If you make your innovation a hedging process – as we have discussed here – how do you lead and manage innovation? What are the special ways of reversing the process to foster valuable innovation?
If you make your innovation a hedging process – as we have discussed here – how do you lead and manage innovation? What are the particular ways of reversing the process to foster valuable innovation?
Leading innovation and what is considered good leadership are not the same. The standard view of the leader’s role – setting a vision and inspiring people to follow – works when the solution to a problem is known and straightforward, but is counterproductive when it isn’t. When a problem requires a truly original response, no one can know in advance what that response should be. So, by definition, leading innovation cannot be about creating a vision and selling it to people who are somehow inspired to make it happen. The moment you try to drive innovation within an established organisation designed to execute a repeatable and scalable business model, your chances of innovation success are slim.
Those who are successful at driving innovation are proven masters at fostering organisational innovation and recognising the team sport element of innovation. Instead of trying to create a vision and make innovation happen, an innovation leader creates a temporary organisation designed to search for a repeatable and scalable business model – a context, an environment – where people are willing and able to do the hard work that innovative problem solving requires.
The difference?
In a place of innovation, capability metrics in areas such as hypothesis testing, business model testing, customer development, agile development – will replace traditional management metrics in areas such as execution, accounting, products and engineering. To lead innovation successfully, you must prioritise continuous delivery, continuous learning, self-organising teams, minimum feature sets and pivots over managing plans, goals, processes and people.
To lead innovation successfully, you must begin to shift your mindset and thinking away from managerial thinking – or casual thinking – choosing among given means to achieve a predetermined end, as you would typically do in an operation; and begin to lead innovation with entrepreneurial thinking – or effectual thinking – imagining a possible new outcome with a given set of means.
According to effectuation – a logic of thinking discovered through scientific research and used by expert entrepreneurs to build successful businesses – the following principles are critical to fostering innovation:
The Bird-in-Hand (Means) Principle: When expert entrepreneurs set out to build a new venture, they start with their means: who I am, what I know and who I know. Then the entrepreneurs imagine possibilities that arise from their means.
Affordable Loss Principle: Savvy entrepreneurs limit risk by understanding what they can afford to lose at each step, rather than chasing big all-or-nothing opportunities. They choose goals and actions where there is an upside, even if the downside happens in the end.
The partnership principle: expert entrepreneurs build partnerships with self-selected stakeholders. By obtaining pre-commitments from these key partners early in the venture, experts reduce uncertainty and co-create the new market with its interested participants.
Leverage the contingency principle: Expert entrepreneurs invite the surprise factor. Instead of creating “what-if” scenarios to deal with worst-case scenarios, experts interpret “bad” news and surprises as potential clues to create new markets.
Control vs. predict principle: By focusing on activities within their control, expert entrepreneurs know that their actions will produce the desired results. An effective worldview is rooted in the belief that the future is neither found nor predicted, but rather made.
In a business world, there is still little room for these metrics, principles and mindsets. There is no way around it. The more you bet on innovation, the more you need to adopt the mindset of entrepreneurial leadership – especially in the corporate world!