From Blueprint to Boardroom Reality
When Derek Bishop, Jo Geraghty, and I wrote Building a Culture of Innovation a decade ago, we deliberately chose practicality over theory. The business world didn’t need another academic treatise on innovation – executives needed an actionable blueprint they could implement Monday morning. This no-nonsense approach resonated across industries, propelling the book to Amazon bestseller status, earning “Management Gold” recognition from the Chartered Management Institute, and has seen it translated into multiple languages.
Yet today, I’m struck by a persistent reality: while 84% of C-suite leaders identify innovation as critical for growth, only 6% express satisfaction with their results. This isn’t a knowledge gap – it’s an execution challenge.
The Innovation Effect: A Critical Distinction
Before diving deeper, let’s establish something essential: innovation is not an activity but an effect. It’s a designation that your customers and market bestow when they experience your offerings as sufficiently valuable, meaningful, or transformative. No internal committee can declare, “We’ve innovated.” That judgment belongs exclusively to those you serve.
The most profound organizations I’ve worked with understand this distinction. They focus not on “doing innovation” but on creating the conditions where ideas of genuine impact can emerge, be refined, and be delivered to the market. This shift in thinking – from innovation as an activity to innovation as an effect – changes how we approach the challenge.
Why Our Original Framework Still Delivers Results
The core principles we established – leadership modelling, psychological safety, cross-functional collaboration, and customer centricity – have not only stood the test of time but have been increasingly validated by research:
· The leadership imperative: Innovation must be led from the top and owned throughout the organization.
· Psychological foundations: Amy Edmondson’s continued research confirms what we argued a decade ago – teams with high psychological safety are 67% more innovative. The data is irrefutable.
· Breaking down silos: Organizations with robust cross-functional collaboration achieve 21% higher profitability. The numbers tell the story.
What distinguishes high-performing innovation-led organizations isn’t simply better processes—it’s the seamless integration of processes with behaviour, mindset, and incentives. Deloitte’s latest research confirms what I’ve witnessed firsthand: “Process-only” innovation programs are 2.7 times more likely to underperform than those addressing culture and leadership behaviours.
The Rise of Innovation Theatre (And Why It Fails)
Too many organizations have fallen prey to what is now called “innovation theatre” – the elaborate staging of innovation activities without the necessary cultural and leadership foundations. They’ve built the labs, run the hackathons, printed the posters, and mastered the jargon – yet the breakthrough results remain elusive.
The sobering reality? 78% of corporate innovation programs fail to deliver expected outcomes.
One executive who recently confided in me said: “We’ve spent millions on our innovation program, but our core business runs exactly as it did five years ago.” This isn’t unusual – it’s an epidemic.
The Psychology You Can’t Ignore
The missing piece in most innovation strategies is a fundamental understanding of human psychology – particularly loss aversion. Our brains feel potential losses approximately twice as intensely as equivalent gains. This isn’t opinion; it’s neuroscience.
When leadership teams punish failed experiments or create environments where career risk accompanies innovative thinking, they activate the primitive brain’s threat response, effectively guaranteeing incremental thinking at best and stagnation at worst.
I’ve observed this dynamic in boardrooms worldwide: executives demand breakthrough innovation Monday morning, then implement governance systems that ensure it cannot possibly emerge. The Corporate Executive Board reports that 60% of employees have withheld innovative ideas for fear of negative consequences.
The implications are clear: no psychological safety, no innovation. Period.
Moving Beyond Innovation Theatre: My Current Focus
Working with executive teams globally has sharpened my thinking beyond the original blueprint. Three critical insights now drive my advisory work:
1. The Power of Differentiated Innovation
The innovation conversation has been needlessly polarized between incremental improvements and radical moonshots. The real competitive battleground – where sustainable growth and cultural transformation happen simultaneously – lies in what I call “differentiated innovation.”
This approach delivers a meaningful competitive advantage without the prohibitive failure rates of purely radical bets. Organizations with balanced innovation portfolios generate 3.5x greater shareholder returns over five years.
Consider this: Apple rarely creates entirely new product categories. Instead, it enters existing markets with differentiated offerings that redefine customer expectations. This isn’t incremental thinking, but neither is it moonshot gambling.
2. The Middle Management Multiplier
The most overlooked leverage point in innovation transformation is the middle management layer. These leaders aren’t the “frozen middle” – they’re the essential “DRIVE” layer that translates executive vision into organizational action.
My ODC Framework delineates three critical roles:
· Executives: OWN the innovation agenda
· Middle Managers: DRIVE implementation and remove barriers
· Frontline: CONTRIBUTE ideas and insights
The data is precise: companies with strong middle management engagement in innovation are 38% more likely to succeed. One financial services client increased their innovation output threefold within 18 months simply by reframing and equipping their middle managers as innovation enablers rather than gatekeepers.
3. Leadership Behaviours That Drive Innovation
Ultimately, an innovation-focused culture isn’t built through structures or processes but through consistent leadership behaviours:
· Model vulnerability: Leaders who acknowledge their own failures reduce team threat responses by 74%. I’ve watched sceptical executives transform team dynamics with simple phrases like “Here’s where I got it wrong” or “I’m not certain – what do you think?”
· Resource allocation speaks louder than words: Bain & Company’s research confirms what I’ve long advocated – dedicating enough resources to experimentation is a non-negotiable hallmark of serious innovators. Anything less is lip service.
· Recognition signals: What gets measured and celebrated becomes cultural DNA. One pharmaceutical executive built a remarkable innovation pipeline by changing the first five minutes of every leadership meeting to recognize learning from failure.
The Next Frontier: From Blueprint to Living System
If I were writing our book today, I would title it Building a Culture FOR Innovation – because this linguistic shift matters profoundly. Innovation isn’t something you have or do; it’s an effect – a label that customers bestow when your solutions create sufficient impact to warrant the designation.
Let me be clear: We don’t get to declare our work “innovative.” Customers only grant us the innovation label when they experience our offerings as profoundly valuable, meaningful, or transformative. As leaders, our job isn’t to “do innovation” but to create the conditions where ideas of genuine impact can emerge and thrive across our organizations.
With this critical distinction in mind, I would double down on the psychological foundations while adding crucial new dimensions:
· Practical tools for counteracting loss aversion – making it easier for leaders to create environments where calculated risk-taking is genuinely safe and rewarded
· A systematic approach to scaling differentiated innovation – moving beyond isolated success stories to organization-wide capability
· Specific frameworks for activating middle managers as innovation multipliers rather than bottlenecks
· Daily leadership practices that reinforce innovation as “how we do things around here” rather than a separate initiative
The future belongs to organizations that move beyond innovation theatre to build living systems where innovation is distributed daily and deeply human. Research proves the potential upside is enormous – 3.4x greater shareholder returns for organizations that get this right.
A Challenge to Executive Teams
As boards and executive teams face unprecedented competition and disruption, creating the conditions for meaningful innovation has never been more urgent. Yet the solution isn’t more innovation programs – it’s deeper innovation leadership and a fundamental reframing of innovation itself.
Remember: Innovation is an effect, not an activity. Your customers and the market decide what’s innovative, not your internal committees or press releases.
Ask yourself three uncomfortable questions:
1. Are you measuring innovation by internal activity metrics or by genuine customer impact?
2. Is your organization allocating dedicated resources to experiments that could earn the innovation label from customers?
3. When was the last time your leadership team publicly recognized learning from failure?
The answers reveal whether you’re building innovation theatre or creating the conditions for real impact.
Building the right culture for innovation isn’t quick or easy, but the alternative is irrelevance. Now is the time to move beyond rhetoric and create the conditions for sustained impact that warrant the innovation label.
Watch this space for the next book!