In their new book, The Innovator’s Guide to Growth, authors Scott Anthony, Mark Johnson, Joseph Sinfield and Elizabeth Altman explain how many companies believe the way to unleash innovation is to let chaos reign. According to this theory, managers need to be encouraged to “think outside the box” – and therefore, innovation should not be constrained, so they can dream up the best possible new ideas (sound familiar?). But the lack of boundaries for innovation can be a problem for several reasons:
First, managers can spend a significant amount of time pursuing fruitless paths. Precious time and resources get wasted in all sorts of ill-considered pursuits.
Secondly, without a clear direction and goals for innovation, managers may be screening and filtering ideas based on their own assumptions about what is a good fit for their company. “When senior management asks, ‘Why do we never see any good ideas?’ a likely answer is that middle managers are screening out or discarding ideas that they think are out of bounds. The natural inclination of these middle managers is to reject something that doesn’t fit what the company does today. In other words, line managers may impost sharply stricter mental constraints than what senior management intends.”
Third, without a clear set of innovation objectives, the authors point out that companies tend to “bet the farm” on any idea that seems to deviate from the core business. “They then layer risk after risk on an idea until it has little chance of being successful. While companies should avoid being constrained by their current definition of the core business, deviating too far from (it) can be dangerous, too.”
To avoid these problems, the authors recommend that companies should clearly define what’s on and off the table along key dimensions of their business, in areas such as target customer groups, acceptable distribution models, revenue and margin targets, geographic areas and marketing tactics.
So how focused is your company’s innovation strategy?