Note: This is part of a series of posts explaining the individual parts of The Innovation Matrix. See this post for a description of the full model and what can be done with it.
The important issue with these firms is that they are pretty good at executing ideas. They may be in a position where they have to do new things just to survive, or they have developed a culture that supports experimentation, or they are good at learning. Experimentation and learning from failure are two of the elements of Innovation Competence, and it’s possible to do these without explicit processes in place to support them. And some organisations are naturally good at generating, selecting, executing and diffusing ideas.
But for whatever reason, these firms don’t have much organised support for innovation, leading to a low level of Innovation Commitment. They may not have the resources (time and/or money) needed to develop formal processes to support innovation. And they don’t do any of the other things that indicate a commitment to innovation.
This seems to be a counterintuitive quadrant to be in, but there are actually quite a few types of firms that end up here. These include:
- Firms in industries that require experimentation and learning: the two industries that spring to mind here are universities and medical institutions. Both hire a lot of pretty smart, creative people. Neither tends to have much of an explicit commitment to innovation, leaving people to experiment and learn on their own. In the case of medical institutions, experimentation is often required in order to respond to unusual and urgent situations. These firms usually don’t manage innovation as a portfolio, nor do they manage all of the components of the idea management process very well. Typically, they are not very good at all at diffusing ideas (a problem universities try to address with commercialisation offices), and they are also often poor at idea selection.
- Most startups: some startups are terrible at innovation, but most actually have some ability to execute new ideas, or they don’t survive. However, because they are focused entirely on survival, even the innovative startups usually don’t have the resources to put processes in place to support innovation. Also, such processes seem too much like management, an idea that many entrepreneurs avoid The Four Steps to the Epiphany: Successful Strategies for Products that Winby Steve Blank and The Lean Startupby Eric Ries both include many strategies designed to address precisely this issue – encouraging startups to develop the processes they need to support innovation.
- Firms that innovate accidentally: the firms that give this category its name come from a variety of industries. They are those that end up being pretty good at executing a large number of incremental innovations, usually in a bottom-up manner. Many of the resources firms that John and I run into here in Australia fall into this category. In one that we’ve worked with, everyone in their head office said “we don’t innovate at all.” But out in the field, we found people all throughout the company coping with operational problems creatively and innovatively. The lack of support from management indicates no Innovation Commitment, but the firms end up being ok at executing ideas.
What should your approach to innovation be if you are in this box? The first thing to do is to think about the potential pitfalls of being in this category. The big one is that few firms here have an innovation portfolio. Consequently, they are bad at consciously developing game-changing innovations.
This is why universities, which in the normal course of operations generate many potentially big ideas, are doing such a poor job of dealing with the potential disruption of the internet on higher education. In fact, many of them are actively resisting innovation in the teaching space.
In order to embed innovation as a repeatable process, these firms need to increase their commitment to innovation. The genuine accidental innovators often don’t care enough about the issue to do this, but the other two groups often do – they just don’t know where to start.
For startups, building a firm is an important step in their development. This is why Blank and Ries spend so much time in their books talking about how to do this effectively. In addition to building processes to support a mainstream, scaled-up business, it is also crucial for startups to build innovation processes as well.
For the first group, they often don’t realise that their strengths in experimentation and learning can lead to increased innovation skill. I can clearly remember a conversation that I had with a medical administrator last year. I was called in to help the organisation develop an innovation strategy. When I described incremental innovation, he said “But we already do that really well.”
He was right – they do. The next step that they need to take is to build some processes to take advantage of the innovation skills that they already have.
The prescription for most of the accidental innovators is precisely that – look at how you can increase your Innovation Commitment. If you do that, if might make a Fit For Purpose innovator, but it could also move you up diagonally into the Star box – which is a pretty good outcome.