- Posted by Cris Beswick
- On 21/04/2020
“Creativity without measurement is akin to chaos” 
Please don’t take our word for it; this is a time when statistics can reveal far more than we perhaps want to admit. So let’s open by examining a few key facts, starting with a look at how innovation creativity, or the lack of it, impacts organisations and the blunt statistic that at the current churn rate half of the existing S&P 500 companies will be replaced in the next ten years. 
What does that one statistic say to you? What it means to us is that we haven’t learnt the lessons brought to us by the disappearance of once household names such as Comet, Blockbuster and Woolworths. The number one lesson that businesses that fail to innovate will fall prey to disruptors and changing market conditions may have impacted at some level, but it hasn’t gone deep enough to force change. As a result, we have a disconnect in which nearly 85% of executives say innovation is critical  but just 31% of executives strongly agree that their company recognises the need to transform. 
Is this a case of heads in the sand, or is something deeper going on? Well, from our work with organisations across the globe, we recognise the importance which leaders and executives place on innovation. But we also understand that because innovation transformation isn’t a click of your fingers and it’s a done thing, there can be a gulf between knowing what you need and understanding how to go about it.
Another dive into the statistics perfectly illustrates this revealing that 65% of companies investing 15%+ of revenue in innovation say their top strategic challenge is aligning business strategy with innovation vision and that overall, 54% of executives struggle to align innovation strategy with business strategy.  And if that initial understanding and alignment aren’t there, then to use a sports analogy, you’re heading for the relegation zone.
Why? Well going back to our initial quote, chaos theory says that a minor difference at the start of a process can make a significant change in it as time progresses. Yes, it’s great to be able to stand up and announce that; “from now on we’re going to be innovative, we’re going to do stuff, lots of stuff, and we’re going to disrupt the market.” But if you have no understanding of your current level of innovation maturity, it’s difficult to be sure of where your barriers are. And if you don’t know your starting point, what chance do you have of creating a strategy that will deliver anticipated results, let alone measure progress along the way?
“In order to survive and thrive, however, established companies have to become clear-eyed about the challenges they are facing.” 
In other words, you may have a vision of an innovation-led future, but you’re not going to get there unless you take the blinkers off and see what’s around you. So before you leap into the unknown with a grand plan which sets out how you are going to improve your company’s innovation ecosystem and culture, you first need to understand the current position. That starts with an in-depth audit of your current level of innovation maturity to highlight required changes across your internal and external ecosystem. Remember, not all innovation vehicles are equal in terms of impact and the actual outcome, so the audit is essential to deliver an outcome-driven innovation framework which is right for your organisation.
However, you can’t ‘pick and mix’. When you try to build an understanding of your business ecosystem, you have to take every factor into account; taking the time to understand your organisation at a granular level to deliver a holistic solution. This granular approach means looking at your company’s portfolio, your human resources and organisational capabilities alongside the skills and attributes of your people. It means taking a fresh look at business culture, leadership, and the way people are inspired, empowered and rewarded. Only then can you not only understand your initial level of innovation maturity but also be able to deliver a robust gap analysis enabling the development of a clear action plan.
Want to learn more about our pioneering innovation maturity assessment ‘AIM” and how we help leaders make data-driven decisions on how to build a culture of innovation?
Assessing in this way can seem overwhelming, so, our top tip here is to segregate the organisational ecosystem into discrete measurement areas. This aids understanding of the challenges faced in each area as well as enhancing the chances of developing a robust gap analysis. To this end, based on our advisory work on innovation with organisations across the globe, we have developed an ‘Assessment for Innovation Maturity’ or AIM for short. Running AIM enables organisations to look at five specific areas: Strategy, Leadership, Management, Culture, and Processes. In turn, it provides a view of an organisation’s innovation maturity level in terms of innovation strategy & leadership maturity, innovation management maturity, innovation practice & tools maturity and innovation culture and HR capability maturity.
Let’s insert a note of caution here. When undertaking any in-depth analysis, it can be all too tempting to fixate on a single area. It’s easy to see how. After all, understanding where an organisation is ‘suffering’ will dictate subsequent actions, and if one area stands out, then the temptation is to focus on fixing that before moving onwards. And you can indeed attain a higher plane of performance and outcome just by changing one thing. But unless you have first looked separately at all of the elements forming your company’s innovation capability, culture and ecosystem and in the process identified the interconnectedness of the discrete aspects, the thing you change may not be the root cause of your problems.
Whatever assessment methodology you use you’ll find that while initial results can paint a clear picture of the past and present situation within a company’s innovation ecosystem, they won’t necessarily explain what caused the situation to occur (the ‘why’). And if you don’t know why then all the follow on work will be a guessing game mired in a rehash of past’ best practices’. As Einstein said, “Insanity is doing the same thing over and over again and expecting different results.” So while the temptation is to move swiftly into innovation transformation mode, the wise course is first to undertake follow-up work to deliver certainty.
One note of caution here; it’s just as dangerous to overmeasure as it is to under measure. Or to put it another way, organisations drawing in data for data’s sake are as dead as organisations with no data. Just as every business will have a different level of innovation maturity, so too should leaders ensure that once the initial audit is complete, any follow-up work aims towards delivering a defined innovation strategy.
Having lots of information can be compelling but when you are in pursuit of an innovation ecosystem which values intelligence, getting behind the data is a crucial indicator of success. Which equally applies to measurements undertaken once you are on your innovation journey. What is appropriate for your organisation will depend on several factors including the nature of your business, its marketplace, its current level of innovation maturity and its innovation ambitions, i.e. what are the required ‘outcomes’ of building innovation capability and culture (Maturity). So while some may choose to measure in terms of patents or sales, others may look more towards areas such as customer excellence or collaboration. Equally, as organisations move along their innovation roadmap, they should be prepared to drop some measurements in favour of others which better reflect the next stage of their journey.
We all love a challenge, mainly when the outcome positively influences because of properly developed skills, intelligence and future-shaping capability. We’d argue an innovation audit which enables businesses to understand their organisational and people capabilities is an essential first step to improving the ecosystem and culture on the way to organisational transformation.
Of course, to get the ball rolling in the right direction with new products, services, experiences and business models, you also need to understand your company’s portfolio. But that’s a story for another time. In the first instance, our challenge to you is quite simple; stop guessing and undertake an innovation maturity assessment. Only then will you identify the right start-point to enable you to build your innovation-focused future.
- Building a Culture of Innovation https://crisbeswick.com/building-a-culture-of-innovation/
- Innosight: 2018 Corporate Longevity Forecast https://www.innosight.com/insight/creative-destruction/
- CB Insights State of innovation 2018 https://www.cbinsights.com/research-state-of-innovation-report
- PwC 2017 Innovation Benchmark https://www.pwc.com/us/en/advisory-services/innovation-benchmark-findings.html
- The Corporate Startup http://thecorporatestartupbook.com/