Leading Innovation – joyfully playing with and co-creating out of uncertainty

Almost every place I ever worked at would have loved to be known for being constantly innovative. And very few of them actually managed to figure out the setups, contexts, behaviors, resources and focus to execute on this.

With the years of watching organizations fail to sufficiently start to build innovation into their DNA, I noticed a few patterns around this. Some of the systemic issues I observed are:

• There is a desire for innovation, but no real resources are invested
• Team members think they know better than their customers
• Teams don’t actually know much about discovery work and struggle to put discovery work into their goals
• Management does not understand that leading innovation is very different from leading their core business
• The best ways to set up innovative teams function very differently from hierarchical power structures

So how does this manifest in teams and organizations and what would be needed instead?

Funding and staffing innovation appropriately

If you want to continuously stay innovative, experiment, learn, iterate and build new solutions, you have to focus time, people, tools and skills to the task. And you have to do so without knowing how exactly the outcomes will look like. This means investing either a continuous portion of each team’s time on innovation (20% is probably a good ballpark), and/or having a dedicated unit or function specifically focused on developing new solutions for your business, organization or cause. You will probably need help from people who know how to lead a Design Sprint, you’ll need access to your target audiences for research and testing (which may mean significant lead time and cost to acquire in a B2B context), and you’ll need people able to listen, code and synthesize their research findings into something that lets them come up with hypothesis statements, that they can build a rapid prototype against. In essence you need people with discovery skillsets, you’ll want a diverse set of people on the team to include many different perspectives and backgrounds into their solution design, and you’ll need to make this an ongoing practice. Else you run the risk to execute a Design Sprint or Hackathon and never turn the results into a product that makes it to production. Every time you do this, you’ll lose a portion of the enthusiasm of your team for participating. Especially if their great ideas never find a team that will execute on them. Doing this kind of work successfully and continuously needs people who can understand and bridge your purpose and business strategy with discovery and innovation techniques. This is not typically something you can give to your intern and hope for the best.

Team members think they know better than their customers

This is something I have seen many times and it continues to baffle me. I have seen so many smart people come up with ideas without ever speaking to the humans they think should use their product. I have seen product managers who never make time to speak to their customers, sales teams who shield their product or engineering teams from their clients, engineers who simply want to play with a new technology (without ever thinking of the usability of their solutions), etc… And yes, there is one of those little paradoxes here: Sometimes playing with a new technology will lead to an innovative new solution, but you’ll only be able to turn it into a successful product, when you also find a way to map this to a real customer problem. This is why I’m a huge fan of bringing people from different parts of the organization together to work on new ideas in a Design Sprint or Hackathon. User researchers, Customer Care and Sales people know how to uncover and understand the real problems and jobs to be done of their target audience, while engineers, designers and product people are really good at building viable solutions for those needs. For this to work people from different professional backgrounds have to drop their “us vs. them” mentality and collaborate and co-create in service of their customer.

Teams don’t know about discovery techniques and skills and struggle to put discovery work in their goals

I have seen many teams who are quite good at maintaining and building small additional features to their existing product, while knowing very little and having almost no experience with systematic discovery work. With systematic discovery work I mean: How to align a discovery team’s focus with the purpose of the organization, how to plan for and execute user research, how to pick fitting research techniques, how to run a Design Sprint, how to recruit research participants, how to build rapid prototypes rather than full blown software solutions, how to build iterative prototypes, etc…. Often times the goal structures of an existing organization will reward incremental improvements of an existing product over spending time on uncertain, unknown new solutions. Which means there is even less incentive for teams to invest into and develop their skillset in discovery work. It takes strategic thinking to pick potential new target audiences who are matching your organizations larger purpose. It takes interview and research skills to uncover, document and then develop hypotheses of unmet needs in your target audience. It takes design skills to come up with rapid prototypes, more research skills to test these prototypes with your target audience, business skills to judge viability, plus engineering and operational skills to judge feasibility. All of this requires collaboration and co-creation in truly multidisciplinary teams of people who each know about how to best contribute their skillset to an ongoing discovery process. This requires that each team member understands the purpose and strengths of their role AND the other roles in their discovery team. And the team being able to work together as true partners with each other and their potential clients in this process. Putting this kind of work in OKR language can be challenging, which is yet another reason why it often does not get prioritized in teams.

Management does not understand that leading innovation is very different from leading the organizations core business

This is another really interesting paradox. A lot of leaders have learnt great skills that work for running an existing business with an existing product, existing KPIs, existing sales teams and an operative process that has led to growth in the past. So it seems to make sense to approach this topic of innovation with the successful ways to lead an existing business. Except that it does not usually work. You can have a product vision for an existing product, but how do you phrase one for something that does not yet exist? You have existing metrics you can look to optimize with an existing product or service, but how do you make something measurable that does does not yet exist and you know nothing about it’s future success metrics? You might think of a lagging indicator such as revenue, but how do you set a revenue goal for something you don’t yet have a pricing strategy for because you don’t know what it will actually look like? Maybe so far you sold things by the unit, but the new product will be subscription based? Leading innovation is like sailing in the fog, you typically have high levels of uncertainty, you typically have high failure rates (that you can and must learn from as fast as possible), you typically can’t describe a clear roadmap, you can’t say when and exactly how the new thing will start turning into revenue for the organization. Usually you also don’t have one smart person (in the form of a leader) who has more answers than the rest of the people on the team. So it takes a completely different style of working, experimenting, learning, co-creating, iterating and direction setting compared to other parts of the organization. And that can feel deeply uncomfortable for senior managers who are used to a bit more certainty and control. It requires them to trust their team anyway, let go of control, be generous in their support of the unknown and helpful and collaborative without the transactional nature of interacting they might be used to from successfully working with other parts of the business. So how can this actually work?

The best ways to set up innovative teams function very differently from hierarchical power structures

I believe there are a few key ingredients to setting up truly innovative teams. A lot of them take courage, all of them take a genuine level of care and appreciation for the people on the team. These tools, processes, traits and behaviors map with a lot of leadership skills of any high performing team, but they have a few twists to them that make them different from leading your business as usual operations:

• You ideally staff the team with people who know about discovery work (or you get them coaching and training to learn – which will work as well, but take longer)
• You lead with purpose rather than concrete vision or mission statements (as you don’t yet know how exactly that new solution will look, you only know that it should help your organization get closer to its stated purpose). If your organization does not have a clear purpose, you’ll need to start with creating that. Getting your “why” clear not only has a lot of benefits for your existing business, it serves as that north star of direction setting for your innovation activities.
• You create a genuine way for everyone on your discovery team to have an equal voice AND the respect to trust the specific skillsets of the other roles on the team. This means e.g. that everyone gets to ask questions, but people with specific skills may have more of a say in something like judging technical feasibility or picking the right user research technique. No single person can lead that team into the future while everyone else follows, instead as a leader you have to co-create the future with the team. This requires skills in power sharing rather than hierarchical power over structures (which are often the norm in long standing businesses).
• You intentionally foster and build psychological safety, a learning culture (which requires a good failure culture), trust, equality, diversity, inclusivity, playfulness, a healthy way to work with data, ethics and care into your team (this is a massive leadership skills ask and requires at least one person in the team capable and willing to coach the team in this regard).
• You also build the skills for creative abrasion into your team. This means you find ways to amplify diversity, are ok with and welcome constructive (respectful!) conflict, know how to deal with diversity of thought and embrace differences. Something you typically don’t emphasize as much when executing on your core business. This requires excellent interpersonal and communication skills in the team.
• You appropriately fund and staff the innovation process and then step away to let the teams experiment, learn, co-create and apply their skills. You need to trust them without knowing what exactly you will see as a result. Obviously a senior management team deserves regular updates, they get to ask questions and can provide insights or contacts for the team.
• Overall the job of senior management is to support and be clear on the “why”, while having no real control over the timing and concrete shape of the solutions the teams will find. You’ll typically want research, product, engineering, strategy and business skills in the team. You accept, expect and know that there will be more failures than successes, but this is how the team learns and finds their path to new solutions that do not yet exist.
• When leading innovation you must be able to and be ok with feeling uncomfortable and being placed in a context of high uncertainty and complexity. You can’t give your team easy answers on next steps, you know as much and as little as any one of them what experiment will succeed. You will deal with a lot of failure until you get things right, the chances of your ideas working out are no better or worse than the ideas of anyone else in the team. Your experience is both an asset to the team and sometimes an obstacle (as you might be stuck in ways of thinking that are not leading to the best possible solution). Somehow you must both be a leader for the team and find ways to co-create in a fashion that makes everyone in the team truly equal in the process. This requires leading with lots of vulnerability, humility, emotional agility, curiosity, playfulness and joy. Something you need to intentionally practice and create, first for yourself and then with a team. It’s beautiful when it works and really hard to do in a context of uncertainty. Having a coach work with you and the team will be a tremendous help on the way to getting there.

Photo by Neil Thomas on Unsplash

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