Why You’re Struggling with Innovation. And How to Get Better.

And Why Good Managers are Actually the Problem.

The Least Innovative System Imaginable

“If you always do what you always did, you will always get what you always got.” — Albert Einstein

Imagine trying to design a system that prevented innovation. Your goal is to structure a company in a way that will actively discourage people from innovating. What would it include?

“Recent years have shown a growing preoccupation with the circumstances surrounding the creative act and a search for the ingredients that promote creativity. This preoccupation in itself suggests that we are in a special kind of trouble — and indeed we are.”

But why? Why do so many companies want to create innovative cultures yet somehow end up creating the polar opposite?

Customers (and Hence Managers) Don’t Want Innovation

Good managers stay close to their customers. They know that if they’re to consistently support the company’s bottom line, they need to be attuned to customer needs and desires.

“If I had asked people what they wanted, they would have said faster horses.”

With a typical management structure, it makes it nearly impossible to justify diverting resources from known customer needs and desires to unproven markets and questionable investments. The systems and processes that keep the business running are specifically designed to identify and cut those initiatives that do not align to the customer’s current needs.

“Some people say, ‘Give the customers what they want.’ But that’s not my approach. Our job is to figure out what they’re going to want before they do.”

And to do that, you need to separate this out from the traditional mainstream business.

The Chance for a Billion Dollar Return

Choice A: You can give a million dollars, bottom line, to your company through your efforts this year, guaranteed.

“Problem solving, however necessary, does not produce results. It prevents damage. Exploiting opportunities produces results.”

Sergey Brin recognized this concern at Google and developed a 70/20/10 responsibility model. Seventy percent of time was reserved for daily operations and taking care of the current business. Twenty percent went towards the next level of advancements. And the final ten percent went towards major innovations and moonshots.

“You can systematize innovation even if you can’t completely predict it.”

Separate Your Moonshots from the Main Business

“Leaders who order their employees to be more innovative without first investing in organizational fitness are like casual joggers who order their bodies to run a marathon. It won’t happen, and the experience is likely to cause a great deal of pain.” — Safi Bahcall, Loonshots: How to Nurture Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries

Yet in many companies, simply prescribing a breakdown isn’t enough. Existing management practices and systems are too ingrained in the culture. Stability and near-term returns will always override the long-term investment needed to encourage major innovation.

“If you push them — if you give them the freedom and the expectation to be weird, that’s moonshot thinking.”

Success Comes from Feedback Loops

“If you look at history, innovation doesn’t come just from giving people incentives; it comes from creating environments where their ideas can connect.” — Steven Berlin Johnson

In a conversation with Shane Parrish, former Y Combinator partner and the founder of Pioneer, Daniel Gross, describes the key to success as positive feedback loops. Our surrounding environments create feedback loops that either reinforce or discourage critical behaviors — which initiate chain reactions of either positive, or negative, behaviors.

“Environment counts for a great deal. A man’s particular idea may have no chance for growth or encouragement in his community. Real success is denied that man, until he finds a proper environment.”

For innovation to be a success, it needs an environment of positive feedback loops — one that traditional management practices and business models are ill-equipped to support. The inertia towards supporting today’s needs and demands is too great to maintain enough focus on long-term innovation.

Enemy of the Status Quo.

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