Innovation isn’t just popular, it’s good for business.
As customers, we value innovation, especially when it enhances our self-image. (We’ll pay more for something if it makes us look innovative.)
If you ask people if they’d like to work someplace innovative, most people would say, “absolutely!”
When asked what it means to be innovative, most of us say things like willingness to experiment, psychological safety, collaboration, non-hierarchical, tolerance for failure. All the fun stuff.
Sounds great. Sign me up, too.
But there’s something missing.
The fun stuff has to be grounded in rigour and boundaries.
Without rigour and boundaries, organisations struggle to coordinate and execute in a strategic, logical fashion. (Are you focusing on the right things? Do you know what the right things are?)
It leads to frustrated employees and customers and an uphill battle for ROI.
Is innovation misunderstood?
Innovation seems to be almost universally loved but it’s difficult to implement well and sustain.
In “The Hard Truth About Innovative Cultures,” Harvard Business School Professor Gary Pisano says, “the easy-to-like behaviours that get so much attention are only one side of the coin.”
“They must be counterbalanced by some tougher and, frankly, less fun behaviours.”
Specifically: a willingness to experiment requires rigorous discipline. Collaboration must be balanced with individual accountability. And psychological safety requires comfort with “brutal candour.”
In focusing on the “fun” parts of innovation, organisations are neglecting the boundaries that give shape and focus to our efforts.
(Think about it: no one likes staring at a blank piece of paper. We vastly prefer to work within a framework—then when we gain enough experience, we start to poke holes in the framework. Jokes.)
Make sure everyone in your boat is rowing, not poking holes.
Let’s look at two noteworthy examples.
Be LEGO, not Kodak
We more or less know the story of Kodak: the erstwhile household name for photography spent most of the Twenty-tens trying to manoeuvre its way out of bankruptcy.
The company behind “Kokak moments” (preserve your family’s cherished memories!) built the first digital camera in 1975, then failed to hop on the boat they built.
From its founding in 1932, it made it all the way to 1998 without ever posting a loss. But by 2003, it was a “burning platform,” said then-CEO Jorgen Vig Knudstorp. “We’re running out of cash,” he told colleagues, “and likely won’t survive.”
In the previous few years, LEGO had opened theme parks and stores, built video games, published books and started clothing lines—and lost a lot of money. So much that in 2004, Morgan Stanley pitched to sell the business.
To turn things around, LEGO appointed a new CEO, Jorgen Vig Knudstorp—the first from outside the family business.
Vig Knudstorp knew he had to downsize, but he also set some simple goals:
- Make its customers (retailers) profitable
- Understand its own self-identity—what’s LEGO uniquely about?)(Answer, after a lot of research: LEGO is endlessly creative yet extremely logical)
These goals became principles—discipline—that guided one of the most successful turnarounds of the century.
(So successful that some say LEGO Batman isn’t just the best Batman movie, but the best DC comic movie of all time. We won’t wade into that debate.)
Bring justice to the galaxy
By 2015, LEGO had overtaken Ferrari as the world’s most powerful brand.
Everything is awesome when you know what you’re doing
The power of rules (or “discipline equals freedom”)
Wait: isn’t innovation about thinking outside the box?
Yes, but: constraints actually spur and guide innovation.
Senior Lecturer and McKinsey alumnus Donald Sull says that simple rules add just enough structure to help organisations “avoid the stifling bureaucracy of too many rules and the chaos of none at all.”
“Instead of trying to think outside the wrong box, he writes in “The simple rules of disciplined innovation”, “use simple rules to draw the right box and innovate within it.”
Sull gives the example of Zumba, the global fitness brand where you dance to great music and burn calories without even realising it.
Fun fact: Zumba is a happy accident
Like LEGO’s Vig Knudstorp, Zumba’s founders rely on two rules to help them filter all the great ideas that land on their desks:
- Any product or service must help its instructors to attract clients and keep them engaged.
- It also must deliver FEJ – or “freeing, electrifying, joy.” (This differentiates Zumba from the “no pain, no gain” ethos of many fitness brands.)
Because Zumba’s success depends on its instructors’ passion and the differentiation of its offering, these rules encapsulate its strategy and provide a framework to discuss and identify what’s worth pursuing.
It’s also worth noting that these rules are simple enough to follow and specific enough to be useful.
When rules are too general (“be flexible! creative! innovate!”), they’re little more than aspirational statements, which aren’t useful to guide an organisation’s activities – so they get ignored.
Back to organisational change
You might be wondering why we’re exploring this. We’re a change management shop, after all.
We exist to help our clients execute big changes really well. And we know that many Transformation Leads, C-leaders and other executives struggle with this: we’re trying to innovate, to do things differently and better – but our people just seem to be busier, without any measurable gain.
Question: are people working on the right things? Do you know what the right things are?
A framework, or some simple rules—discipline to guide the selection of initiatives—could be what’s missing.
Client success story
We worked with an energy company that was recovering from a failed ERP implementation. (Here’s some quick reading for the ERP-uninitiated.)
We helped the client to implement rigour around things that can get overlooked in major projects: leadership accountability for results.
Instead of it being the job of the project team to get results, leaders were accountable for achieving adoption in their areas. (The project team still carried a lot of responsibility, but accountability for results sat with the leaders.)
Because it was reflected in leaders’ KPIs, leaders made it happen. And at the end of the engagement, the CEO said it was the most successful implementation he’d ever been a part of.
A simple rule—you’re accountable for making this successful—reinforced with KPIs, achieved great results.
Discipline doesn’t, of course, guarantee success. Nothing can. Trying new things and changing behaviour inevitably involves experimentation, delays and some failure.
But discipline boosts efficiency and increases the odds that your efforts will produce the intended results.
Too many rules constrain us, but too little creates chaos and is just as bad.
There’s a mountain of organisational change both planned and happening, and it’s going to take an enormous amount of energy from you and your employees to get it right.
Implement some simple rules to make sure you’re focusing on the right things, so you can give those initiatives the energy they need to achieve the results you require.
Over to you! What discipline underpins your investments?