who are using High Velocity Innovation to get their best ideas to market faster. She has worked with companies on six continents, in industries from aerospace to medical devices pharmaceuticals to consumer electronics and alternative energy. Radeka began her focus on innovation while working as a software development manager for the E-Services Factory at HP Labs.