A colleague of mine asked me a great question this morning. I accidentally found myself writing the following article as my response.
"What is the biggest obstacle to innovation in a company?"
Metrics that Matter.
You can't manage what you don't measure, and most innovation efforts judge themselves by fuzzy, qualitative metrics that simply aren't board-room relevant. Something is meaningfully innovative if it is both New AND Better. The sniff-test for "New" can be pretty liberal, but "Better" had better be expressed in money* saved or earned, period. More specifically, the innovation must be shown to be able to save/earn 2x to 10x more money vs. whatever legacy alternative it is out to displace.
Jeans and Khakis
The vast majority of workplace innovation programs bubble out of either Technology R&D (CTO) or Product/Marketing (CMO) groups. My friend and former Accenture colleague Baiju Shah calls them the "Khakis" and the "Jeans", respectively. Khakis are typically brilliant technical problem solvers. Jeans are typically talented creatives. Neither are known for their rigorous business-case mojo.
The Khaki crowd over-focuses on the primacy of emerging technologies. That said, they rarely manage to articulate the power of those new tools in hard cash saved or earned. #geekFail
Likewise, the jeans-clad marketers prize customer research. But for all of their sizzlin' insight-driven storytelling, they too tend to struggle at communicating precisely how many additional dollars can be saved or earned through a given innovation. #sparkleFail
So what to do? Suit Up.**
The more I've worked with innovators in both startups and corporations, the more I've seen the first-hand evidence that financial focus and acumen separates successful innovators from also-rans.
Most "innovator" types get into technology and product innovation, in part, because they feel stifled and bored by beige conformity and rule-following. As a result, innovation teams tend to lack "Suits": People with CFO DNA who can best translate their "new and better" pursuits into a story that resonates with other executives.
Winning innovation teams need to develop the left-handed skill of financial literacy. They should do that in two ways:
- Proactively hire a financially fluent Suit into their innovation team. A real-deal innovation team has at least one financial & business strategy expert on the boat. This person has two primary responsibilities: 1. Keep the wizards in line. 2. Explain the salient bits of the wizardry to external muggles in language they can understand and appreciate.
- Furthermore, everyone on the team needs to strive to be conversant in big-league business and finance language: Pro-Formas, ROIC models, LTV/CAC ratios, and balance sheets might as well be Martian to most techies and creatives. Unacceptable. The best innovators need a passing understanding of their inventions' path to profitability. Remember: Inventors turn money into ideas. Innovators turn ideas into money.
Cut yourself some slack(s).
Neither the Jeans nor the Khakis are going to initially find it easy to team with the Suits. The Jeans will probably find the Suits uninteresting; the Khakis will find them unexceptional. Like adding spinach to a plate full of colorful sweets.
But here's the thing: Somewhere above your exciting innovation program sits a governance body with check-writing authority. Maybe it's called "the Innovation Board". Or the "Executive Leadership Team". Maybe it's even the literal Board of Directors. The higher up you go, the more likely you are to encounter Suits. Seasoned captains of industry who enjoy sweets, but who delight in spinach.
Does your innovation kitchen cook up what they're craving?
*For the purposes of this article, let's presume Time also counts as money.
**For the record: This suit stuff is a metaphor. I'm not encouraging anyone to buy a new wardrobe. As Thoreau said best: "Beware of any enterprise requiring new clothes."