To Better Understand Innovation, Measure The Right Things

by Kaihan Krippendorff, author of “Driving Innovation from Within: A Guide for Internal Entrepreneurs“

After four years of research into innovation success, I have come to firmly believe that most innovation research is measuring the wrong thing… or at least is overlooking a critical unit of measure: the employee.

To better understand how innovation occurs and how it can be sustained, we should be looking at the habits, characteristics, patterns of behavior, tools, and journeys of employee innovators. You will find that the people behind society’s greatest innovations were not entrepreneurs, did not work in organizations particularly supportive of innovative behavior, and were not led by leaders who really asked for innovation.

So, what drives their innovation?

As it turns out, most innovation experts are measuring the wrong things, and putting emphasis on the wrong factors. The path of self-directed, employee-generated innovation has historically been far more prevalent than we previously understood. Indeed, the innovative ideas of employees have done more to shape society than those of entrepreneurs. Yet the employee innovator is often left out of conversations around innovation. How will our understanding of innovation change if we make adjustments to what and how we measure?

Why innovation fails to measure up. 

A macro-study of innovation success shows that 83% of innovation efforts fail. Maybe we get innovation wrong so often because we have been measuring the wrong things.

Scan the most popular innovation research and you will see that experts tend to focus on one of three units of measure:

• Entrepreneurs
• Organizations
• Leaders

Entrepreneurs.

The vast majority of recent innovation research has focused on entrepreneurs: why are they more innovative and agile than larger organizations? We have formalized the entrepreneurial approach into frameworks like “lean start-up” or “design thinking” with the goal of implementing it beyond start-ups.

While an important part of the innovation puzzle, most such efforts fail. Look no further than GE, which soon after broadly injecting “lean start-up” approaches was quickly humbled into a shadow of its former self. Applying lean approaches did not necessarily cause GE to stumble, but it certainly did not solve GE’s problems.

Organizations. 

There is plenty of research using organizations as the unit of measure. If you take a broad scan of this research, you will find that a lot is already known about what elements of culture, organizational structure, incentives, and talent correspond with higher levels of innovation.

What is surprising is how few of the best practices learned from this research are actually known by innovators. The fact that most innovation organizational transformation efforts fail is perhaps a hint that the organization is not the best measure either.

Leaders.

Finally, I am asked regularly to talk about leaders. How can leaders create the context of innovation? What does it mean to be an “agile” leader or a “purpose-driven” leader who can inspire people to act innovatively?

While my research shows that leadership does matter, it is only one part of the equation. Most of society’s big innovations – from the internet and email to DNA sequencing and solar energy – were created within organizations (and not by entrepreneurs) in which leadership did not particularly ask for or encourage innovation.

Conclusion.

What you measure matters. Consider a bridge built in Laufenburg, a town that straddles Germany and Switzerland. As the two halves of the bridge being built came together, it became (embarrassingly) clear that they would not align because they were at different heights.

As it turns out, how you measure sea level varies from one place to another. Britain measures height above sea level in relation to sea levels in Cornwall, and France measures it in relation to the sea level in Marseille. Germany measures height in relation to sea level in the North Sea while Switzerland does so in relation to the Mediterranean Sea.

While visiting Stockholm several years ago, my wife and I visited the Vasa Museum, which pays tribute to one of the most impressive warships that in 1628 sank less than a mile into its maiden voyage.

The cause, again, was in choosing how to measure. Workmen working on one side of the ship were calibrating their measurement in Swedish feet (about 12 inches per foot) and on the other side in Amsterdam feet (about 11 inches per foot). The resulting asymmetry in weight caused the ship to tip over.

If we start measuring innovation using employees as the unit of measure, maybe we can finally build the bridge from ideas to execution. We can finally sail innovations out into the world without them sinking.

 

Kaihan Krippendorff is author of the forthcoming book “Driving Innovation from Within: A Guide for Internal Entrepreneurs“. He is the founder of Outthinker and the Outthinker Strategy Network, a global community of corporate strategy leaders committed to staying ahead of the pace of disruption. He is a professional speaker and the author of “Outthink the Competition: How a New Generation of Strategists Sees Options Others Ignore“, among other business strategy books.

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