Deloitte has put out a new survey that has some very interesting findings in it. It’s called “Gambling with the House’s Money: The Randomness of Corporate Innovation,” and this gives a hint of the subject. (Free registration required, allows you to watch the webinar, and download a PDF of the Powerpoint.) Their finding is that the processes that many companies have in place are no better than a coin toss at nurturing winners. This is true whether the companies develop internally or work with an outside partner.
The majority of the time, respondents said that their most effective innovations came from “rogue inventors or under-the-radar skunk works” - these required savvy executives to spot the innovations and nurture them along, circumventing “official” processes. Unfortunately they don’t provide any hints as to how to better spot winners early.
What’s also interesting is what the survey reveals about why companies deny funding to budding innovations: insufficient profitability (55%); lack of consistency with existing core competencies (43%); or lack of consistency with existing strategy (41%). This means that companies have a surplus of innovations which are either promising but which they don’t know what to do with, or which are draining resources even though they don’t connect with the company’s strategy or capabilities. As I talked about in my earlier post, this is something I’ve seen anecdotally, so was intrigued to see Deloitte report on it quantitatively.
(A caveat pursuant to the earlier comments on ideas vs. innovation, the Deloitte study uses a rather inconsistent definition that’s not clearly spelled out, though they bring a bit more focus toward the end of the presentation.)
(Tip of the hat to Bruce Nussbaum for the pointer to the survey.)
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Marshall McLuhan said “In big industry new ideas are invited to rear their heads so they can be clobbered at once. The idea department of a big firm is a sort of lab for isolating dangerous viruses.” Christensen blames prudent management for many corporate failures in the face of disruptive innovations. Jim Collins calls good the enemy of great. Quality processes mercilessly seek and destroy variance (but itsn’t innovation by definition variance?)
Innovation is messy, its diffcult, it’s about wickedness, and above all it resists being controled, measured and managed.
Perhaps, despite all the press and all the soundbites and all the buzz, the corporate world really doesn’t want innovation–its just too much damned trouble.