Future of Work
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Leadership support
This the first and most important thing to have in place. Without leadership support, most innovation initiatives are dead on arrival. Leadership support means more than just resources and financial support. Leaders also need to dedicate their time and attention to innovation. This is hard to do when leaders have other important work related to running the core business. Ambidextrous leadership is now an essential skill for running contemporary companies, however.
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A balanced portfolio
Next, leaders and managers need to recognise that large companies are not startups, nor should they strive to be. Telling large companies to act like startups is bad advice. Instead, every large company needs to be exploiting its core products for current success. That is key to keeping the lights on, creating value and paying salaries. At the same time, companies need to be exploring new opportunities for future growth. This is the hard work of preparing the company for the future. As such, every company needs to have a portfolio of value propositions and business models to both exploit its core business and explore future opportunities. The key discipline is for leaders to understand that the way they manage their core business is not the same as the way in which they need to manage innovation.
3
Right thing, right time
To deliver on innovation, teams need to adopt an exploration mindset that allows them to test their ideas within the market before scaling. It is critical to find a real market need before we start creating a solution or executing on a business model. There is nothing worse than making products that nobody wants. This is a waste of time and important resources. Companies need to develop an innovation framework for taking ideas from concept to scale. This framework should be based on the lean startup principle of doing the right things at the right time.
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The Lean Product Lifecycle
While I was working at Pearson, the global education FTSE100 company, I was involved with creating one such framework. Pearson produced The Lean Product Lifecycle to manage innovation and also core product development. The framework has six stages: 1 Idea Capturing ideas and aligning them to strategy. 2 Explore Investigating the problem and opportunity. 3 Validate Achieving product market fit with a sustainable business model. 4 Grow Accelerating the business and maximising market penetration.
Innovation
INNOVATION REQUIRES LEADERS TO DRIVE CULTURAL CHANGES
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5 Sustain Sustaining market dominance and maximising profits. 6 Retire Recycling residual value and freeing capital for innovation.
At each stage, teams are expected to engage in specific innovation activities. For example, the Explore stage is about testing customer needs, while the Validate stage is about testing the solution and business model. Only when these key elements have been validated can a team then enter the Grow stage to execute and scale their solution in the market. This is what is meant by teams doing the right things at the right time.
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Right question, right time
To lead innovation teams that are doing the right things at the right time, leaders need to ask the right questions at the right time. During the early stages of innovation, leaders who ask teams to create business cases with five-year revenue projections are asking the wrong question at the wrong time. When managing innovation, we expect leaders to ask the appropriate questions for the stage a team is in. For example, a team that is still exploring customer needs should not be asked about how much money the product will make in year five. This is where the Lean Product Lifecycle can help. By providing guidance on what is expected at each innovation stage, it enables leaders to set expectations and ask the right questions at the right time.
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Incremental investing
Connected to asking the right questions at the right time is how companies make investments in innovation. Instead of investing large amounts of money upfront based on a business plan, leaders can begin by making small investments in innovation projects. These small investments can then be increased as teams demonstrate progress across the innovation stages. By making small bets, companies can increase the number of ideas they invest in – which, in turn, increases the likelihood they will find something that works. Making small bets also makes failure affordable and easy to accept. It is hard to accept failure when millions have been invested in an innovation project. Adopting these six management practices can help large companies to innovate like startups. Implementing innovation does require leaders and managers to drive cultural changes, however. This is necessary, because if these changes are not made, it will be hard for their elephant of a company to learn ballet. Dr Tendayi Viki is managing partner at strategy and innovation consultancy, Benneli Jacobs. He is the co-author of ‘The Lean Product Lifecycle: A playbook for making products people want’