Self-disruption has become a natural state of affairs for organizations big and small. Starbucks has been rethinking its store concept especially overseas. AVIS is testing a “portfolio of bets” to adapt to radical change in the car rental market before that change disrupts AVIS. Coca-Cola is looking to “be more innovative and avoid complacency.” As Coca-Cola CEO James Quincey said, “We’ve got to try things. Not all of them will work. We don’t need to get too upset when we have failures. We need to learn, move on, and reinvent.”
If you Google the term self-disruption, you’ll uncover countless more stories like these and CEOs such as James Quincey driving a change agenda. Think about that. Companies are under so much pressure to evolve constantly that they need to have a game plan to change constantly from within before someone or something else kills them.
Perhaps you and your organization are in a similar situation. Before you and your teams embark on your innovation journey, it’s imperative that you have the foundations for success accounted for. It’s one thing to discover areas of opportunity but entirely another to have the capacity to bring those opportunities to life and provide real, tangible value to your customers and the company itself.
I believe that any organization that wants to harness the full potential of innovation needs to build its change agenda on three pillars:
1) Metered Funding (or Innovation Accounting)
The new era of product funding is upon us. A recently published Harvard Business Review article, “The Mindset Your Company Needs to Grow Organically,” highlight the need for leadership to take a more “venture capitalist” view of their budget’s responsibility and focus. An organization’s leadership should navigate away from “How much of a return can we expect after the conclusion of this project?” to “What can we expect to learn and discover from this iteration, and how might we activate those lessons into our portfolio of products?” Similar to how a savvy venture capitalist would manage her portfolio of investments – choosing to continue funding her more promising firms and decreasing funding for those that underperform – leadership should manage its own suite of initiatives. Funding needs to be fluid and iterative akin to the same repeatable cadence as the discovery teams who work in short, measured bursts.
I’ve seen great initiatives stall and lose valuable momentum due to slow, antiquated methods of funding. Too often, teams work towards a deadline when the funding is scheduled to stop and rush to deliver a smorgasbord of features in hopes that a majority of the outputs resonates with their audience. Then, they measure their success and hope to get additional funding for the next release. This process is painfully inadequate in today’s modern digital landscape.
Instead, organizations must allow the teams to prove and realize value in a rapid, iterative manner. Doing so is facilitated by an equally nimble funding process.
2) Culture of Learning
Iterative learning and growth require a culture that facilitates and incentivizes learning. Priority should be placed on constantly validating hypothesis to uncover new opportunities. Sometimes a hypothesis that may have proved false in one iteration may prove true in another. Therefore, it is very important to reevaluate all aspects of the product ecosystem routinely.
An organization must be prepared to discover and onboard new insights and have mechanisms in place to synthesize and disseminate the information to all impacted members. This approach is enabled by the careful coordination of people, process, and products employed by the company.
3) Rapid Deployment and Validation
Insights and discoveries need to be activated in a timely manner. Teams should take full advantage of the delivery methods afforded them to quickly ship lovable experiences to their audience. Organizations must empower teams to not only deliver mission critical features and products but also to measure against the anticipated impact with the customers straight away. This approach allows for prompt and critical evaluation of the experience to inform the next iteration of the innovation cycle.
I have noticed companies focusing hard in this area of innovation yet remain challenged in realizing success. While organizations do an excellent job of executing quickly, many have not readied themselves in validating their findings in a meaningful and efficient manner.
Innovation in today’s hyper fast business environment demands a dedicated ecosystem designed to activate crucial insights in quick succession. Teams big and small should take stock of their innovation environment and take proactive steps to ensure their readiness for success.