Appetite for disruption: The vital role leaders must play when hiring talent to drive innovation
LEF recently visited the Department of Agricultural Technology and Innovation at a well-known university in the United States.
It was an enthusiastic, energetic environment filled with innovation and prototyping, from the frugal, student-led development of autonomous vehicles cobbled together with a fruit salad of consumer tech (pictures 2-3), to not-so-frugal, faculty led phenotype testing facility that is one of 3 in the USA (picture 1).
Figure 1 - Phenotype testing facility
Figure 2 - Student-built autonomous herbicide sprayer
Figure 3 - The evolution of student-built UAVs for crop monitoring
It is an epicenter of innovation often operating within aggressive financial constraints and contains true pioneers exploring the unchartered. Its facilities, know-how, post-graduate and PhD students are in high demand by industry giants. One Director of a certain lab explained that these industry giants consistently visit his lab to ideate and learn from him and his students. Given that his students are in high demand and often transition to industry, we were curious as to why these leaders of industry continue returning to his lab for leading edge innovation and problem solving? Don’t the students take their expertise and embed it into those organizations that they join?
When I put this question to him he recalled the same journey he had made from academia to industry and back again. The industry giant that hired him had demanded he conform with their ‘Large Company Way’ which was counter to the environment of experimentation and risk taking the he thrived in.
With every organization and industry responding to pressures for more radical innovation by trying to hire in ‘creatives’ or launch standalone incubators and quasi VC funds based in Silicon Valley, we are well overdue for a bit of self-reflection as to why many of these efforts fail to deliver the sort of step-change that organizations strive for.
Are there a set of organizational conditions that promote or demote innovation? What role must leaders play in challenging how their organization perceives innovation to ensure that the talent acquired to challenge organizational norms does not become frustrated, marginalized, and ultimately leave.
Challenging the Perception of Innovation
The word innovation is defined as something new or different introduced and the act of innovating being the introduction of new things or methods. The implication of introducing something new or different is that change occurs which will involve a disruption to an existing behavior. All organizations are being pressured to innovate at a more rapid rate; whether that be with new end products, new ways of working or entirely new business models. But how conducive is your working environment to rapid idea generation and change?
The technology industry exists by providing products and/or services that are intended to fundamentally challenge how organizations operate in a manner that is better than current methods. Broadly speaking, this is a behavioral cycle that has existed for decades and will exist for many more. Technology provides opportunities to disrupt existing industry operating dynamics and the means by which clients/consumers/citizens engage with organizations.
The technology industry often stimulates a perceived need by organizations to innovate how they currently operate through the addition of technology products and/or services. All too often organizations perceive innovation as the purchase and implementation of technology. LEF would argue that a technologies existence does not innately innovate but rather it is the application of technology to achieve an outcome that provides the opportunity for innovation.
The question an organization should ask itself is “Do you consider innovation to be a tool or a competency?”. How an organization answers that question has significant ramifications regarding their perception of innovation. Organizations that consider innovation to be a tool look to the application of what are considered innovative technologies to existing business processes and operating models.
Whilst there is often value in this approach, it is focused on optimization with minimal change to existing operating behaviors. However, organizations that consider innovation to be a competency leverage it as a value-driving approach to create new business operating models and/or replace existing ones.
Of course, organizations can leverage innovation in both contexts as a tool and a competency but there are significant differences between the two. Applying innovation as a competency requires an organization to have assessed its appetite for disruption regarding cultural, process, and technological ramifications balanced against the value of innovating.
The challenge though is that organizations, broadly speaking, do not contextualize innovation in this manner. By not doing so this often leads to innovation being something leaders within organizations feel compelled to be doing due to a variety of pressures and demands on them. In the ‘outside-in’ context of how new and/or improved technology can impact an organization, leaders often look to recruiting expertise from outside of the organization to deliver innovation. This approach would seem logical for a leader to take when addressing what they consider to be their innovation goal. However, all too often an organization’s existing operating behaviors can introduce inertia that hinders those hired to innovate. Leaders must identify their organization’s appetite for disruption and cultivate an environment where externally hired innovators can truly flourish rather than be hindered by existing inertia.
However, the “one size fits all” interpretation of what innovation is often leads organizations to recruit external expertise that operate from the perspective of innovation as a competency but expects them to treat it as a tool. As discussed above innovation can provide value in both contexts as a tool and a competency but each context requires talent with different skills and experience. Understandably friction can occur where leaders recruit expertise that excels at leveraging innovation as a competency but places them in a part of the organization focused on it as a tool.
This division regarding how innovation is perceived in organizations is at the heart of the challenge described in the introduction of this commentary. All too often an organization’s leadership wants the perceived value of an innovation without any cultural or operating process change. It is the organizational equivalent of a person wanting to become fit without changing their lifestyle at all. The perception of innovation drives degrees of romanticism and trepidation in leaders as they want the outcome but without any of potential change required to achieve it.
It is then essential that leadership teams within organizations clearly define innovation in the contexts how they want to apply it. Challenging a “one size fits all” perception by identifying whether external talent is needed to address an innovation as a tool or a competency. Which in turn provides a mechanism that focuses on what type of talent is needed to support an innovation goal and places them into a role that they can flourish in.
Understanding Organ Rejection
Despite the best intentions, individuals and teams are subjected to a set of norms or behaviours that can be representative of a department or the entire enterprise. As products, organizations and industries mature, a dominant design in the form of culture and operating practices begins to appear. For example, an organization operating in a mature, slow growing, highly standardized market with little product differentiation, has an underlying focus of incremental improvement, scale and strict conformance with standards. With this goal comes a set of supporting practices that impact staffing decisions, the mechanics that influence how people operate, behave and how decisions are made. Injecting new people into an environment that fits a particular profile can either promote or demote their ability to fulfil the role you want them to. Assessing cultural fit in the hiring process is nothing new. Amazon has its 14 Leadership Principles https://www.amazon.jobs/en/principles and subjects candidates to a rigorous process known as ‘The Loop’; all other organizations have their own equivalent. Yet cultural fit assumes a one-size-fits-all scenario. One-size-fits-all is never the case and culture is only one form of condition that influences how successful an individual can be in the position advertised and hired for.
Circling back to the Scientist scenario from the introduction, it was the nature of constraints placed on him that ultimately resulted in his departure. Those constraints shifted from being financial (availability of money) to structural (governance and autonomy). Despite there being ambiguous signals about the role of constraints in promoting creativity and innovation1, there are examples on both sides of the financial/structural fence indicating that with the right combination, creativity and innovation can be unlocked. For example, high financial constraints ie, money isn’t readily available, forces the use of readily available components to innovate. Low structural constraints ie, high levels of autonomy, promote blue-sky thinking and more rapid prototyping. It is, however, the pursuit of either profit or growth that acts the main driver for the mixture of constraints (Figure 4).
Figure 4 - How the pursuit of profit or growth influences constraints and innovation
Transplanting ‘creatives’, like the Scientist in the introduction or even pioneering concepts concocted in incubators, from a growth-oriented environment into one focused on profits is a recipe for organ rejection. We’ve witnessed many forms of rejection eg:
- A pharmaceutical organization recruiting B2C tech evangelists in an attempt to drive more customer-centric thinking, only to have the people rejected by incumbents because of their lack of experience working in an environment monitored by the FDA (Federal Drug Administration).
- A consumer goods giant failing in its attempt to rapidly prototype and innovate with new products and brands because of the established governance mechanisms that demanded a very predictable and thoroughly tested concept, invoked audit committees when there was deviation from the plan, which ultimately strangled the type of innovation it was pursuing.
If organ rejection is the problem, what is the solution? Build a better organ or create a more welcoming host?
As we discussed in the previous section, there are many forms of innovation that can deliver a variety of change from step-like to incremental and so the answer to the above question is ‘a bit of both’. An environment pursing profit and incremental improvement, no matter how ‘dosed-up’ it is on ‘creatives’, will always underwhelm in efforts at step-like innovation gains.
Avoid Looking at Disruption through Rose-Tinted Glasses
It is essential then for leaders in 21st century organizations to focus on the act of innovation and not purely on the outcome. As organizations often wrestle with an immunity to change, the act of innovation gets suppressed and those sought externally to provide the desired outcome can experience organ rejection. We often hear comments like “we know what we want but they just were not a cultural fit” as an explanation. Our observation of this type of situation sees organizations realizing diminished returns regarding the act of innovation.
At the heart of innovation is the drive to challenge established norms through something new. To minimize the chance of organ rejection LEF strongly advises organizations to adopt a functional capability tasked with assessing the context, disruptive impact, and skills needed regarding activities labelled as innovation. By determining whether the context of an innovation activity is focused on operational efficiency or experimentation, an organization can minimize the propensity for organ rejection when seeking to employ external skills to deliver upon the innovation outcome. This provides an operating model that allows for a high degree of task diversity for those hired by the organization for their skills in performing acts of innovation.
As discussed earlier, the differences between considering an innovation goal as a competency or tool has a significant impact on the type of people and skills suitable for driving the act of innovation. This requires 21st century leaders to have a significant level of emotional intelligence regarding the cultural preference of the individual balanced with the cultural style of the organization. Ask yourself these questions:
- What is the predominant culture at play within your organization?
- Have constraints (e.g. orientation to risk, resource allocation, working methods) manifested around that type of culture?
- How do they promote or demote your ability to innovate?
- Are new hires, especially those who are expected to innovate, subjected to your universal set of constraints?
- What can you change to get out of their way?
LEF believes that by focusing on the act rather than the outcome of innovation in the manner described in this commentary that leaders within organizations can limit the potential for organ rejection and eliminate the ‘rose-tinted glasses’ of disruption.