Last week, I was fortunate enough to attend a great event here in Tulsa called Collab25, put on by Tulsa Innovation Labs (TIL).
Tulsa Innovation Labs is a really interesting organization that looks to drive innovation at a regional level by connecting with innovators to assess their needs, identifying barriers to success, and driving sustainable growth through initiatives that are co-designed with partners.
I came away from the event impressed by their completeness of vision, and if you are interested in how to innovate strategically, I'd strongly recommend looking into them.
But as I took a long walk home that day, I also got a bit reflective, thinking about what I have learned about innovation over the years and how I got there. It turns out that almost every significant discovery I've made in this field has come from some kind of challenge, or, I suppose, failure.
So in today's newsletter, I'd like to walk you through four of the most important failures and the learnings that came from them. So, strap in - things are about to go badly wrong.
Failure 1: The Ideas Don't "Just Come"
In 2008, fresh into a new corporate job in Enterprise Architecture, my boss had a proposal for me…
"You have way too many ideas. Do you want to run an innovation function?"
I assumed (hoped) the first sentence was a joke, said yes, and jumped in.
To be fair, my boss was right. I was definitely an "ideas guy". My ideas didn't necessarily burst out in brainstorming sessions in front of the whiteboard, but I had the capacity to come up with original concepts that, on the surface, seemed like good ideas to others as well as me. I started to wonder how many other people in my company were having original ideas too, and what (if anything) was happening to those ideas.
Then I went to an innovation conference at Gartner, and was introduced to a fascinating company called Innocentive. Innocentive at that time was built around a really intriguing concept - that no matter how large your company, there are more smart people outside your organization than in it. So why not tap into that wisdom of the planet, by issuing global innovation challenges?
I came back from the conference with several yo-yos (the go to conference gift at the time) and an idea. I knew there would be strong resistance to external challenges, but we could use the same approach of incentives and rewards to source innovation internally, from the 60,000 or so employees in my company. After some back and forth negotiation with my manager, we landed on a smaller pilot. Just the 2000 or so employees in IT to get us started.
It was disappointing to start so small, but that disappointment soon faded when I began socializing the concept. Everywhere I looked I found people who were full of ideas, good ones, about how to improve our business. "There is gold here!" I thought.
So, the very next day, we launched a simple SharePoint site, where any employee could submit an idea, and waited for the ideas to flow in.
Except they didn't. This seemed odd. Even the employees who were happy to share their ideas verbally didn't submit them. It didn't take much digging to find out why.
"It won't go anywhere, so why bother?" came one response. "My manager won't want me distracted," came another. "If we do it and it fails, I'll get the blame," came a third. Every response was a variant on the same theme. Innovation represented risk, and nobody wanted to take that risk.
We changed the game a little bit with cash incentives. These were not huge, but each month we offered a raffle prize for submissions, with a second, larger award for any idea that was taken forward into proof of concept.
But this didn't fully overcome the fear. In a sense, it wasn't surprising. The company had had major layoffs, and more were forecast. So, many of the remaining employees were in pure survival mode - the unwritten mantra was "keep your head down and do good work". Innovation felt like a luxury that we couldn't afford, and amidst an economic downturn, no one-off cash prize could overcome the fear of job loss.
Ironically, this was the exact opposite of what we wanted. I was given the job in the first place precisely because we were struggling as an organization. We needed new ideas across all aspects of the business, and our R&D function was solely focused on the core products we already sold.
So I learned that the phrase "Necessity is the mother of invention" can be misleading. It works when there are truly no other options, but not until that is the case. Innovation flounders without psychological safety.
Failure 2: It's Not Really About Ideas Anyway
The great thing about corporate innovation is that people in this function love to talk about it and share ideas. So I met often with a growing circle of innovators in Seattle and Silicon Valley. As we thought about molding the future, we'd often look back fondly to the past, and one particular legendary time and place.
If you don't know about Xerox PARC, it's a phenomenal story of innovation, perhaps most entertainingly told in Robert X. Critchley's book Accidental Empires. The list of inventions that emerged from Xerox PARC is staggering. Here are just a few: the PC, the mouse, the graphical user interface, laser printing, and Ethernet. But there are many, many more.
I loved the story, in part because it showed that so much of our modern world has lineage back to just one place and time. Many of us wondered if there was a way to replicate this and have our own never-ending flow of ideas.
The general consensus from those who were at PARC or knew people there was that the magic came from a collection of conditions - highly talented people, interdisciplinary freedom, a culture of play and exploration, physical and psychological distance from corporate headquarters, and organizational support for risk-taking and serendipity.
So, we did our best to replicate as many of those conditions as possible. We focused less on enabling innovation from everywhere and more on creating a safe, fun space for the lucky few to "play".
And yes, more high-quality ideas did flow.
But that, unfortunately, is where things stopped. They stopped because we lacked a reliable engine to turn ideas into business success. In fact, we probably had enough ideas already, and even had a reasonably good way of figuring out which ones might work well. But there was no execution engine - not in our team or really anywhere.
Our ideas were practically unlimited, making it almost impossible to identify groups or individuals willing and able to catch balls we'd thrown in the air. Or as one person on our team with a physics background put it, we are all potential energy, and no kinetic energy.
I learned from this experience that execution driven by innovation requires clear focus. And the focus area has to be important to the organization.
And this is actually the other, glass-half-empty view of Xerox PARC. This extraordinary place basically invented the modern computer and modern networking.
But we know Xerox for making photocopiers. When it comes to corporate and regional innovation, execution is everything.
Failure 3: Infrastructure is Not Enough
By this time, I was at Microsoft and in a dedicated Applied Innovation team.
Looking back, we were a pretty ragtag bunch whose main qualifications seemed to be that we didn't fit particularly well anywhere else, and that almost every system we encountered seemed ripe for disruption.
I was really excited about this opportunity, because with it came something that my previous job didn't have - billions of dollars of investment in a private and public cloud infrastructure that was improving every day.
That's the remarkable thing about Cloud computing that is rarely talked about. Before the cloud, the moment a computer arrived in your data center, it was aging out of existence. Here was this new piece of technology that wasn't getting worse every day; it was getting better!
So with this huge advantage, we set about finding organizations from innovative startups to large enterprises and even governments, who wanted to make the most of digital transformation and use it as an opportunity to leapfrog their competitors. I'd help them imagine new products and services, and a team of technical architects would come in behind me to make the dream real.
Did it work? Well, we certainly had real success stories. We drove significant additional revenue in public cloud services, and we helped several organizations create brand new business lines.
But we also saw things go wrong, some of them quite expensively. On the surface, these mistakes looked quite different from each other, but actually, they often had a common cause. We were assuming success rather than looking coldly at the factors that might cause things to go wrong and addressing them.
The problem here was not that some of the innovative ideas didn't take off. If everything you do works in an innovation function, it is a clear indication that you are not taking enough risk. The issue here was that we were not foreseeing things that were foreseeable.
We've actually known for a while how to prevent this from happening. The concept is called a Leap of Faith Assumption (LOFA). It was pioneered in the book The Startup Way, and it's applicable to almost any innovation activity.
A LOFA is the assumption that you make, which, if proved wrong, will have a detrimental effect on your business or idea. Once you know what your LOFAs are, you can test them. If testing reveals that an LOFA is an issue, you can decide whether to address it or abandon your idea.
We were not identifying LOFAs or testing them, and as a result, we were continuing with initiatives we didn't need to.
Failure 4: The System
I'll skip forward now to my final innovation job at Microsoft, and the one I found by far the most interesting.
By this time, Microsoft had some good experience in innovation as a function, beyond simply creating new products. And I'd learned a huge amount, not just internally, but with partners I was working with across the automotive, banking, manufacturing, and healthcare verticals. I'd even had the opportunity to teach some innovation workshops, and witness firsthand some of the challenges our customers had.
But my new role was different. An "internal startup", where, by and large, my co-founders and I got to make the rules. We made sure we got a lot of the basics right. We created a culture that emphasized free thinking without fear of failure. We internally recruited people who loved to explore and develop ideas. We focused our efforts on an area (Clinical Research) that was both ripe for disruption and an area of interest to our own health research team. We even identified early LOFAs around reference architectures and standards, and addressed them.
These activities put us in good shape, as did our decision to avoid putting Microsoft at the center of innovation activities, and instead center all innovation around a shared mission of making life-saving therapies available to patients faster. This shared mission created a community of organizations that worked together to solve the problem, of which we were just a part.
So, was it successful?
By most measures, yes. We sponsored, participated in, and won hackathons that later resulted in new, more efficient clinical research services. We advanced the reuse of clinical research data, enabling studies to build more effectively on previous work. And we helped resolve challenges around the consistent application of standards, allowing for research to work more effectively across multiple datasets. In the process, we generated millions of dollars in additional cloud revenue for our company and successfully transitioned the function into the healthcare business.
But even here, there was definitely an element of failure.
Our work, and the way we approached it, was very different to almost anything else going on in the company. We fully embraced the startup mantra and our remit to behave differently and model new behaviors.
But as we did this, we completely underestimated one thing. The challenge our behavior posed to the rest of the system. As we were travelling around the country, moving fast with our customers, we were disrupting those customers and even our own account teams. They would spend months carefully working towards a nice, straightforward renewal, then we would show up and change everything. We would even occasionally and unintentionally make our technical architects look stupid at a customer, because they were not up to date with something we'd invented the week before.
Basically, as we were moving fast and breaking things, we were disrupting the relationships we needed to ensure long-term success. When we eventually finished our work and went back to our day jobs, we were probably the only ones sad about it.
In many ways, even though this was by most measures the most successful innovation activity I've been involved in within an organization, it was also the most instructive failure. I learned the hard way that when you innovate within a system, you have to understand the environment deeply if the system is going to accept it. You have to bring people along and help them see how change will benefit them. This isn't just company culture, it's human nature. Innovation is change, and today, change fatigue is almost the norm.
So yes, of course, innovate. Please innovate. The success of your organization or region will depend on it. But don't expect it to be easy, and focus excessively on bringing people along with you. You will always be swimming upstream, but your actions will help determine how strong the currents are.
Final Thought: The One Question I'm Always Asked
Now that I'm at BillionMinds, I focus primarily on innovation as a human capability - helping employees and leaders build an innovation skillset through our programs, masterclasses and presentations.
When I'm speaking on the topic, I always get the same question - one you might be thinking yourself as you read through all these challenges.
Is innovation work fun?
And my answer is always the same
It's fun for me
Many people think of innovation as a world of freedom and creativity, and there are definitely elements of that. But actually, mainly, it's a world of challenge and failure, with the occasional success to make things better. The best innovators I know have a Shackleton-like masochistic streak to them. They almost enjoy the failure because they know it's inching them towards success.
So, if that sounds like you, pick innovation as a career. The world is changing a lot, but there is one thing we can be sure of. It will never run out of problems to solve.