The Idea

Imagine you are a CEO and see the need for your enterprise to become more innovative. You might hire some innovation consultants or spend look yourself to find the latest approaches (they’ll be in your competitors’ shareholder reports, or latest management books…). You’ll settle on a plan of action. Get your best team on the case. Then see your innovation output skyrocket.

And more importantly, revenue will jump, costs will reduce, you’ll attract new customer segments, and you’re company’s eco-credentials and other goals ou were trying to achieve will shine strong. You’re happy; your team is happy; all shareholders are happy. It’s only a matter of time before CEO of the year award is heading your way!

But in reality, you’re likely joining 94% of executives who are unhappy with innovation performance. And scratching your head as to why. Sure, the innovation team seems happy. And there’s a buzz in the company. Not least you have some great points for your shareholder report. But your innovation efforts are not really moving any needles.

The sad truth is, you’re probably performing what Steve Blank has called innovation theater.

What is Innovation theater?

What is innovation theatre? It is:

Performing innovation activities that ultimately deliver few, or no, tangible results.

Steve Blank (2019) “Why Companies Do ‘Innovation Theater’ Instead of Actual Innovation”

Innovation consultants tell us that the next big idea is hiding in our employees, customers and elsewhere. We just need to perform innovation activities and have the management processes in place to find and commercialise it.

And there are few things more exciting in an enterprise than running and participating in innovation activities. They give impressions of team building and comings together. Of progress and building the future. We create a buzz, stick up posters, gather together. Senior execs are mobilised. Shareholders are excited. There is undoubtedly, and probably necessarily, an air of marketing, production and performance.

But it is challenging to find research that shows the real results of our innovation actions. We do know that 96% of executives are unhappy with innovation performance. So we can infer that we are not getting the tangible results advertised. Chesbrough, a thought leader on open innovation, has recently noted:

To get valuable results from innovation, businesses must … finish more of what they start.

Many of the best known aspects of open innovation … are often not well connected to the rest of the organization

Chesbrough, H. (2020) “Open Innovation Results: Going Beyond the Hype and Getting Down to Business“

Ultimately, we innovate to get a customer (according to Drucker). “Innovate or die” as he says.

So there is a real danger to the survivability and growth of our enterprises if our innovation activities are delivering few, or no, tangible results!

Performing innovation theater

We rarely set out to perform innovation theater. Although perhaps some of the interesting titles we give people – chief disruption officer, head of new ideas, etc – are a little theatric.

Often we set out to emulate start-ups or to try and harness the knowledge of the crowd (our employees or customers). With a view to gathering ideas and managing them towards innovations that move some needles – revenue, costs, customers, eco-credentials, or other important aspects to us.

Examples of innovation actions and theater

Here’s some examples of innovation actions and potential theater:

• Call to action / Ideal challenges – These come in a variety of forms. Each, Sofia Lindblom puts as: “regardless of the name the overall setup is often the same: to generate and explore ideas during a fixed time period”.
  • The theater: ideas rarely get implemented.
• Hackathons – An enterprise invites a group of people to spend a fixed period of time to build minimal viable products.
  • The theater: ideas not aligned with enterprise vision or ambition.
• Innovation Retreats / Workshops – Nice time away from the office to ideate.
  • The theater: nice time away from the office.
• Open Ideation – Asking entities outside the enterprise for ideas.
  • The theater: ideas not aligned with enterprise vision
• Innovation lab – A dedicated team set up to innovate.
  • The theater: Doblin’s Larry Kelly has noted “More than 95% of the time when your team is stuck in a room and told “ok, innovate now”, the problem statement you’ve been given is wrong”.
• Innovation room – A cool place for holding meetings.
  • The theater: its a nice room, a good pr exercise, but limited evidence they help create ideas an enterprise can execute.
• Silicon valley outpost – posting senior execs to an office within a start-up community so ideas and process can migrate into the enterprise.
  • The theater: enterprises focus on efficiency, not start-up approaches. Doblin’s Larry Kell on these outposts: “I think it’s mostly a palliative“
• Being an accelerator/incubator – investing (money and/or time) in start-ups to subsume them at the right moment into your enterprise
  • The theater: how successful will it be merging a start-up culture into your enterprise focus on efficiency?
• Appointing a chief innovation officer – .
  • The theater: innovation is now someone elses problem in the enterprise (yes, this one comes with personal experience!)

Why do we end up with theater?

Our innovation activities turn to theater for two reasons:

1. Innovation means change and resistance is strong
2. Our activities actually increase the natural resistance to change

Let’s look at these in more detail.

Innovation means change – resistance is strong

The underlying reason that our innovation activities become acts of theater is that innovation means change. And our enterprises are typically geared up to maximise efficiency. Which means the default enterprise behaviour is one of minimising/resisting change that is not efficiency orientated.

Innovation = change. If your enterprise can not handle – or worse, resists – those changes then your innovation activities are simply innovation theater. Share on X

If we can’t make the changes our innovations require, then our innovation activities are destined to remain acts of theater.

This gives an insight into why small process innovations are often more successful at being implemented than, say, radical innovation. For example the Japanese concept of Kaizen (continuous improvement) is a well established concept that you may not have considered as an innovation activity. But using it we introduce new and improved processes.

To address this challenge, we need to make our enterprises innovation-first enterprises. Ones that thrive on change rather than resist. And we need to enable those innovating to make changes required by innovations. This brings us to an observation on the way we do innovation in enterprises.

Bolting on Innovation

We have a tendency to see innovation as a bolt-on activity. Likely as most innovation theory comes from studying goods, where Research & Development facilities are common. And by placing innovation outside normal business operations we make it ineffectual at making the changes needed to execute innovations.

We need to run our organisation with innovation as a core function. Not as a bolt-on.

More specifically, we need to get back to Drucker’s observation that our enterprises have only two functions: marketing and innovation.

A company only exists to get a customer. As such, a company has two, and only two, functions: marketing and innovation

Drucker (1969) The Practice of Management

And this is only possible by fundamentally changing the operating system of our enterprises to be innovation-first. Rather than bolting-on innovation as an extra.

Researchers talk about enterprises having to become ambidextrous organisations – able to deal with today and tomorrow at the same time.

To compete, companies must continually pursue many types of innovation—incremental, architectural, and discontinuous—aimed at existing and new customers.

Charles A. O’Reilly III and Michael L. Tushman “The Ambidextrous Organization“

But we also need to make sure our innovation activities are identifying changes that make sense for the enterprise.

Our activities can encourage greater resistance

I also find that beyond the structural issue of change resistance above, we can encourage greater resistance through how and what we try and innovate. We can:

• Misalign the activities with the enterprise’s ambition
• Look for ideas rather than the big problems
• Expect too much from the activity
• Don’t close the language gap
• Don’t understand the complexity of execution of an innovation

Misaligning innovation activity ambition and enterprise innovation ambition

Let’s find the next big thing – challenge the status quo, shake things up

A fictive, but I’m sure you recognise, CEO / CInO

Every enterprise has an innovative ambition.

We need to enable our enterprises to execute that ambition level. And that starts with the CEO setting and communicating that ambition. And then they must crucially enable the enterprise to execute. Or in large enterprises this may be done at the appropriate unit level.

If we don’t, then we risk generating ideas whose level of change is to great for the enterprise. And we have just increased resistance to change.

A potential solution is to harness McKinsey’s 3 horizon model and organise your enterprise to deliver against that. This might mean horizon 3 innovations are addressed by a separate organisation. Or you make your organisation ambidextrous; or there might be a another way.

Looking for ideas rather than the big problems to solve.

What would you prefer: many ideas or a few big problems to solve? Our early attempts at innovation will probably fall into the trap of preferring a great number of ideas. After all, it’s empowering and morale-boosting to have hundreds of ideas in response to your innovation action. And somewhat disappointing to have only a handful.

Yet, we are better off taking some time to refine the problems we are trying to solve. Satell puts it well in his article “Don’t look for a Great Idea, look for a good problem“:

“In researching my book, Mapping Innovation, I found that the most innovative firms aren’t necessarily any more creative or even better at solving problems than most. Rather, what set them apart was how they aggressively sought out new problems to solve.”

Don’t look for a Great Idea, look for a good problem – G. Satell

We can link this with classic change theory. And that tells us that to drive change, we need to communicate a compelling problem. Without that, the enterprise change required to implement an innovation is harder to achieve.

One way to close this gap is to rethink what value is – progress sought, offered and achieved. Where we can then see innovation as finding and offering ways to better help beneficiaries make progress.

So, identify those big jobs to be done, the problems to be solved, or hindrances to overcome. And seek the value propositions to help. Then explaining the change required is closer aligned to enterprise mission.

Expecting too much

This might be a shock, given the common push for internal innovation calls to action. But, The Global Innovation Report 2019 identified the following:

The consensus view from our discussions [with 100 corporate innovation executives at leading organizations] is that while internally-sourced ideas do have merit, product innovation is more likely to come from customer insights than from employee opinions

The Innovation Trends Report 2019

Nearly all innovation consultants will suggest running internal call to actions. It’s an easy option. And often they have a tool of choice to push.

But you need to think what innovations (well, better put, ideas) are you trying to discover. This research suggests that for improving the progress you are offering your beneficiary, you are better off asking external to your enterprise.

Now, this doesn’t mean internal innovation actions will not discover anything. Rather just don’t be too surprised if it is less likely to drive revenue growth. You may be better off focussing internal innovation actions towards cost effeciencies.

However, like all innovation advice, you need to really understand your internal set-up. If your enterprise structure is heavy on front-line people – those that live with the progress your beneficiaries’ are trying to make daily – then the insights you receive are likely to be more relevant.

Not closing the language gap

Ideators and business often speak different language. Or risk talking past each other. And in doing so, both parties get frustrated, lose faith and eventually innovation dies.

Modern ideation tools try and fix this by involving business early in the process and socialising ideas.

But I find that is never really enough.

I have, however, found using the using the lean canvas iteratively is a surprisingly simple and empowering tool for ideators. As well as being readily understood in the business. I’ve used it many times with great success.

Not understanding execution complexity

Finally, we can note that a sure fire way of increasing resistance to change is through not appreciating the impact of those changes. Or put another way, the complexity of executing an innovation within a particular enterprise.

You really need a way of first understanding that complexity. And secondly, being able to engineer that complexity down. Which might be through implementing enabling changes first. Or through increasing particular competence in the enterprise. Or compromising on the changes required for the innovation.

I think we can harness something called the den Hertog model of service innovation to both understand innovation execution complexity and to find actions to reduce the complexity.

Wrapping Up

The key to avoiding innovation theater – innovation activities that lead to few, or no, tangible results – is to understand two things.

First, innovation means change. Secondly, we have set up our enterprises to drive efficiency. And so their default action is to resist change that is not efficiency oriented.

So we must rethink how our enterprises operate so they become innovation-first rather than efficiency first. Which also means rethinking how we run innovation within enterprises so they can enact changes in a simpler way.

Additionally, our innovation activities need to minimise increasing change resistance. Through aligning with ambition (or CEOs enabling a new ambition), looking for the big problems to solve rather than getting as many ideas as possible. And that those problems are aligned with the right beneficiary. We also need to close the language gap between ideators and the business so that changes are more clear. And finally, we need a way to understand and engineer down innovation execution complexity.

As a final comment,it’s always interesting to learn more about the origins of the term innovation theater. And this is an interesting video where Steve Blank discusses how he identified innovation theater and his thoughts on how to minimise.