Designasterisk

There was an interesting article in the New York Times last Friday, Innovation, by Order of the Kremlin, which discusses 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.

Perhaps 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: Maintainers and Innovators. These are descriptive of two important approaches to work product (neither of which diminishes the other’s value to an organisation). In this case, Maintainers 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 improvements over time). This has been the purview of MBA programmes and the model that most businesses aspire and adapt to.

The other approach to work product is the Innovator. In this case, it’s not about incremental improvement, rather it is about wholesale change. Innovators 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 way outside of the competence and comfort level of the organisation they work within. You can see where having both Maintainers and Innovators within the same organisation would be 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. 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 to integrate innovation into their organisation is to create a skunkworks, just as Russia is doing. For those not familiar with the term, Skunk Works was the name of a group at Lockheed Martin that was given a very high degree of autonomy and was unhampered by corporate bureaucracy while they worked on secret projects. In this model, one wouldn’t bother trying to change the existing machine (or the Maintainers in my previous example), instead one would give carte blanche to a smaller and more nimble team to explore and invent without encumbrances. The challenge with this method of innovation is that the results 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 can be adopted by an existing organisation. Perhaps Russia’s foray into protected innovation cities isn’t the panacea for business 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 Maintainers to promote and improve the products, processes, and services necessary for the efficient and predictable running of a business. We have also been asking these same Maintainers to envision, develop, and implement new and disruptive technologies and platforms. It has been clear for at least the last decade that Maintainers are ill prepared for that task. Unfortunately, most organisations who are trying to build a culture of innovation do this by attempting to train Maintainers into being equally successful Innovators. I think this is at the root of the problem. In a general sense, Maintainers are not Innovators, nor is the opposite true.

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 Maintainers and Innovators do well. The real challenge isn’t in trying to develop Maintainers into Innovators, but rather creating a culture that allows Innovators to find success, accolades, and promotion within structures that historically don’t reward such outlier behaviour. Unfortunately, companies typically try to either make the same people play both Maintainer and Innovator roles, or Innovators are sequestered within a skunkworks where they can’t 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 and no actual change takes hold. This is to be expected, as there are few, if any, innovation advocates within organisations who are empowered to take the ball and run once the agency’s work is completed.

When organisations create incentives for Innovators to flourish within their culture, they create advocates for sustaining innovation. By having internal advocates manage the process of change, Maintainers are free to help integrate new approaches to business and implement the necessary processes and procedures to ensure a robust platform. Basically, Maintainers enlist the expertise of Innovators to implement innovation. Innovators work to challenge, envision, and prototype new approaches to business without having to be “graded” on their ability to function simultaneously as Maintainers.

The call-out to business is that, if they want to create compelling and competitive platforms, they need to enlist the support of Innovators as part of the business culture. This means creating incentives and rewards for promoting innovative behaviour that is separate to what makes a successful Maintainer. The challenge is that traditional metrics and key deliverables are poor indications of successful innovation. The design problem becomes much more focused when it’s not about integrating an innovation culture, but rather defining how to encourage and reward Innovation management and work product. For an organisation that has not yet integrated Innovators 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 Innovators often end up working for outside agencies, freelancing, or find themselves under-appreciated and move from company to company, taking their own expertise, knowledge and potential with them. The answer isn’t creating “walled cities of innovation” within companies through skunkworks, outside design firms, or buying one’s innovative competitors. The answer lies in leveraging the inherent skills in two types of staff, Maintainers and Innovators, and incentivising each to be measured for the type of success they promote.