Insight into Why Companies Can’t Innovate

Simplivative blogAs we begin to kick off our CEOtoCEO Innovation Teams, John and I are totally immersed into seeing how successful companies are innovating and on the flip side, what is keeping companies from innovating – or at least why they aren’t being as successful as they would like.  Sometimes figuring out why something doesn’t work gives you better insight into how to get it to work…that is the story I want to share today.

One of our Innovation Team members, Rick Smith, CEO of EJ Bartells in Renton, WA co-authors a blog on innovation called “Simplivative” – which is a fun new word they created which is all about “Finding simple ideas from Innovative Solutions.” Rick just posted on his blog a great story, “Are your ‘Incentives’ stopping your ability to Innovate?“, with some links to some great research by both Fast Company and PricewaterhouseCoopers in 2011. Definitely worth reading if you are trying to be a more innovative leader or want your company to be more innovative.

The intriguing part of his message is around the “culture of innovation.” This is probably the most difficult aspect of innovating inside any company.  If you think about what “innovation” really means it translates more to “execution” that coming up with the next great idea.  Everyone has great ideas and suggestions – but it is the process of making these a reality, executing on the great idea, that allows the idea to become new innovation. Innovating a great idea, product or service or simply an improvement, simply means taking this and putting it into action inside your organization.  If it never becomes actionable, it can’t help the organization be more innovative.

To this point, Rick points out a truly interesting observation from the study and survey by FastCompany and PWC.  The key point was that most management teams have the incentive to make their numbers, be as efficient as possible and create as little change as possible – just make or exceed their numbers.  They are actually incented AGAINST INNOVATION because this would mean trying out new ideas and probably failing on a number of fronts – this is not what they are measured on or paid on. So if this is prevalent in an organization, how are managers supposed to innovate at the same time? They don’t. Until this method of measuring and incentivizing management changes, innovation won’t occur!

Thanks Rick for sharing this insight and for capturing for many the dam that is keeping the river of innovation from flowing inside many organizations.  This is certainly a topic we will be attacking head on in our Innovation Teams as well because without a doubt, it is a “show stopper”…


One Response to Insight into Why Companies Can’t Innovate

  1. Thanks for the mention in your blog post – I’m flattered and appreciative. We have been having lots of fun with the blog and learning a great deal more about innovation by telling some stories and sharing content we think would be helpful for any leader interested in innovation in their organization.

    We have a long way to go, like most companies, in this area of creating a culture and leadership team focused on innovation. We view it as a “journey” rather than a “destination” or project. I look forward to participating in the Innovation Teams – I know I will learn a lot from my fellow business owners and leaders.

    Again…thanks for the kind words and the mention – much appreciated!


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