Steve Blank Why do businesses and governments make the "theater of innovation" rather than the actual innovation

This article has already been published in the Harvard Business Review.

The type of disruption that most businesses and government agencies face is a unique event every few centuries. Nowadays, the disruption is not limited to changes in technology, channel or competitors: it's all at the same time. And these forces are completely reshaping trade and defense.

Today, as large corporations face constant disruption, they recognize that their strategy and organizational structures are not flexible enough to access the innovative talent and technology they need to face these challenges. . These organizations know that they have to change, but the result has often been a form of Whack-A-Mole organization – a futile attempt to try to solve all the problems as they arise. arise without understanding their primary cause.

In the end, businesses and government agencies must stop doing so or they will fail.

We can create a state of mind, a culture and a process to solve this problem – what I call a Doctrine of innovation. But first we need to step back and recognize one of the problems.

I have just spent a few days in a large organization with a long history, which, like most of its peers, is facing new and rapidly changing external threats. However, their biggest obstacle is internal. What used to be a strength – their successful management processes – now holds back their ability to cope with new challenges.

Companies operate according to the process
Once upon a time, every big organization was a ruined company willing to take risks – new ideas, new methods, new customers, goals and a mission. If they were a commercial enterprise, they determined the product / market fit; or if it was a government organization, the focus was on the adequacy of solution / mission. Over time, as these organizations have grown in size, they have created a process. By process, I mean all the tools that allow businesses and the government to implement a repeatable execution. HR processes, legal processes, financial processes, procurement and contracting processes, security processes, product development and management processes, types of organization forms, etc.

The process is great when you live in a world where the problem and the solution are known. The process helps to ensure that you can provide solutions that evolve without breaking other parts of the organization.

These processes reduce risks for the entire organization, but each process layer reduces the ability to be agile and lean and, more importantly, to respond to new opportunities and threats.

Process versus product
As businesses and government agencies grow, they begin to value the importance of the "process" over the "product". And by product, I mean the creation of new hardware, services, software, tools, operations, management processes are not the same people as those who create product. Product people are often in disarray, hate paperwork and prefer to spend their time creating things rather than documenting them. Over time, as organizations grow, they become risk averse. The people in charge of the process dominate the management, and the people responsible for the products are accountable to them.

If the business is large enough, it will become a "rent seeker" and will turn to the government and regulators as the first line of defense against innovative competition. They will use government regulations and lawsuits to keep new entrants out of more innovative business models.

The result of monopoly behavior is that innovation in this sector has been extinguished – until the behavior of the technology / consumer rules it out. At that time, the company lost the ability to compete as an innovator.

In government agencies, the product process has gone further. Many agencies outsource product development to private contractors, leaving the government mostly responsible for the processes – who draft requirements and oversee acquisitions, program management and contracts.

However, when the government faces new adversaries, new threats or new problems, internal process managers and external contractors are reluctant to obsolete their own systems and develop radically new solutions. For the subcontractors, any novelty offers the real risk of losing an already lucrative revenue stream. For the process, the status quo is a known and comfortable space, and failure and risk-taking are considered career delays. Metrics are used to manage processes rather than creating new features, getting new results, and speeding up deployment. And if the contract and the contractor are important enough, they endorse things and use the political process and lobbying to maintain the status quo.

The result is that existing systems remain as albatrosses and constitute an obstacle to the country's security.

Theater of organization and innovation
A competitive environment should drive a government business / agency towards new forms of organization that can respond quickly to these new threats. Instead, most organizations are looking to create even more processes. This usually happens in three ways:

  1. The first innovation leadership plan is to recruit management consultants to publish their 20th century games book. Consultants reorganize the business (surprise!), Often moving from a functional organization to a matrix organization. The result is theater of organization. The reorg occupies everyone for a year, perhaps it gives a new focus on new areas or new goals, but ultimately constitutes an inadequate response to the need for rapid product innovation.
  2. At the same time, businesses and government agencies generally adopt the principles of innovation. activities (hackathons, design classes, innovation workshops, etc.) that lead to theater of innovation. These activities shape and build culture, but they do not win wars and rarely deliver products that can be shipped / deployed.
  3. Finally, companies and government agencies have realized that the processes and measures put in place to optimize execution (procurement, personnel, security, legal, etc.) constitute an obstacle to innovation. Efforts to reform and redesign these concepts are well-intentioned, but without a global innovation strategy, it's like building sandcastles on the beach. The result is theater process.

For most major organizations, these reorganizations, activities, and reforms do not increase business revenues, profits, or market shares, nor do they allow government agencies to outsmart our opponents. They can be generously described as dead ends in innovation.

Between the hammer and the anvil
Currently, businesses and government agencies are not able to access the innovative talents and technology they need to meet and mobilize these challenges. The very processes that made them successful hinder them.

Organizational overhaul, innovation activities and process reform need to be part from a plan of assembly.

In summary, large organizations lack common beliefs, validated principles, tactics, techniques, procedures, organization, budget, and so on. to explain how and where innovation will be applied and its relationship with the rapid delivery of a new product.

We can create a state of mind, a culture and a process to solve this problem.

More in the next posts on Doctrine of innovation.

Lessons learned

  • As companies and agencies grow, they begin to value the importance of the process over "content".
  • In the event of a disruption, no process or process manager in the world will save your company / government agency
    • It will take these creators of "products"
    • But they do not have organization, authority, budget or resources
  • We can create a state of mind, a culture and a process to solve this problem.
    • A set of shared beliefs and principles about how and where innovation will be used and delivered quickly
  • Innovation Doctrine

Filed under: Customer Development, Doctrine of Innovation |