Top executives in major companies regularly claim that innovation is a “top three priority,” yet 70 percent of them rate their company’s innovation capabilities as only average. Given this discrepancy, PhD candidate and friend of Innovation Resource Consulting Group Tim Michaelis (Center for Innovation Management, North Carolina State University) decided to find out what the biggest companies are doing to train their innovators. He interviewed 40 R&D directors and senior vice presidents. Here’s what he’s learned so far:
- Innovation training does not happen in most companies. Embedding specific innovation knowledge, skills, and abilities (KSA’s) into employees is what innovation training is all about. But what I discovered was it simply isn’t being done in the majority of brand-name companies. For example, one director told me, “We just don’t have the time to do innovation the way it looks in the books. If we spend too much time training people they wouldn’t get any real work done.” Instead of effective training, most firms expect their employees to “figure innovation out” in a trial-by-fire manner.
2. Boomer-age R&D innovators are retiring, taking their experience and knowledge with them. Large companies have apparently used informal means to train new hires in the art of innovation. “We hire smart people and expect them to figure it out,” one manager told me. “We do on-the-job training and trial by fire,” commented another. But will such methods be enough as experienced innovators retire en masse? The Baby Boomer generation is retiring at approximately 10,000 a day. This phenomenon will continue through 2030.
3. Large companies use portfolio management much less than they profess. “We don’t have standardized metrics to measure innovation,” one R&D manager told me, “so how could we do portfolio management? It is impossible to compare any of our projects.” Yet without standardized innovation metrics, portfolio analysis cannot be done. Thus, companies without defined innovation metrics will remain stuck in ad-hoc incremental level projects.
4. Lack of processes is not the problem. Companies are not teaching and using their processes. “We have so many processes and so many best practices [but] we just don’t have time to do innovation how it looks in the books.” When it comes to tools, again no lack here. “We have too many innovation tools, we are tooled out.” My preliminary findings suggest that the R&D units of the biggest companies are overwhelmed with innovation processes and tools, but lack the time to learn them. Companies seem to be adopting portions of best practices on an ad-hoc basis to solve current problems in their innovation pipeline.
5. Companies are confusing project management with innovation management. At the grass roots level, companies appear to be confusing Stage Gate Process with an entire innovation management system. Typical comments: “[We are] focusing too much on getting through gates and it keeps us from thinking.” “We have 157 gates before commercialization.” Others train spottily: “We train in project management but not in voice of the customer,” one veteran R&D manager commented. The result: Companies are not building a systematic innovation process to do Breakthrough or Transformative innovation. Instead, their mingled-together NPD best practices are randomly used and yet rarely discarded. Often, they linger in the culture for years, creating confusion and slowing throughput.
Implications for Management
I would hate for this article to be the bearer of bad news, but innovation in large companies today appears stuck in a purgatory of indecisiveness. In fact, as I was completing this article, I read of a study by CEB which has “collected a wealth of data that indicates a clear and troubling reality: Most business activity is slowing down, not accelerating.” CEB chairman and CEO Tom Monahan reported a “common” complaint from top managers at the world’s largest companies: ”It’s just so hard to get stuff done.”
It is clear that innovation training does not occur in the majority of companies I interviewed. However, the real problem seems to be that large company innovation processes have deviated or mutated from a once strategy driven approach to an ad-hoc, Frankenstein-esque, hodgepodge of complexity. As companies grow, they seem to be good at adding new tools to their innovation process, but bad at deleting old ones.
My recommendation: Big companies should look to simplify their innovation process relative to their strategic goals; e.g., incremental innovations or disruptive innovations. Without a strategy-driven innovation process, the question for future research becomes, how long can a company last with an overly complex and ad-hoc approach to innovation? If there is any parallel to Mary Shelly’s Frankenstein, it would suggest that the monster— ad-hoc, non-strategic, innovation process— will eventually kill its creator; namely, the company.
Tim Michaelis is a PhD candidate and research associate at the Center for Innovation Management Studies, N.C. State University. Contact Tim: [email protected]
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