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Vijay Govindarajan: why most companies fail at innovation

Written by: on  September 14, 2010

We’ve all been there: The company realizes that it needs to prepare for the future and suddenly BIG, SEXY, DRESSED-IN-LEATHER ideas start bouncing around. People get turned on, ego’s inflate and pupils widen at the potential. Meetings and creativity build and the innovation movement starts racing ahead.

Now fast forward a few months. Dry, unfulfilled staff ditch innovating for the future in favor of what pays the bills, in the present. The company is stuck in the little performance engine mode. As titilating as the future ideas may be, they don’t pay the bills right now and frankly, there just isn’t enough time to split between the team.

That’s the hard part of innovation, execution. It’s what Vijay Govindarajan has researched for the last ten years in his new book, “The Other Side of Innovation“: How to get past the easy part of innovation (coming up with the ideas) and get on with the hard part – dropping the hammer and executing.

Vijay explains that the biggest stumbling block in a company’s road to execution of an innovative idea is building the team. In creating a dedicated team to make the idea a reality, at least 25% of the staff must come from the outside. The team needs to be created like a start up. If 100% of the new team is existing staff, relationships between the team take after old patterns, resisting innovation. Outsiders are needed to shake up and challenge current company wisdom. This means creating new, creative job titles that have nothing to do with the existing company. During the formation of the dedicated team, the CEO’s most important job during innovate phases is to ensure the core business is not slated.

My take?

Over a year ago I was in an PR agency that wanted to innovate into the internets. I was asked to help create the company blog and guide the social media efforts. At first everyone was excited but then we quickly realised that existing pressures of the day to day took precedence over the future. Meetings were wasted and down the line nothing innovative happened. The agency ended up losing revenue since clients who needed to look good online went to different agencies. I felt the excitement at the start but then the little performance engine took over and innovation was postponed until it was too late.

Prideful Rockstars. Another problem connected with creating an innovation team is how cool the new team feels, usually juxtaposed with the existing company. All the credit for the future goes to the innovation team and they often feel that they should be risky and sometime rebellious. But that is simply untrue. It is the role of the manager of the team to ensure that small failures along the way are to be learned from. Instead of being held accountable for results, innovators need to be held responsible for explaining what they learned from each step. Innovation does require much tweaking along the way so a team that looks back on why something is working or failing is integral to success.

To summarise what I learned from Vijay’s book I’ve drawn a simple diagram, it sums up the challenge of innovation. Everyone is pumped to climb Mt. Innovation and races forward, to the top to form the idea and create a game plan. But once the idea is reached, the hard, unglamorous part comes, working to make it all happen. This part is hard work and problem solving, the newness of the idea gives way to the grind of ongoing execution:

Does your company need to innovate, do you have a game plan?



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