How the Ivy League Is Killing Innovation

We are seeing an alarming trend. The wrong people are making millions on innovation—teaching innovation that is.

It isn't sour grapes on our part. We don't teach innovation. It's just frustration. No one disputes the irony: Professors, who have chosen a safe, pragmatic, low-risk occupation and tenured career, are teaching companies how to innovate, a skill that almost always rewards the best risk takers.

What's going on here? Well, you probably can chalk it up to the law of attraction. Process-driven cultures love process-driven experts. Organizations, just like people, do what makes them feel strong, and nothing makes mature, process-driven companies feel stronger than having a template for doing anything (even if having a completely buttoned-down-ain't-no-exceptions-allowed template for innovation seems oxymoronic on its face). Need innovation? Simply call in a PhD with a bow tie and trademarked process and watch your innovation portfolio grow. Right? Nope.

Although the temptation is understandable, this road is usually the wrong path for large, set-in-their ways companies to take. Process is usually about mitigating risk, and let's face it, these companies already qualify as risk averse and need to learn how to take more chances. They must understand how to fail forward, not hedge their bets. So by layering on additional processes they can master to make them more innovative, businesses are actually making themselves less and less innovative by mastering more and more process.

Messiness and Quick Failures

Don't get us wrong here. As we have written before, we agree that you must have a proven, tested framework governing how you handle innovation. But we also coach people to accommodate, even encourage, the fast-failures and messiness that ironically make great ideas happen most efficiently.

What big, process-driven companies need is to learn how to think like entrepreneurs. And it may surprise you that entrepreneurs hate risk, too. Unlike many professors, entrepreneurs feel comfortable not knowing what comes next, but they don't see this as risk. They view putting all their eggs in one job basket as dangerous, so they choose to work for themselves. And you can see their aversion to risk in other areas as well. For example, they have learned how to fail quickly with little financial risk. That's partly because they are impatient, partly because they don't have deep pockets, and partly because they love experimentation so much they want to get the cost of experimenting to a minimum in order to do as much of it as possible.

So, instead of writing a six-figure check to go over a decade-old case study with a professor, who of course did not put his house on the line to back a big idea he had (like teaching innovation), what specifically should large companies learn from entrepreneurs? Let us suggest three things when it comes to innovation.

1. Get to beta quickly. Constant experimentation is the key to innovation success. Get the product out there. Learn from the market reaction. Adjust as necessary. As we wrote about before, you may look at your innovation team and notice that nothing revolutionary is hitting the market. If so, chances are they feel afraid of failing. After all, if nothing is launched, nothing can fail, and therefore they can't be blamed. From a personal survival point of view, within a corporation it is better to kill an idea than to launch it. Likely they are hiding behind the academic process that is supposed to fix the problems. You must demand small, controlled launches that allow your teams to learn, build courage, and taste success. Yes, processes to fix this exist. But let's face it, fear is most often a cultural challenge. So the next time someone fails spectacularly, ask him what he learned, give him a bonus, and get him back on the innovation horse. You'll get to market faster with bigger ideas.

2. Acquire mojo. Experimentation, growth, quick launches, and adjusting on the fly are all part of a small company's DNA—and invariably absent within large organizations. Why not acknowledge that fact? Acquire a small firm. Give it the resources to grow and stay out of its way. (Seriously, stay away. There is a virus living within large companies that kills rapid initiatives, so you want to keep your acquisition isolated.) The arrangement seems to have worked for Kashi and Kellogg (K). Why not see if it will work for you?

3. Ideas from anywhere. We understand the appeal of hiring Ivy League professors. Credentials can look impressive. But Henry Ford, Walt Disney, and John D. Rockefeller never went to college. Neither did David Oreck or Richard Branson. And you'll find the list of people who went for only one semester—Steve Jobs and Barry Diller among them—equally impressive. Heck, there is a website devoted to billionaires who never finished school (and yes, you'll find Bill Gates and Michael Dell on it). While "ideas from anywhere" and "fail quickly" might not make great headlines for an MBA case study, they certainly reflect the real-world realities of the most innovative companies.

We are not bashing academics. In fact, next time we are going to talk about what entrepreneurs can learn from them. But we will say this. You've heard the cliché, "those that can't do, teach." It's a cliché for a reason. Here's a build: Those who can't innovate spend too much time with teachers.