Do companies need less innovation?

This is a guest post by Ralph Ohr in response to an article posted on Business Week titled: Why Companies Need Less Innovation.

Thanks for this valuable post.

Although, I just partly agree with the author, the post has greatly initiated an important discussion. The definition of what innovation means in a certain context as well as the resulting question who is responsible to drive the defined scope, turn out to be crucial for innovation success.

As already indicated in former comments, the author tends in his understanding of innovation to focus on the more radical part of the continuum. This part is primarily driven top-down, requires dedicated processes in place and depends on the allocation of selected resources. Leadership needs to assure these pre-conditions, together with a proper link between company’s strategy and innovation. Otherwise, aligned activities and targeted resource management is likely to fail. Arie Goldshlager has well pointed out that an innovation chain is likely to be just as strong as its weakest link.

But there is also innovation at the opposite part of the continuum. I would like to refer to a great post by James Todhunter (@jamestodhunter): In defense of improvement

He pinpoints the importance of improvements for incremental innovation. Improvements typically emerge from daily business and are driven bottom-up by employees in their respective field besides doing their day-to-day job. This is particularly important as incremental innovation usually accounts for the majority of activities to the overall innovation portfolio.

In this sense, everybody in a company is basically in charge to contribute to the development of the company in order to stay competitive – closeness to daily business and time horizon might be different. If we consider innovation to cover a continuum, ranging from incremental to radical purpose, it’s essential that leaders understand that both end of this continuum require different approaches, incl. objectives, mindset, resources and processes.

I don’t think companies need less innovation – I rather think, companies should focus on contributing to innovation at the right point of the continuum.

Feel free to share your thoughts.

Regards, Ralph-Christian Ohr

  • Hello Ralph,

    I completely agree with you context is key and I’ll add to your response.

    Do we want people daydreaming all day? No. Do we want people who come to work caring about the work they do? Yes. Saying that we only need certain people to be involved in activities that lead to innovation is accepting that some people only go to work to collect paychecks and fill work requirements.

    When we know that ideas can come from anywhere, why not invite everyone to join the party?

    It’s not that hard to understand why we decide to outsource innovation activities to only a special few while others do the day to day, just look at other human endeavors such as public security and how the FBI and CIA came about.

    Let’s fast forward 10 years from now and imagine that every company has an innovation capability driven by only a special few, this is now a dogma. It appears in every single book you can imagine, b schools worship the creation of an ‘Innovation Champions’ team within an organization that’s sole purpose is to be ‘the innovator’ while everyone else comes in to do the grunt work and collect paychecks. Whirlpool and P&G are no longer in the conversation because their innovation management model has been adopted by everyone else.

    Do we actually believe nobody is going to question this dogma and find a way to make it so everyone is accounted to be an innovator and therefore create a new way to play the game?

    We already see glimpses of this so it might happen faster than we think. There are phenomenons such as W.L Gore which lists ‘innovation’ as a job requirement, and as long as these exist I see no reason why other organizations can’t strive to do the same.

    What these phenomenons understand is that people are driven to contribute to a higher purpose and if that need is met, grunt work takes on a whole other meaning.

    I think this is the challenge that lies ahead of us.

    • Ralph Ohr

      Thanks for your valuable comment, Jorge. I like your conclusion that people are driven to a higher purpose. Indeed, I think people are motivated by understanding how their work contributes to a higher objective (e.g. making the company successful in the future). This helps making a good day-to-day job and thinking beyond how to improve it.

  • Jacktaggerty

    Hi Ralph,
    I have worked in an organization that came close to failure because they did not understand that an organization’s culture can negate any attempts to change products, policies and procedures even though it may have a formal Innovation Program introduced by the Managing Director. This can also pervade an industry. Innovation requires the commitment not only of the Board or Directors but senior management.

    I have heard the argument that if you have a problem analysis, situation analysis and decision analysis process (as in Kepner Tregoe) that innovation will result as a by product. However, there is a classic case of this at the moment with the Global Financial Crisis and the account based pension schemes whose longevity of funds for the owners is in question, but the industry has not made available Lifestyle Planning Software on websites where the public can complete a sensitivity analysis of what would happen if they worked part time. The innovation need is there, but the process is blocked by not having an imbedded Innovation Program to facilitate change.

    Innovation and change management are serious matters where shortcomings can have serious consequences that defy belief.

    Jack Taggerty

    • Ralph Ohr

      Thanks for your comment, Jack. I fully support your final conclusion.

  • Ned Kumar

    Hi Ralph,
    Great perspectives. I had shared my thoughts on Pat’s article before and wanted to throw out some thoughts here too.

    As crazy as it migth seem :-), I agree with Pat Lencioni’s message though not with all his reasons. As I had mentioned in one of tweets, encouraging your employees to be innovative is a different ballgame than creating an innovative organization.

    I have seen multitude of cases where management goad and push their employees to be innovative but when new ideas are put forward, they are put down because of various constraints. So before a firm decides to be “innovative”, they have to ensure that they are equipped with the right culture, infrastructure, leadership, processes etc.

    Now with the fundamentals in place, I do believe that innovation need not be a top-down prerogative limited to senior leadership (and this is where I digress from Pat’s article). I do believe that innovation can come in many forms and that anyone in the company can contribute towards it – either in a radical way or in incremental changes. I would also contend the fact that being innovative restricts one to be any less passionate about their work or perform their duties dligently. Dishwashing might be portrayed by some as grunt work, but personally I don’t see why a dishwasher cannot come up with innovative ideas useful to the organization.

    In closing, I also think a large part of these kind of discussions is also semantic. To me it is less critical whether you use the term innovation, creaatomy, design thinking or something else – what matters is the concept behind those thoughts and how it will affect the sustainabiliy, customer value creation, experience and the bottom line.

    Enjoyed the read.


  • Innovation does need to be focused. It needs to be focused on “in-offer” elements. If we innovate all over our enterprise, we are merely increasing our cost of business. It might make the employees happy, but it will do nothing for the company, the customers, or the macroeconomic situation.

    • Ralph Ohr

      Thanks for commenting, David. In my opinion, continuous / incremental and discosntinuous / radical innovation build a complemantary system. Incremental steps are required to utilize and secure radical innovations. The challenge for every company is how to position along the continuum.

  • Continuous/incremental innovation will get you a short-term premium. It won’t last long. It does little to contribute to an economic recovery. It doesn’t create a new value chain. It doesn’t create wealth. It will let you capture some cash. It will let you milk your cow a bit longer. It won’t get people back to work. You can send it to China even before it goes to market. So it is not the answer.

    Only discontinuous innovation creates new value chain and the wealth implied by that. Only discontinuous innovation is going to create new jobs.

    We can think that all we have to do is worker harder, smarter, or happier to overcome the failures of Globalism, but it won’t be a theory that fails us. It will be management that fails us by its failure to reinvest the savings that globalism delivers in the new value chains, new wealth, and new world that is before us. Without discontinuous innovation the road ahead leads down further into decline. This is the zero-sum outcomes of globalism that economists warn us about.

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  • Ralph Ohr

    Appreciate your comment, Ned. I agree with you that it doesn’t make sense to push emploees to be innovative if the organizational requirements aren’t met. On the other hand, this situation does not legitimate to exclude people from contribution to innovation activities. You’re right in saying that all employees can contribute with the right org and culture in place – that’s first leader’s task.