Five Common Mistakes in Innovation

Every company knows how to get more innovative, but few are willing to make the cultural changes necessary to get results

There's a growing consensus around what it takes to be truly innovative. Launch some great new products and services. Encourage your people to take risks. Get started on the long, hard work of creating metrics and processes that help employees engage with new ideas. That's what the world's most innovative companies are doing. But just because you know how to do something doesn't mean you will do it.

We all know what kind of exercise and diet it takes to develop rock-hard, six-pack abs. While many of us would like to look lean and muscular, a regimen of constant crunches and low-calorie meals is hard to maintain over the course of years. Innovation works the same way. Everybody knows how to get more innovative, but they are rarely willing to undertake the kinds of cultural changes necessary to yield significant results. Without more actionable advice, too many companies proceed to make the same mistakes when trying to spark innovation.

• Over-reliance on pilot initiatives

"We'll be more innovative if we do more brainstorming sessions."

In an attempt to take action quickly, some companies initiate projects that focus on a single product idea or a promising near-term opportunity. Alternatively, they latch on to a single technique, such as ethnographies or brainstorming. Yet, for most companies, the scale of impact required is too massive to depend on a single approach.

Recognizing this, successful companies such as Procter & Gamble (PG) are taking a portfolio approach to innovation, working with multiple consultants and using multiple methods so the process of innovation becomes a series of multiple experiments. They then come away with a better understanding of not only which methods and partners work, but which ones work best with their existing organizational culture.

• Unhealthy fascination with unique charismatic examples

"Steve Jobs is so cool: We need to be more like him."

It's difficult to have a discussion on innovation without invoking the names of charismatic visionaries such as Steve Jobs or Richard Branson. Apple (AAPL) and Virgin, along with Nike (NKE), Starbucks (SBUX), and other media darlings, certainly make for great storytelling. Unfortunately, they also serve as lousy models for the rest of us.

Enticing as they are, such cases too often depend on a kind of business leader who is, for better or worse, nonexistent in most companies. If you work for Steve Jobs, innovation seems like second nature. If you don't, the only useful lesson seems to be to quit your job and go work for Apple.

• Misapplication of other companies' approaches

"P&G is using a 'Connect and Develop' strategy, so we should, too."

It can be more enlightening but equally dangerous to emulate the approaches of other companies. Of late, P&G has received much attention for its "Connect and Develop" strategy, whereby the company reaches out to promising entrepreneurs, scientists, and consumers in the hopes of mainstreaming the ideas they present. IBM (IBM) has received similar praise for its experiments with "Open Innovation." Such strategies are far more useful than those that rely on charismatic individuals.

At the same time, these approaches work because they're tailored to the conditions of the companies in question.

"Connect and Develop" is a wonderful strategy for P&G, because of who it is, the categories it plays in, and the structural systems and DNA of the company. Just because something is good for P&G doesn't mean it will be good for the rest of us. The mechanical application of inappropriate methods has led to the failure of more than one innovation program.

• Descent into a cycle of self-recrimination

"Our people just aren't creative enough."

Looking to external sources of inspiration can sometimes have further unintended consequences if the firm decides it can never measure up to the level of external case studies. It's not unusual for innovation planning teams to benchmark other companies only to come away feeling that their own problems are insurmountable. As it turns out, they may be looking in the wrong place.

Companies such as 3M (MMM) are instead returning to what has made them great in the past. It's a generalized form of what organizational-change experts call Appreciative Inquiry: Search inside yourself for moments of greatness, determine which activities spurred these moments of greatness, and then figure out how to do more of that. Virtually no companies in the Fortune 500 got where they are by accident. Savvy leaders capitalize on their organizations' strengths and capabilities to create sustainable approaches to growth appropriate to their inherent cultures.

• Resignation to superficial changes

"Let's just paint the walls purple."

Perhaps most depressing of all are the companies that turn away from significant structural improvement in favor of cosmetic changes. After benchmarking several Silicon Valley companies, one firm noticed that many companies it admired had yellow and purple walls. The team went back and painted the walls of their offices yellow and purple, thinking this might actually make them more innovative. While color can influence behavior, and there's something important to be said about the effect of environment on creativity, such initiatives alone usually aren't enough to actually change the DNA of the organization.

Changing the Game

A few years into the business fad of innovation, the conversation around the space is changing. Some companies, such as General Electric (GE), played around with quick hits, harvested the low-hanging fruit in front of them, and moved on to the next thing. Other companies, such as Ford (F), have draped themselves in innovation terminology only to keep on doing business the way they always have.

The companies that are realizing the biggest bang for their innovation buck, however, aren't on the front page anymore. While out of the public eye, companies such as Hewlett-Packard (HPQ) have been digging deep and doing the long, hard work of transforming into innovation leaders for the long term. They can see the script for innovation isn't a mystery. It just takes a long time and a lot of change to pull off. That's why right now we're discovering just who has game and who just wants to claim the title of innovation to look good.

Before it's here, it's on the Bloomberg Terminal.