The Innovation Game

When executives take off their glasses and pinch their eyes shut in that “I’m thoughtful” pose, they’re all picturing themselves in a black turtleneck.

For that brief moment, they’re on stage at the unveiling of their next masterpiece.  They glance backstage and see their approving mothers.  They get an animated thumbs up from the supportive management consultant that did their hair.  If they squint past the spotlights, they can see-- in the back of the stadium, in the nosebleed seats-- every person who ever rejected them, who made them feel alone and lonely, who didn’t recognize them for the star they obviously are.

And just like that-- whoosh-- they open their eyes, and they’re back in their nondescript conference room, listening to some awful presentation about god only knows what.

Innovation as obscenity

Like its more popular cousin “leadership” (quotes intentional), the term innovation is so broadly defined that it has lost all meaning.  Every leader is now an innovator and every new product-- and every new feature of that product-- deserves a ribbon.  Yay!  Ribbons for everyone!

Fun exercise #1: Check out this Google Trends chart comparing the words leadership and innovation.  Spooky how the two rise and fall in lockstep, no?  Compare that to the chart for the terms leader and innovator.  My completely unscientific takeaway is that for every 1000 leaders in the world, there is 1 innovator.  And that’s generous.

Fun exercise #2: Add the term “innovative design” to your news feed.  The PR wire becomes so very entertaining with your first daily sip of hot beverage.  Mornings in my house are now filled with sarcasm, yes, but also-- at least once each day-- with the well deserved start of a slow clap.  “The LG G2 has an innovative rear button design?!?  Bravo LG.  Bravo.”  

Clap.

Here’s the thing about innovation:  I’m not sure any of us need a definition.  We don’t need a journalist to tell us what it is.  Or who really gets it.

Innovation is like obscenity-- we know it when we see it.   It’s hard to miss when paradigms shift.

So no one is fooling anyone with all the press releases and internal memos.  All we’re doing is sending another cool word to the literary junk pile.  The one I regret the most: the cloud.  Poetry lost something the day some marketer stole that word.   

Innovation promotes short term gratification

Given my various roles in the corporate world, I meet with aspiring entrepreneurs pretty regularly.  They all bring something cool to the game— their loaves of sliced bread-- their technology prototypes.  And as they pitch their “greatest thing since” many forget that the sliced loaf itself wasn’t the innovation in that saying; the manufacture of it was. Having the idea of sliced bread isn’t compelling.  Anyone can showcase one sliced loaf.  All they need is a knife.   

To be compelling, an entrepreneur needs to demonstrate scale and stability, adaptability and adopt-ability-- scars that can only come from the long, hard road to commercialization.

And look — it’s more than a little cliche but when I sit with these amazing balls of energy, I can't help but admire their courage and tenacity.  Don’t they have mortgages?  Kids to send to college?  Of course they do. But they’re taking their shot.  Playing the long game… even as they unironically use terms like “fail fast.”

Which inevitably leads me back to thinking about the corporate world’s black turtlenecks and their broken relationship with innovation — an act that ultimately lives at the intersection of empathy and playfulness.  

Why do executives– especially in large companies– struggle with innovation?  The answer– as uncomfortable as it might be– starts with the talent (it always does!) and their incentives (extrinsic and intrinsic). 

In my experience, large companies tend to attract adults— or more accurately, people who aspire to be “the adult in the room.”  Corporate lifers.  Good people… who are motivated differently than your average startup types.

Corporate lifers appreciate structure (the size of their cell), stability (three meals a day), safety (armed guards everywhere) and the occasional office drama (Bob got shanked!).  

They are brilliant risk managers.  And where better to apply world class risk management than at the office… for their careers? 

Plus, they’re short-term realists– who understand the odds of winning the lottery.  Not the kind with rocks.  The other kind.

Don’t get me wrong.  Corporate lifers are smart as hell.  And every one of them has the capacity for empathy and child-like play.  But their big brains also understand their company’s incentive structures— the rules for their career progression. And they know that there’s no real corporate career benefit to innovating.  

Well… there *is* that plaque.  Worth a fortune on eBay.

This is partly why I preach on and on about being a chef, not a waiter.  What I believe the corporate world lacks— and I attribute it to the social dynamics of large orgs filled with lifers— isn’t really chefs.  It lacks what our grandparents called character.  It lacks values… but not the usual corporate pablum like “ownership and accountability.”  It’s the kind of values that only one large company in the world– Amazon– has ever been applauded for: a weird combination of chutzpah and patience.  

Two companies if you add Berkshire Hathaway.

But their stocks are doing terribly!

The rest of the corporate world is not engineered to wait for slow cooked food.  And the creative process takes time.  The path to commercialization takes even longer.  

Corporate timeframes are driven by quarterly reports and analysts expectations, by unreasonably short windows to prove value as a management team and annual bonus cycles.  That skews corporate expectations around innovation.

And that is why the innovation industrial complex produces fast food--  innovation in a can, with loads of salt, sugar and fat.  

They’re all chutzpah, no patience.

Speaking of which,

Innovation supports a questionable industry

I’m looking at you hbr.org!   No one has called you out for a while or if they have, it's been in that syrupy academic tone that first validates your intellect.

I am not impressed.

Your articles are fun to read (no doubt)… and…  if we were being honest, they help cast business-focused social science as the chiropractors of medical research.

Your content is exactly what I want someone smarter than me to tell me (i.e., that innovation is a repeatable discipline)… and… if we were being honest, we should classify this genre of content as business fantasy.

Quick demonstration.  Fun exercise #3-- how to identify substance in business content.   The next time you read something about innovation or leadership-- or whatever the trendy new business term is-- replace each instance of the buzzword with excellence (or “being excellent”).  If you’re Gen-Y, this also works with awesomeness and “being awesome.”   If-- after the switch-- the book still makes sense, burn it.

Some examples. Peter Drucker speaking to today’s youth: “Being awesome is about lifting a person's vision to high sights, the raising of a person's performance to a higher standard, the building of a personality beyond its normal limitations."

Steven Covey: “Managing is doing things right; awesomeness is doing the right thing.”  

My favorites are the ones where you can’t tell if the cult leader is talking about leadership or innovation.  Anthony Robbins-- who I nominate to join the illustrious authors of hbr, in an attempt to send a message to both about their credibility: “Awesomeness is really a daily habit, whereby you constantly reassess what your customers need now, and what they will need in a few years.”

My obsession of late is Karl Ronn’s “Companies that think they have an innovation problem, don’t have an innovation problem.  They have a leadership problem.”   It’s a winning formula. 

Keyword: formula.

Fun exercise #4: Fill in this template with any problem you can imagine: “Companies that think they have a _______ problem, don’t have a ______  problem.  They have a leadership problem.”   It’s almost religious in its truth.  Even self-referential, Inception-inspired versions make sense: “Companies that think they have a leadership problem, don’t have a leadership problem.  They have a leadership problem.”

Clap.

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Look, we all need a path to retirement.  Something that doesn’t involve cat food.  

Selling innovation to senior management is like marketing cigarettes to kids.  

Stop it.

In Conclusion: Innovation Breeds an Unrealistic Fantasy Life

If you haven’t caught on from the section titles, there are too many parallels between innovation and porn for me (or you) to waste any more time on this: both mismanage expectations, breed narcissism, objectify the important half of a partnership, confuse the meaningless with the meaningful.   

And both have the kind of apocryphal allure that inspires addiction.  Hence the legions of executives who pose in front of their mirrors in their black turtlenecks when they get home… late.

I’m convinced that anyone who suggests that innovation can be a repeatable discipline is either selling consulting services or writing a book (so they can sell consulting services).   If you’re one of those folks, don’t worry- your motivational speaking gigs are safe, for the same reason that porn actors are all "stars": there will always be a huge appetite for fantasy.

For the rest of us, let’s recognize that an unhealthy focus on innovation diminishes the value of everyday business activity.  There’s nothing that I could write here that wasn’t better expressed by Thomas Edison: “Opportunity is missed by most people because it is dressed in overalls and looks like work.”

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Afterward: My Thinking a Decade Later

In the years since I first wrote this piece, not much has changed.  Most of the corporate world continues to address their innovation gap through cross-industry hiring– i.e., let’s get someone from Disney(!)… or better yet, Marvel(!!)… because their CFO doesn’t use Excel… they use Excelsior!   

Clap.

Or companies address the gap via corporate Innovation Centers– one very nicely furnished, colorfully-decorated floor with beautiful, glass-encased conference rooms, ping-pong tables, an extremely overworked cappuccino machine and a very lonely 3D printer… in a building where every other floor looks like it’s stuck in the 1970s.  Smart move really… because if you’re going to do a client floor walk, it’s better if they don’t comment on the groovy carpeting.

In those same 10 years, the corporate world still hasn’t figured out how to follow Bezos and Buffett as they play the long game.  So the real paradigm-shifting, market-creating innovations have come from smaller firms.

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I obviously don’t want this piece to be just me predicting more rain.  So let’s talk ark.

The harder part of the answer is to fix the structural problems.  Hiring a charismatic, energetic, creative executive isn’t the answer.  Asking them to magic up innovation without fundamental changes to a company’s operating model– how finance runs, how HR runs, how the Board guides the C-suite– and without wholesale, fundamental changes to how public markets operate– shareholder expectations, analyst pressures, how regulators operate… is… well… not the best use of capital… or the best use of divergent thinkers.

The easier part of the answer is cultural… which is saying a lot because culture is incredibly hard.  And this one’s tricky because– as I’ve written previously– culture isn’t about comms and value statements.  It’s what we do every day.  

In fact, the only place that should have posters that ask everyone to think outside the box is Taco Bell HQ in mystical Irvine California… which for followers of my religion is *the* site for holy pilgrimage.

The answer for the rest of you heathen is to make a different class of work-based demands of your employees: the kind that will bring about habit-changing daily behavior.  The kind of change and work that requires Edison’s overalls.

I don’t want to keep falling back on my dear friend Jeff but a good example of this is his 2002 API mandate note to all developers at Amazon.  I’ll shorten it but it was basically “All teams will henceforth expose their data and functionality through APIs. Anyone who doesn’t do this will be fired. Thank you and have a nice day!”

That changes what the org does every day, every hour.  That’s culture.

Interested in infusing data science or AI into your company’s DNA?  Don’t create a “center of excellence.”   That’s exactly like what that one really innovative floor does when they’re waiting for their cappuccinos… while all the other floors fulfill their disco dreams. 

Start with “All teams will henceforth demonstrate how their applications plan to use machine learning before one additional line of application code is written.  Anyone who doesn’t do this will be fired. Thank you and have a nice day!”

That changes what the org does every day, every hour.  That’s culture.

And it doesn’t have to be about tech.  

Interested in creating efficiencies that result in lower operating costs?   Don’t create a category of programs in your annual budget planning that catalyze efficiencies.  Ask *every* program how they plan to create efficiencies.  

If they don’t have a plan, no funding… you’re fired. Thank you and have a nice day! 

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The only problem left to solve after that: how to stop threatening people with getting fired daily.  

Twice or three times a week is fine.  But daily… that’s a leadership problem. 

LinkedIn Tease:

This is one of my two favorite pieces of writing… the other being my 28 part fan fiction series Warren Buffett: Vampire Hunter. 

I published this anonymously 10 years ago in Information Week under the very click-baity title “Innovation is executive porn.”  Don’t blame my editor at the time– @RobPreston… now at Oracle.  He tried to warn me about not giving internet anonymity a bad name.

Yep.  I’m the reason all discourse on the interweb went to pot.  

Anyhoo… like with all my writing back then, this piece was more complainy than solutiony… two words that only sophisticated writers use… so I spruced this new version up and added an afterward that…if we’re being honest… demonstrates that I grow dumber with age.  

You’re welcome.