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If you look at the effectiveness of the R&D dollars spent of many companies in industries especially Pharmaceutical and Automotive, you might find ample reasons to empathise with those analysts. At the same time, these analysts and observers, with their short time horizons catapult innovation myopia in the same organisations. R&D projects in these industries (a) sometimes need 5-8 years to show results – apparently too long for the sell or buy calls and (b) sometimes too complex to be comprehended by analysts. This means long term innovation programs usually don’t make sense for the analysts and eventually for the stock prices. Research confirms this. This however does not excuse these bigger corporations, whether they use the ‘ivory-tower’ method or are collaborative but in a ‘we call it collaborative but we twist arms’ kind of approach.
However, many companies genuinely try to design innovation programs that eventually – like many other programs – fail. My experience shows that one of the biggest reasons for this is that these companies fail to create the right ‘mental models’ in the minds of their employees. Research in the construal level theory by Lieberman and Trope proposes that temporal distance (perceived proximity of an event in time) changes peoples’ responses by altering mental models of the same towards future events. Not only temporal distance but also spatial, social and probabilistic distances can alter responses of individuals. Larger distances – or higher level of construals – create a higher level of abstraction and decontexualised features that convey perceived importance of events. We need to construe concrete mental models around innovation programs that employees can relate to and pull through the organisational inertia by bringing these programs ‘nearer’ to them in all construal dimensions.
Take an example of a big pharmaceutical company that tried to create a well popularised collaborative innovation platform to drive innovation. They benchmarked all such platforms available in the market and devised their own blue print for the same. Idea was to make employees use this new platform to collaborate. This program was a flop before it even started. Employees used a multitude of different ‘systems’ earlier and were asked again to use another one. A better approach would have been to rather map the collaborative networks existing inside the organisation and create from there a mental model of collaboration, building the system bottom-up rather than top-down. Instead of pushing a system to employees, a system that was pulled through the organisation by 4-5 hidden collaborative networks should have been derived.
I would list three elements that should be taken care of while devising innovation programs to ensure their effectiveness.
Organizations often fail to recognize that they have an entire system that is interacting to produce the current results. That system is defined by how the work is organized among the people – a human system. An approach that comes in the form of tools and initiatives outside the context of this human system is bound to be short-lived. If the changes are not clearly understood by all involved and integrated into the dynamics of the system, impact will most likely be less than hoped for. Especially in these times of uncertainty, when employees or unions are already in constant fear of layoffs; not having their buy-in, a program that is thrown on their heads is surely going to doom and in fact increase organisational troubles.
Many a times, I hear CEOs talking about ‘white spaces’ between business units, collaboration between drug safety groups, development teams, geographies and many other organisational entities but never about the mental models involved. Do we really target every program to change mental models at work positively? Do we design incentives, structure the program in a way that redesigns thought process or behaviour fundamentally?
Innovation is not a game of home runs; it is a game of singles and doubles.
Each increment in organisational ethos can be substantial. Leverage lies in the success of many and frequent small transformations and not in trying to reach a particularly ambitious change in one go! Results can come quickly, but it takes time, typically 3-5 years, for the organization-wide, cultural shifts to be evident.
If you make 250 steps a year with the employees, some steps will be big. In big bang approaches, you may take 2-3 a year and probability is high that all will fail. You cannot achieve miracles in a quarter or couple of quarters – yet many CEOs wish they could. Cultures need time to change, and if you truly want to be innovative you have to hit right at the core of it: at the culture. Window dressing through buying expensive or flashy systems, useless idea competitions or even putting your problems at collaborative innovation portals won’t help.
A large organisation in the FMCG sector that doesn’t have an innovative and open culture tried repeatedly to get ideas from outside – obviously without success. At the same time it’s American counterpart was seen reportedly creating history with outside-in! Organisation lacked what researchers would say ‘absorptive capabilities’. Where do these capabilities come from? If you are wary of others, not open and if that behaviour or mental model of working is encouraged throughout the firm – how would you be genuinely open to outside ideas? This culture can be opened in small steps, in a structured program to affect the mental models at work positively.
The way your work is organized and incentives designed drives your culture. Often firms wonder how some employees and members of front line management are better in running a plant or bringing out innovative ideas than others. Seldom do these firms try to identify the reasons or the mental models driving these innovation agents. They would rather look for supposedly really super people on the outside and bring them in. Within 6 months these outside ones work or think in the same ways as the top management or the majority of current employees.
Sometimes there are political reasons for their adaptation and sometimes the long-established mentality and workflows of the organisation are a more powerful force than their own intentions. This is why innovation programs that are executed by any innovation department and that operate on the margin have a hard time changing organizations in fundamental, substantial ways. You have to get to the way the core work is organized and incentives are designed – and look at the root of mental models at work.
A huge part involves engaging the employees; they know the work and they know the problems. Of course, there is ‘disattentional blindness’ as Chris Chabris and Dan Simon would call it, pervasive in organisations. Employees and management become so myopic as they focus on day to day operations that they sometimes loose sight of the innovative gorilla ideas that take a moon-walking stroll on their strategic and operational landscape. It makes sense to bring in outside ideas – but they have to be rebuilt bottom up. Only thus can they win and create mental models of innovation at the level of employees.
Communication has to indeed play a crucial role but it can only be effective if the mental models have been first mapped out. Else it is again yet another formal string of a project that has been taken up in the name of some abstract strategy only understood by the top management; an addition to mails that people never read and ‘idea boxes’ they never look at.
Innovation in the end is innovating the mental models – getting back to the building blocks of organisations and unleashing the creative force from within!