In April of 2019, 5 members of the Xinova team traveled to Pittsburgh, Pennsylvania to attend the IRI Annual Conference. The conference attracts Leaders in Innovation from all over the globe to talk about everything R&D. While these companies span a wide variety of industries, many innovators were seeking solutions to similar problems.
If you sit in a room with hundreds of global innovation leaders and just listen, you might expect to be bombarded with prophetic musings about future technology that resemble science fiction come to reality. While such reflection will be present, the more prevalent ponderings will be more pragmatic in nature, and more grounded in the present tense.
Such was the case at the IRI Annual Conference in Pittsburgh earlier this month. This conference is an annual go-to event for global innovation leaders from startups to large corporations to “challenge conventional ways of managing innovation and learn how to stay relevant in an accelerated and ever-changing environment.” This brought some of the brightest R&D minds in artificial intelligence, robotics, industrial IoT, autonomous vehicles, virtual reality, and many other leading-edge technologies. Clearly a group of attendees prepared to have a multi-day futuristic dream unencumbered by less-visionary people.
While there was a healthy balance of theory (e.g. digital transformation) and cutting edge technology to go around, we found that the real issues that needed solutions involved human inefficiency and faulty. Problems that are organizational in nature and very timely, which we have extrapolated from attending the conference and offer them below.
While new and diverse ideas to solve problems is welcome, innovation is more limited by a persisting inability to translate a viable solution to business units for commercialization. Misalignment between innovators in R&D and decision-makers in business units prevents projects from being fully commercialized, as incentives between these units are rarely aligned that allow for mutually beneficial collaboration.
For instance, many leaders at the conference expressed frustration that business units don’t understand the innovative technology and IP they develop in new and emerging markets, and thus massively innovative technology won’t make it to the market as the business that would need to commercialize it doesn’t know how. It’s understandable – like R&D, business units are under increasing pressure to do more with less and to deliver revenue-generating results faster. That often results in an incremental focus for innovation that can often be at cognitive odds with longer-term disruptive innovation projects that are often fostered in R&D teams.
The prevailing conclusion, not surprisingly, is that innovation teams need to align closer to their business unit partners. This doesn’t mean they should necessarily be on the same team, but it does mean that R&D will need to be closer to the business, and align its innovations to those goals. That also doesn’t mean that all innovation has to be focused on the quick routes to revenue over long-term disruption, but it means that disruptive innovation will need to be presented in a collaborative manner where the business unit’s interests – generating and protecting revenue – are met long before simply getting innovative technology to market.
This isn’t a traditional core competency of R&D, and it’s understandable for those innovation leaders to be frustrated at the lack of progress as they often don’t feel like the business is meeting them halfway. Some successful companies have circumvented this problem by having a dedicated budget for “innovation” that is separate from the core business, which in theory can facilitate faster decision-making. However, assigning a budget to progress a project is only one aspect of a commercialization journey. What is really lacking is an aligned partner that understands both sides of the fence that can map innovative solutions to the cash flow in a market and design how innovation, or the lack thereof, can result in new revenue or the loss of it. A conversation that is steeped in business first, and innovation second.
The root cause of commercialization issues, and most business problems come down to communication barriers. Communication has been the constant struggle of humans and we as a species have long made significant efforts to further our understanding of each other. There are countless tools available all aiming to bring us closer together and enable communication to take place quickly no matter where participants are. However, we are finding that simply having the tools to communicate doesn’t improve understanding between participants, which is core to communicating with anyone.
What’s needed aren’t more tools that simply enable verbal or written messages to be delivered between communicating parties, but tools that improve and facilitate understanding. A lot of the frustrations expressed at the conference were around not feeling understood. Some people said things like, “They don’t get it.” Or, “They don’t understand what I do.” And it’s not for a lack of effort as those same statements often were preceded with, “I speak in their terms.” But again this issue cuts deeper than just words being delivered; understanding must take place.
In some cases, there are tools that help the communicator better understand who they are communicating to, which helps them effectively land their message. In our case that often means tools that can help R&D teams better align their innovation opportunities and goals to the incentives of the business. Often, communication problems are the result of procrastinated collaboration. Teams involve stakeholders on projects too late, leading to confusion and roadblocks. Tools that incentivize and require collaboration can help solve communication problems before they start, ensuring all parties start and stay on the same page. In addition, they provide logical points of strategic collaboration that brings business unit partners into the innovation process earlier.
Communication is tricky, as we all know it requires equal participation from all parties to truly work. That’s not something that can be forced. But you can mitigate those problems by involving all business stakeholders from the get-go on common language and understanding and proceed from there, rather than trying to bring them up to speed when work is already done.
One tool that most businesses use to align teams and resources is metrics, often used to establish baseline expectations and a mechanism to measure the desired impact as work progresses. Innovation is a difficult thing to measure, as metrics are often used to contextualize a moment in time. But those involved in innovation know that to look at it in such a narrow scope is to not understand innovation. R&D and innovation leaders know they need long-term metrics for innovation that can be shared with business partners for alignment.
The trouble is, that metric doesn’t exist. There are examples of them in pockets but a standard set of metrics that are easily understood and accepted by all have not been established. This may be the point where all communication about innovation in the business breaks down as all parties don’t have common ground to always refer to.
Our experience at IRI confirmed this and that things don’t seem to look all that better than they did back in 2015 when Innovation Leader did research on this very topic. What they found then is what we found recently and that is every company is trying to solve it differently and most often are siloed solutions. That research found that the most commonly used metrics were:
While these metrics aren’t bad, are they the best data points to measure innovation? Modern-day innovation is about market disruption, not simply generating revenue and progressing projects through a series of to-dos. We would argue that the metrics that will truly matter to the business will be about disruption and how innovation will disrupt markets. For new businesses, it can help align all around how innovation is disrupting specific points of cash flow, and in the case of established businesses will point out their future blind spots and where they could get disrupted allowing them to be proactive.
If one thing is clear from ruminating with innovation leaders for a few days it is that the challenges are too insurmountable to tackle them on our own. Collaboration at many levels is not just helpful, it is required. That doesn’t just mean internal collaboration for a company, as many of the previous takeaways have been focused on. In some cases, it may mean a strategic partnership with outside organizations and resources.
This predominant collaboration perspective is likely what has led industry experts to encourage collaboration and partnerships. James Staten, Forrester vice president and principal analyst, wrote in a recent report that we provided commentary on that companies should undertake innovation with a partner, he further emphasized this in an earlier blog post, “Every enterprise should be using an innovation platform to help track, drive, and evaluate its innovation efforts. However, do not limit this effort to an innovation management software solution.” Prior to mentioning Xinova he later added, “To help address this, the leading innovation platforms today have added on new capabilities, staffing, and ecosystem empowerment models to take your innovation efforts to the next level.” From our perspective, your innovation partner should share the risk as businesses need a partner that is aligned with their business and prepared to share the risk of success. The partner can’t be there for only a moment in time, but must be prepared to work on all steps of the path to achieving an innovative goal.
Utilizing external partners for innovation also enables a business or organization to tap into resources around the globe that they don’t currently have practical access to. Traditionally businesses have been constrained by their organizational walls that limit the ability to utilize external resources whether that be talent, technology or capital. That model is shifting and more barriers are being removed that enable external resources to get closer to your business and drive meaningful impact.
There are countless quips about the importance of failure to success, and in startup culture it’s all about failing fast. However, businesses are clearly still struggling to fail in an economically efficient manner and in a way that ensures lessons are always learned as a result. This is often due to misaligned corporate structures that de-incentivize failure, or due to the business’s perpetual fear of failure and avoidance of it at all costs.
Inventors and innovators have long embraced failure and understood its value in learning. While like anyone they don’t enjoy the moment of failure, they understand that each failure is a step further in the process for innovative success. But this isn’t a practice that has been embraced and is long from being perfected by business and is causing a loss in valuable learnings that could contribute to success.
During one particular session at the conference, a panel provided a model for understanding a company’s ability to handle failures. This included understanding the culture around the company to then understand how that culture can best learn from failure and communicate those learnings effectively. In order for failure to be an effective tool in the business, it requires new approaches and models to emerge in business that produces success from failure, rather than tries to avoid it at all costs.
The “fast-failure” concept isn’t without its merit, either, when done appropriately. In many cases, in order for a business to fail fast, it requires them to adopt new models that incentivize them to move on from bad ideas quickly. One way we do that is through sharing the risk and reward of innovation projects.
With our constantly perplexing world we often think of our problems as being futuristic and technical in nature. In our experience, the aggregate of these learnings teach us that our problems continue to be in the present, that only mindful and pragmatic solutions will cure. We must rely on each other to build bridges, to connect, to collaborate, and solve.
These insights are based on our own experience attending sessions and carrying conversations with a diverse set of attendees throughout the IRI event. We know this is only our perspective, and that many other points of view have and will emerge from these discussions. You also didn’t have to attend the IRI conference to have an opinion. We invite you to continue the dialogue with us whether you agree or disagree with our findings. And, if you’re struggling with any of these problems in your business, let’s collaborate and find your solutions.
We asked IRI attendees, “What’s your innovator’s dilemma?”
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