Rewarding Innovation heroes. Launching accelerators with great fanfare, then not following through. Making big claims about organizational transformation that never amount to anything. It’s all innovation theater and it won’t drive long-term benefits for organizations. A better approach is to make innovation a proficiency, using the principles of discovery driven growth.
RITA MCGRATH | THOUGHT SPARKSLast week, we wrote about the episodic way in which innovation is managed in most organizations. Or not managed. In fact, it’s innovation theater. Based on Stanford’s Robert Burgelman’s research, we described ways in which innovations can end up being treated like orphans, being the subject of an all-hands drive, being irrelevant or being the subject of a rushed and desperate effort to make something new happen, often in response to some kind of burning platform memo.
The boom of the past few years has had predictable consequences. VC’s flooded new ventures with cash. Firms like Facebook and Google were seemingly printing money out of thin air. Even in the face of the pandemic, many companies were thriving. So what happened? An enormous amount of innovation theater. Totally predictable.
Consider the metaverse. The shiny object of just a couple of years ago, metaverse projects were sponsored at Microsoft, Disney and of course famously at Facebook which rebranded the whole company “Meta” to signal commitment to this hot new space. Fast forward to 2023 and all those hugely important and heavily funded metaverse projects? As a recent Wall Street Journal article wise-cracked, we’re looking at the “Meh-taverse” now, and many of those projects are being shut down or radically shrunk.
I’ve been studying corporate innovation efforts that go wrong for years. And the pattern is very common – it’s trying to force-fit new things into the model that works well for things that are predictable. So a company has a great idea (or what it thinks is a great idea). It immediately puts a big team on it, fully funds it, creates an 18 month launch plan and perhaps issues a big splashy announcement, before you’ve done any of the thinking that’s need to reduce uncertainties (a point also made by our friends Bent Flyvbjerg and Dan Gardner).
You know all those layoffs, downsizings and other ailments we’ve been reading about with respect to tech? Guess what projects those people were most likely working on? Yup. Read between the tea leaves. Disney is cutting 7,000 jobs in the interest of “streamlining” its operations. When they say they are streamlining, what that usually means is getting rid of all those distracting, non-core operations, like, for example, the metaverse project. A huge number of other tech (and some non-tech) firms are laying off people. The buzz words are all around us. Mark Zuckerberg declared 2023 “the year of efficiency.” That’s code for “we’re going to stop doing all this crazy, unpredictable innovation stuff and hunker down to defending our core business.” Like many other organizations, they are “focused on becoming a stronger and more nimble organization” –same implication.
Rita McGrath | Thought Sparks
Here are some things we know. Depending on fast-following or big acquisitions is highly risky. As the pace of competition increases, by the time you have followed, an innovator is likely to have already moved on. Further, if you haven’t built internal growth capability, your ability to fast follow is likely to have atrophied.
The track record of big acquisitions is terrible. Depending on which study you read, the failure rate is somewhere between 70% and 95%.
WANT
