I once read an article in the New York Times, Innovation, by Order of the Kremlin, which discussed Russia's latest attempts at designing an environment of innovation to compete against the likes of Silicon Valley (and their copy cat cities around the world). What's remarkable about the story is that the protagonists (in this case Russian expats from Silicon Valley VC groups and the Deputy Chief of Staff of the Russian Federation, amongst others) are working to create, not a walled-off city of scientist a la Cold War Soviet Union, but a bureaucracy-free zone un-mired by the unaccountable and varied enforcement of tax laws. Just outside Moscow now sits the promise of a city dedicated to developing new ideas to wean Russia off of its economic dependance on oil. Russia's new venture is great for a number of reasons – not the least of which is a move towards helping Russia avoid the massive intellectual capital brain-drain it has endured for the last twenty years. But the more subtle implication is the object lesson it provides for most large organisations. It wouldn't be a stretch to compare most business cultures to the stereotypical red tape and institutional/policy barriers created by many governments. The implication from the NYT article is that, like Russia, to actually create an innovative environment an organisation needs to protect itself from the machinery that makes most organisations tick along so steadily. Easier said than done. But one might argue, if Russia can do it, so can Citibank or British Airways, amongst others.
Yet, I believe the argument for businesses creating "walled cities" of innovation is short-sighted. The real question isn't whether or not organisations should create external innovative cultures, it's knowing how to incubate a culture so that it produces the desired outcomes for growth. I've often spoken about the dynamic whereby most businesses enlist two general types of workers: Nurturers and Explorers. These terms are descriptive of two equally important approaches to work product, neither of which diminishes the other's value to an organisation. In this case, Nurturers are skilled at taking a known processes and honing it to a sublime result (think specialists who master an important function and continue to provide incremental, evolutionary improvements over time). This has been the purview of MBA programmes and the model that most businesses aspire and have adapted to, especially as they grow in people and complexity.
The other, and less common, approach to work product is what I'll call the Explorers. In this case, it's not about incremental improvement, rather it is about wholesale change. Explorers are looking to delve into areas where there is little expertise or specialised knowledge. The goal is to explore the potential of new methods of growth or engagement, typically far outside of the competencies and comfort level of the organisation they work within. You can see having both Nurturers and Explorers within the same organisation is desirable, but it can also be problematic. Challenging the status quo in many companies can be an exercise in futility, and equally problematic is trying to institute structure and process onto creative groups looking into "what could be". If this our fate, how can any organisation hope to be both efficient and innovative?
One of the most common solutions a business might be tempted to take is integrating innovation into their organisation by creating a skunkworks, just as Russia is doing, giving Explorers a very high degree of autonomy, unhampered by corporate bureaucracy. In this model, one wouldn't bother trying to change the existing machine (or the Nurturers in my previous example), instead one would give carte blanche to smaller and more nimble, experimental teams to explore and invent without encumbrances. The challenge with this method of innovation is that the output of your skunkworks needs to be incorporated back into the culture where it couldn't flourish to begin with. While a skunkworks is fantastic as a method for creating new businesses that develop on their own, this method is less useful for creating ideas that will be readily adopted by an existing organisation. If Russia intents to influence it's own industries and governments, perhaps this foray into protected innovation cities isn't the panacea it appears to be at first blush.
To have an integrated impact on an organisation, innovation has to be a function of the business process itself. In my example above, we rely on Nurturers to promote and improve the products, processes, and services necessary for the efficient and predictable running of a business. Yet, most organisations have also been asking these same Nurturers to envision, develop, and implement new and disruptive technologies and platforms. It has been clear for at least the last decade that Nurturers are rarely developed, both personally and professionally, to excel at, or even enjoy, the role of Experimenter. There is a growing, although I feel misguided, trend for Nurturers to up-skilled their ability as Explorers. I think this is at the root of the problem. In a very general sense, Nurturers are not Explorers, nor is the opposite true [note, in reality there are many who do stradle this line successfully, but most organisations are poor at recognising and rewarding these dual behaviours]. Does this mean that one type of work model is more creative than the other? Of course not. It has everything to do with the specialist vs. generalist nature of work, not the skill or inventiveness within any model.
To fundamentally improve an organisation's approach to innovation, companies need to build on the inherent skills and talents of their business cultures (which, traditionally, are also inherently non-innovative) by focusing on what both Nurturers and Explorers do well. The real challenge isn't in trying to develop Nurturers into Explorers, but rather in creating a culture that allows Explorers to find success, accolades, and promotion within structures that historically don't reward such outlier behaviour. Regrettably, many organisations try to either make the same people play both Nurturer and Explorers roles, or Explorers are sequestered within a skunkworks where they struggle to remain vital to the organisation.
It is common for companies, especially ones that are struggling to maintain a competitive position, to look towards outside agencies to help them develop an innovative approach to their business. These agencies typically specialise in strategy, change management, or service design, and promise to help develop methods for growth whilst also imparting a process that the company can adopt to implement innovation on their own. My own experience is that those projects go fairly well as long as there is agency involvement, but flounder after completion–typically no real change takes hold. This is predictable, as there are few, if any, innovation advocates within organisations who are empowered to take ownership and agency once a project is completed and handed over.
When organisations create incentives for Explorers to flourish within their culture, they create advocates for sustaining innovation. By having internal advocates manage the process of change, Nurturers are empowered to help integrate new approaches to business and implement the necessary processes and procedures to ensure a robust platform. Nurturers become the experts in implementing innovation without the ambiguity of trying to determine "what could be" whilst Explorers work to challenge, envision, and prototype new approaches to business without having to be graded on their ability to function simultaneously as Nurturers.
The call-out to business is that, if they are committed to creating compelling and competitive platforms, they need to enlist the support of Explorers as part of the business culture. This means creating incentives and rewards for promoting innovative behaviour that is separate to what makes a successful Nurturer. The challenge is that traditional metrics and key deliverables are poor indications of successful innovation. Business innovation becomes much more focused when it's not about integrating an innovation culture, but rather defining how to encourage and reward Explorers and their work product. For an organisation that has not yet integrated Explorers into their culture, perhaps the best use of an outside consultancy is to help answer that question.
Just as Russia has suffered a brain drain to the Bay Area, businesses have lost the other half of their talent to innovators who have no place to flourish in a traditional organisation. Instead, these necessary compliments to Nurturers often end up working for outside agencies, freelancing, or find themselves under-appreciated and move from division to division or company to company, taking their own expertise, knowledge and potential with them. The answer isn't creating "walled cities of innovation" within companies through the likes of skunkworks, outside design firms, or buying one's innovative competitors. The answer lies in leveraging the inherent skills in two types of staff, Nurturers and Explorers, and incentivising each to be measured for the type of success they promote.