Massimo Garbuio and Moritz Dressel

All you need to know to start and speed up an innovation journey.

If you follow a strict innovation process, you may end up changing it every time the latest management trend takes hold. We give you 6 Building Blocks that have stood the test of time. They are the result of the years of experience of the innovators we interviewed and act as catalysts for innovation. They have been tested in different industries, in different parts of the world, by people with very different functional backgrounds and at different stages in their careers. They can be applied to any innovation context.

Innovation process: yes, but….

The idea of a magic formula, a straightforward equation in which “x + y = innovation,” is attractive. We often think about innovation as a process comprised of a finite number of steps that, if followed one by one, will inevitably lead to the “Aha!” moment. It will seem like you have reached the end of your innovation journey and you can sit back and reap the rewards. A process is also attractive for educators, as its linear nature suggests you can teach the various steps and provides the illusion that some magic will happen at the end.

Having a process is great for ensuring consistency in output over time, across teams, and even across countries. The quality of the Coca-Cola you drink in the US is the same as the one you drink in Germany or Australia. The quality of the customer service at an Apple Store is consistent around the world. Processes work for organizations, whether it is the idea of following strict routines for daily procedures or sticking to company guidelines when pursuing new projects. The idea behind them is simple: to mitigate risks.^[1]

But does this work for innovation? Do you follow a strict process, perhaps detailed in a thick manual, and come up with innovative ideas? Not quite.

The problem is that risks need to be taken from time to time. A strict process restricts the whole concept behind innovation. The best ideas come from creative and free-flowing minds, not from policies that do not just avoid risk but that also restrict the ability to think freely.

The use of strict processes and planning to nurture innovation used to be the norm. Capturing opportunities was shaped by planning through meticulous business-plan development and systematic searches.^[2] In fact, that is still the case today. As we know from our consulting work, many large corporations (some of which represent very famous brands) continue to operate as if there has been no move toward digital since the late 1980s. However, the highly dynamic business environment we live in today is shaped by rapid changes in technology. This requires the ability to sense and digest a large amount of information, to create meaningful hypotheses about the future, and to learn to quickly grasp opportunities. In order to stay relevant, companies must foster innovation by encouraging a testing mindset and accepting occasional failure rather than encouraging process compliance.

When individuals follow strict processes, their minds are directed toward one specific end goal rather than being open to alternative, creative ideas that may lead in a whole new direction. In design and creativity, it is understood that a rigid process does not work, as it may lead to fixation, “a blind, and sometimes counterproductive adherence to a limited set of ideas in the design process.”^[3] So while there are benefits to innovation processes, they also carve out a narrow path that doesn’t allow for exploring unchartered territory.

At this point, we want to give you a preview of an important insight from our interviews: If you need to latch onto something, some basic frameworks are more useful than others. There are some frameworks or even theories that are so simple that they do not need much interpretation. These are often also the ones that withstand the test of time. They are broad enough to allow some flexibility in thinking and adaptation over time. Think about the IDEO diagram on Design Driven Innovation or the Three Horizon Model.^[4] (To find out more about these, see “Resources” in Part 3.)

Against that background, we have distilled our findings and identified what we call the 6 Building Blocks for Innovation. You can have agile, scenario planning, design thinking, and all of that—but at the end of the day, chasing the next trend is not going to help you. A lot of it is just noise, the perennial quest of scholars and practitioners to make their own stamp rather than make a meaningful difference.^[5]

The 6 Building Blocks

Before we go into more detail in the following two chapters, we will briefly introduce the blocks. We classify them into two parts: the “Core” and the “Frontier.” Each consists of important principles that are fundamental in starting and speeding up your innovation journey.

[figure number=Figure 2.1.1 caption=6 Building Blocks for leading successful innovation size=400 filename=FIG_2.1.1.jpg]

The Core is comprised of three blocks defining and establishing the foundations of innovative endeavors. These foundations must be “right” from the start because they will affect everything that is built upon them in the innovation process. If the Core is not strong, the rest of the framework will not withstand the external challenges of innovation.

The first block within the Core is Make Space for New Ideas. This is where you lay the critical foundations of the new innovation team and establish how this team relates to the rest of the organization and engages with ideas. This is where you set the ground rules for the organization. A key principle here is that you don’t need to transform every single person in the organization into an innovation machine. Not everyone needs to be engaged in innovation, but everyone should appreciate that innovation needs to be part of the organization’s DNA.

The second block is Promote Guided Vagueness. Innovators experiment all the time but usually within boundaries. Hence, typical KPIs are rarely effective, and costs and revenue budgets just don’t work for innovation. Some people even say you should have a virtual P&L for innovation. But everyone agrees that innovation is about learning and being free to explore a new world, not delivering against strictly predefined outcomes. It is more beneficial to guide rather than manage an innovation process. By leaving room for vagueness as well as unpredictability, you will develop a more successful and innovative outcome instead of reaching a dead end.

The third block is Build Momentum. As an innovation team, you can’t wait for layers within your organization to give you permission and constantly approve your progress. You can’t even wait for a big budget to be approved and the buy-in from many departments, all with their own goals (whether justified or otherwise) and their own political agendas. You need to be quick to keep up with the fast-paced world outside your company, where start-ups in garages are changing the way industries operate, and consumers have access to a vast range of products, services, and brands in a globalized environment.

These three blocks (ideally) are at the center of your innovation journey if you are to set yourself up for success. But to substantially increase your chances for success, the Core building blocks of innovation are not sufficient.

This is where the Frontier comes in. It, too, consists of three blocks that interact with internal stakeholders (think senior leadership) as well as the broader environment. The actions within these blocks cannot be completed without a boost from the respective internal blocks surrounding the Core.

Block four, essentially the first block within the Frontier, is called Sense the World. It is about sensing the world around you, collecting data, or more specifically, generating the right data (about trends, technologies, etc.) to empower you to think differently about innovation. Innovation happens at intersections between different domains. So you should pay more attention to domains other than your own customers and competitors here. Good data will allow you to come up with good options. Sensing mechanisms follow the Make Space for New Ideas block established in the Core. Without a solid foundation for the organization in the Core, it may be difficult to explore the external environment in a useful way.^[6]

The fifth block, Extract Meanings, is where you transition from data to insights, often taking shape as hypotheses about a new future. It’s about the value that you create for an existing or a new customer. This is determined by the data you have, but it’s also empowered by the freedom that you have, thanks to the openness to vagueness that has been made explicit in your organization in the Core. As a result of eliminating the old, restrictive KPI system, you can push the boundaries and take unexpected paths by following business models and new visions about the future that will create meaning.

Finally, there is the block called Generate Consensus. This is where you generate ideas and sell them to relevant stakeholders. At this point, establishing relationships with internal stakeholders is key. You can’t tell them, “I have this great idea” and expect them to jump on-board. You can’t bring everyone together in a room, from the engineers to the finance people, and expect them to trust your idea. You need to get everyone to join you on the journey by telling powerful, meaningful stories. And you need to do this both speedily and step by step. If you wait too long to establish these relationships, you may miss out on the benefits the internal stakeholders can provide throughout your innovation journey. But if you rush them, you risk alienating them.

This brief summary of the 6 Building Blocks will now be expanded on in the next two chapters. Take a deep breath and dive in.