The world of work is filled with the idea of how we'll hire 'smart creatives', that failing fast is a critical component of every business out there, and that willingness to speak up and be highly collaborative is good for the company. We should flatten our hierarchies and let the data drive the story of our work. The challenge is that this is the sunshine being sold to us — that the innovative mindset is a panacea that will solve your company's woes, and that if somehow this change in culture could be absorbed, the rest of your company's problems would solve themselves. In my own life I hear this: digital disruption is the new key to building your innovative company. We are overwhelmed with marketing material from the big five showing how to unlock your innovative company and the best way to change the culture.
For every wonderful, positive, and exciting aspect of innovation there is also a treacherous and difficult path to help take you to that new horizon. People think of these innovative practices as fun and engaging — but then why are they so difficult to implement?
Fail Fast
Let's take as an example the now popular idea of failing fast. This is an older concept now, championed by successful startups and well documented in several books (I list some good ones at the end of the article). Tolerance for failure is important, and allowing skilled people to fail is a hallmark of a great enterprise. This must be measured by something that is not as obvious: a culture of competence. In order to hold people accountable for their success we must ensure the right people can be held accountable for their failures. In order to fail effectively you must have extraordinarily competent people who can work together. The reason for this is the distinct difference between useful failing (learning, and then acting on what was learned) and useless failing (failing due to poor thinking, lack of transparency, or bad management).
Standards of competence are rare in businesses, and groups that perform well are roughly treated the same way as groups that perform poorly. An example of this in most enterprises is the still-traditional 'bell curve' of performance review metrics used to drive incentives yearly. In order to meet this curve, managers are given the ability to rate their employees; those managers rate their managers; and each group rates a given subset until the top is reached. As the normal distribution is forced even on the lowest levels (within a team), that means the highest-performing individuals within a team are rewarded well while more average-performing people within that team are given less. Thus the goal would be to be the best person within a given team, instead of building the best team (where some superstars will now be considered average). Within such a construct it is very difficult, if not impossible, to build an organization that rewards competent groups instead of rewarding individuals who exceed the abilities of their peers. This makes it very difficult to embrace useful failure — because it is too difficult to build highly competent teams, and it is even more difficult to understand clearly who has failed in a useful way and who has failed due to simple incompetence.
Collaboration and Safety
We all love the freedom to speak our truth, and to speak truth to power. Many of us though cringe at the idea of having someone speak truth to one of our ideas, or to have our power overturned by someone who works for us. It is easy to say that you want to hear the truth, but it is a wholly other topic when someone who works for you demonstrates why what you want to do is a terrible idea and why you should not do it. Most of us have a difficult time being that candid or accepting such candid feedback. We want to be nice instead, and to rule by committee. Perhaps if we all agree it's not such a bad idea — and if you become the 'negative voice' you have a bad reputation or are considered a blocker. This unhealthy organizational truth is a common one, and being honest is difficult.
It is also difficult to accept that people will frequently be debating your point of view or challenging what you say, even in a respectful manner. Can you still be innovative and raise your voice when you know you will be challenged, and when sometimes your 'great idea' will in fact turn out to be stupid? This is the big problem with nice, timid organizations used to committee. Deference is paid to team players who do not raise their voice, and consensus is used. In this organization the safety and honesty required for innovation is impossible to cultivate.
The next theme that affects this collaboration mindset is individual accountability. Yes, we work together, but in the end someone is accountable for the decisions — and that person has the final say. In tech companies that is often the person closest to the products, but different companies need different structures. If the individual accountable, though, is not allowed to make decisions (see the consensus-driven enterprise above), then accountability becomes nothing more than the position of a fall guy who will hope things turn out well, but ultimately cannot drive the strategy. The committee should review the work and make suggestions, but in the end if a person is accountable (and thus empowered), they own their decisions for better or worse. Not everyone will feel comfortable in this role; good — not everyone should be in it.
Discipline and Experimentation
Willingness to experiment is often confused with a half-hazard attempt to embrace the latest buzzwords. We're experimenting because we're using blockchain internally, we are building chatbots, and we are embracing artificial intelligence. The desire to experiment makes it difficult to ensure those efforts are credible, the results are meaningful, and the people leading the charge are the correct people. This is the part where discipline comes in. Are our experiments thought out and well executed? Are we learning from our experiments in a meaningful way? What are we testing, exactly?
Before building a half-million-dollar chatbot for your new product line, it may be wise to experiment with the idea of whether your target audience will even interact with a chatbot. Measuring success appropriately means knowing that your ideas may be wrong, that the technology you embrace may not matter, and that the people you count on have to back up the goals. To make this work you must balance the crazy, innovative ideas with a dose of reality and the assurance that we're going to test the value of the hypothesis.
Most of us have experienced projects in companies that never really 'fail' — they just slowly die as scope changes until the minimal activities they have already performed are deemed a 'success'. This is exactly what kills experimentation, because it harms discipline. In order to take big risks we must be able to measure results and kill work that is failing. This frees people up to do more valuable work and to experiment again. People who are on a failing project know they are failing; it is like being trapped on a sinking ship and wishing someone would just pull the plug. Next time, pull the plug, end the experiment, and hope that you learned something valuable.
It's never too late to stop going the wrong direction.
Cultural Change
Cultural change is a difficult journey. The pitfalls above are just some of the ways an innovative culture can fall over. Beyond the normal actions that leaders take in articulating the company's values, modelling target behaviors, or other normal leadership activities, there are additional efforts that need to take place to model innovative cultures:
- Recognize that freedom comes with tough responsibilities.
- There are no shortcuts. Building separate innovative projects confuses a true cultural change with a reduction of scale.
- Risk tolerance must be balanced with intolerance for incompetence.
- Collaboration must be balanced with accountability.
Striking that difficult balance is the work of a leader who wants to truly build an innovative culture.
Further Reading
- The Lean Startup by Eric Ries — many of the ideas of innovation, testing, and how to test come from Eric Ries's great work.
- Smarter Faster Better by Charles Duhigg — a brilliant description of psychological safety and the importance it plays in high-performing teams.
- Measure What Matters by John Doerr — if you want to be successful at innovation, it is important to get comfortable with measuring the things that matter.
- How Google Works by Eric Schmidt — descriptions of how to attract a certain workforce to drive innovation and how to understand accountability and work.