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#InsightsIn5: The Problem with Innovation is RISK!

It might seem like an obvious statement, but what are the obstacles in the way for corporations to successfully innovate?

Meaningful innovation is an essential element to long term and sustainable business success. As your competition develops and evolves, companies need to make sure that they keep up. Some choose to follow the trend, some choose to lead the way, and those who do neither will eventually wither.

Fail fast, the mantra of Silicon Valley is the dichotomy of the culture that can often exist in corporations, the fear of failure.

Innovation for Innovation Sake

First, I want to test the principle of meaningful innovation, what does that mean? How do you get the balance right between challenging the status quo, disruption, and avoid innovation for innovation's sake?

This is an equation between what consumers think they want, what innovators think they need, and somewhere in between an educational evolution that drives adoption and ultimately a sink or swim for the product, service, or technology.

"If I had asked people what they wanted, they would have said faster horses." - Henry Ford.

As an old mentor of mine once said, “don’t go suggesting selling sandwiches on the space shuttle.” And, there have been many inventions that just do not get past GO because they are too highly technical, too gimmicky, impractical, or beyond the realms of the consumer's imagination. The balance equation has been missed.

Funky, futuristic workstations, a Nose Stylus for multi-tasking. The Fliz that overcomes the need for bicycle saddle, the iPhone Fan. Or what about a paper shredder for your hamster's cage, a baby mop so infants can clean the floor, or what about even vibrating jeans?

Beauty is in the eye of the beholder, and at some point, innovators believed that all these ideas were good, had value and that consumers would adopt to make them, The Next Big Thing.

The flying car, in some shape or form, may well yet make an appearance in the mainstream. In Los Angeles, there is much hype about the prospect as they think about the infrastructure of sky-ports, landing pads, and even self-flying autonomous vehicles in the air space above. It was not that long ago that this was just considered a fantasy, a dream, a storyline in The Jetsons.

Back down on terra firma, think about the plight of the electric car, and how after decades of that prospect, TESLA has turned it into reality. TESLA is leading the charge. In just seventeen years they have reached a market capitalization of nearly 7X that of Ford who has been around since the beginning of automotive, over a century earlier!

There are many examples of companies who failed as a result of their inability, for whatever reason, to innovate. The famous Kodak story who invented the digital camera but decided that traditional film was the future. BlockBuster having the opportunity to buy Netflix but turned it down. Nokia, Compaq, ToysRUs, there are many examples of why having a healthy regard for innovation probably makes good business sense.

So, if the premise of the need for innovation is accepted as being important, then what are the challenges and blockages in the way.

Entrepreneurial Spirit

For many of us, the notion of the entrepreneurial spirit might be likened to the stuff of pioneers, climbing the highest mountains, exploring the deepest oceans, maybe polar explorers, space explorers.

We tend to look up to these few. We admire them, we are in awe of their trials, tribulations, and successes, often as our heroes.

Thing is that these pursuits are often dangerous, and many times these pioneers are putting their lives at risk.

That is the same in corporations.

Those individuals that take the most risks may well be more likely to succeed but they are also more likely to fail too.

The Corporate Herd

Corporate compensation systems rarely reward risk, and never reward or recognize failure which is, and should be so closely linked to innovation.

When Thomas Edison was asked the question, "How did it feel to fail a thousand times?" his response was:

"I didn't fail a thousand times. The light bulb was an invention with a thousand steps." - Thomas Edison.

Compensation programs mostly reward the success and the safety of the herd and not the entrepreneurial innovator. In fact, if the innovator is perceived as putting the herd at risk then a group resistance may dilute the innovation itself, or worse, halt it completely.

Disruption Indigestion

The whole notion of disruption flies in the face of everything we have ever learned from childhood, from our parents, throughout our school years, and into the workplace. Disruption often gives many workgroups and individuals indigestion, and in many cases, corporations too.


Innovation doesn't just need a good idea, the resources and wherewithal to turn the dream into reality, or, the consumers' appetite for ultimate adoption, it also requires its fair share of courage too.

"One does not discover new lands without consenting to lose sight of the shore for a very long time." - Andre Gide.

A challenge from a C-Suite Executive asked my group,

"How do we really disrupt our marketplace?"

As the room fell deathly silent, I suggested lifting the lid on the industry's dark and secret practice and the retention of hidden purchasing rebates as a sure way to really challenge the status quo. From the reaction, I understood there and then that the challenge was aesthetic and not a fundamental desire.

There was no real appetite to truly disrupt. The fear of disruption was not just the internal fear of failure but also the fear of disrupting an entire industry and a lifetime of industry relationships. In other words, whether the idea was right or wrong, there was an element of personal risk that got in the way.

The Sterling Method

Bob Christopher, Senior Director for Innovation at Diamond Edge Ventures, a division of Mitsubishi, and career innovation leader shared with us his thoughts on innovation in corporations and introduces the Sterling Method.

Innovation requires creativity, inspiration, and insights. Yet many companies bury innovation by penalizing risk, i.e. failure. Instead, they promote compliance with the corporate culture and company objectives. Of course, many companies think they are innovative and they promote themselves in this way.

"So, how do you know if your company is truly innovative or just talking innovation (not walking it)?"

Well, there is a formula for measuring innovation within a company, it’s called The Sterling Method. The formula focuses on the variables that support or penalize risk. These variables are:

  1. Employee compensation models

  2. Access to corporate resources

  3. Internal communication flow

  4. Physical and virtual work environments

  5. Mentorship or advisory support, and

  6. C-level alignment.

By addressing each of these six, then organizations can create an environment where innovation may not only survive but thrive.

De-Risking Innovation

Opportunities exist to remove some of these risks and obstacles from the process of innovation.

There are many examples of enterprises accommodating or even acquiring the capability.

Often enterprises maintain their independence as they recognize the distinct cultural differences and the risk of suffocation. Some organizations create workgroups that sit in isolation to the rest of the business. Maybe in a different building, a different culture, a different work experience, and often starkly different look, feel, environment, and output.

This is evidenced by Financial Services firms having in house FinTech Labs, Automotive manufacturers having a presence in Silicon Valley, retailers developing new technologies to lessen the reliance on bricks & mortar.

"A large, traditional, financial services firm with suits and ties, conservative, risk averse. A couple of blocks away, a roof top studio office full of hoodies, free snacks, music blaring and a tribe of FinTech software developers busily creating, inventing, innovating."

The core business needs this innovation to survive and stay ahead. The talent needed to achieve this goal are different, have different needs, values, desires and simply don't abide by the same rules.

Outsourcing Innovation

Tapping into outside resources to fuel your innovation pipeline may well also be an option, and an attractive one too. Specialists who scout for the latest products, services, technologies to keep you ahead of the game. Or, through their network of innovators build on demand.

Innovation: How will you Choose to Optimize your Future Potential?


4xi Global Consulting works with innovators on our quest to identify the innovations whether products, services, or technologies specifically for the world of work and ultimately how these can drive a better work experience adding value to both Employers and Operators in the space.


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