Does culture still eat strategy for breakfast? That’s the question which I posted in a webinar which I was invited to present by ‘We are lean and agile’, a company whose vision statement is ‘making improvement easier for you.’ Through a mix of coaching and the deployment of Engage Process software they help organisations to develop a culture of continuous improvement; an ethos which fits with my own perspective of innovation and business development as a journey rather than a destination.
So, does culture still eat strategy for breakfast? After all, it has been more than twenty years since the saying was coined and a lot has happened in that time including the recognition of the start of the Fourth Industrial Revolution, the rise in prominence of sustainability, and Covid. We’ve also seen step changes in business approaches such as the American Business Roundtable ditching its ‘shareholder first’ creed in August 2019; replacing it with a commitment to give equal weight to customers, employees, suppliers, communities and shareholders.
So, in the light of all of that, perhaps we should be asking why so many leaders are still eating from the same breakfast menu? Is it through choice, inertia, or a lack of understanding of the alternatives? Well OK, there is no one answer but there are a few common themes which I have encountered in my work with companies across the world.
I’ll start with something that really frustrates me; innovation theatre. Actually, that frustration is part of why I’m still passionate about innovation and working with senior teams to drive innovation, but that doesn’t make it right. Let’s play out the scenario, one which may well be familiar to you, of the presentation of ‘an absolute game-changer’ of a product:
It’s amazing, it’s fantastic, it’s awesome; so much so that our marketing department has used every possible combination of the word innovation to describe how amazing this product is. And we think we’re actually ready to go to market. We’ve done our research. We’ve talked to customers, and we’re ready to go. So now here’s a demonstration of our business model. Look how easy it is. Look how cool it is. Look how awesome it is.
And yet…. When the product is demonstrated to the people who really matter, the customer, they say no!
Why? Time after time I see organizations which continue to create products and services that aren’t sustainable, with brand promises that they don’t stand a chance of delivering against, on products that no one really wants because they’re never really close enough to the customer to really unearth proper wants and needs and issues. They self profess that their products, their services, their experiences are genuinely innovative. But far too often all the organisation is delivering is marketing-driven innovation theatre. Hardly surprising therefore that innovation is still seen by some as a cost that doesn’t deliver.
So we’ve got to start being much more pragmatic and real and down to earth about the language, we use around innovation and also about how we approach innovation and how conscious we are about the level of innovation theatre that actually exists in our organization. And we have to start to align our innovation efforts, not just to headlines and theatre but to the outlook and approach of the entire organisation. That requires a re-visiting of three key areas; strategy, leadership, and culture.
So how does innovation strategy sit within your organisation? Is it integrated within the overall strategy or somewhere off to one side? And is the language used to define that strategy clear and unambiguous or fluffy and vague? Far too often I see organisational definitions of innovation which in actuality either just refer to inventions or are so meaningless (we’re going to do lots of stuff) that there is no hope of defining, measuring or progressing change.
For me, a definition of innovation should be something that isn’t just a statement that people read once but becomes a tool that everyone can use throughout the innovation process. And for that to happen I look at four areas:
- Are we looking at introducing something new or different? Now, that doesn’t mean that it has to be something that has never existed before. We’re not inventing a new element on the periodic table, but it’s got to be a new way of doing things or a different way of doing things.
- Does it solve a genuine problem? We’re not innovating when we create stuff for the sake of creating stuff. And we’re certainly not innovating when we create an artificial demand just to sell a new product. That leads me on to…
- Does it add real value to the customer? And that real value should be more than simply providing a basic solution to the core problem.
- Then and only then can we look at what’s our return on investment? So what growth does it drive for us as the creator or the owner of a provider of that solution? That’s where the value proposition framework can come into play.
Only now, when we have a clear definition of innovation can we look to develop a clear strategy. And that strategy may be quite different from anything previously encountered; certainly different from strategy development as taught in many business schools. It will be human-centred and hypothesis-driven. It will be about starting from the future and making really bold ambitions and choices about where we want our organizations to be and how we want them to operate and then reverse engineering back to today. Most importantly it won’t be static; continually pushing forward to deliver ambitions and resetting goals as capabilities increase.
That takes a new type of leadership: individuals who will not necessarily become the innovators but will become leaders who understand how to own the innovation agenda. Now if we as leaders continue to look at the world as volatile, uncertain, complex and ambiguous, the decisions we make and even the way that we communicate will be coloured by that outlook. Our job as innovation leaders is to transcend beyond that and paint a very different picture about the world, one that is visionary, unbounded, creative, and most of all, authentic; one which inspires people to want to contribute to change.
That inspiration feeds through into the culture of the organisation, infusing people and processes with the abilities and infrastructure to drive innovation. The challenge we face with organizational culture is very often actions don’t match words. When the reward is based on short-term profits or units of work rather than areas such as critical thinking, social influence, emotional intelligence, problem-solving, analysis, creativity and originality then no amount of leadership or strategy will deliver innovative outcomes.
Perhaps that’s why we still see 75% of leaders believing from their perspective that they have the right culture for innovation, but only 37% of employees agreeing. And perhaps that’s why most innovation looks towards incremental or continuous improvement. In other words, focusing on exploiting what the company already does or has, rather than exploring what the company could do or could become. Companies are stuck in the short-term rut and need a shake-up of strategy and innovation leadership before they can move on.
Now let’s be clear; not everyone will be an ‘innovator’, but everyone can contribute to the innovation agenda and we can all contribute as individuals in different ways. Sometimes that might simply require us to continue to do what we do best. At other times we may need to restructure our processes or outlook; for example setting up innovation frameworks which encompass venture boards, targeted budgeting, skills training or resetting attitudes to risk and reward.
One of the learning tools I created a few years ago looked to answer the question: how do we actually lead so innovation can thrive and what do the people in our organization need? The solution which you may want to consider is a simple ODC (own, drive, contribute) framework. It’s based around the principle that leaders should ‘OWN’ the innovation agenda. They don’t necessarily need to be the innovators, but they should absolutely own the innovation agenda. Managers in the middle of the organization and that includes influencers, stakeholders, team leaders, etc. should be enabled to be able to ‘DRIVE’ innovation on a daily basis, bring it alive and make it happen as part of the day-to-day. And then everyone else should then be enabled and able to ‘CONTRIBUTE’ to innovation. Whatever is required, whatever it takes; the only certainty is that stasis is not the answer.
Culture eating strategy for breakfast. Well, that would have worked in a linear world, particularly one which looked to move the business world on from an industrial revolution-based profit only model to one which started to see people as contributors rather than as costs. But times have changed and we now have to respond to new challenges and new potentials. We need to build systems around innovation; where the strategy for innovation, how we lead for innovation and how we build a culture of innovation are all intertwined into one cohesive roadmap for the future. So I would argue it is time for a new breakfast menu; one in which strategy, leadership and culture all sit together; harmonising in order to deliver the whole.
About the author…
Cris Beswick is a serial entrepreneur turned strategic advisor, bestselling author & keynote speaker. Recognised globally as a thought leader on innovation strategy, leadership and culture, he’s helped some of the world’s most ambitious CEOs, companies and governments build innovation strategies, cultures and ecosystems. Cris is also a pioneer in the field of measuring innovation maturity, a Visiting Professor of Innovation at several business schools around the world, co-founder of innovation consulting firm ‘Outcome’, co-founder of the global innovation thought leadership platform ‘The Future Shapers’ and co-author of the bestselling book ‘Building a Culture of Innovation’.