We’ve all heard the stories and seen the patterns play out again and again. A nearly mythical leader (often the founder) creates a phenomenally innovative organization. Following a meteoric rise at some point, whether as a function of time or age or a demand for a more “mature” leader, they pass the baton on to the next generation of leaders.
But when they do, a shift happens. At first, the organization becomes even more successful – better processes, efficiencies, and strategic planning drive profitability and predictability through the roof. And all is well.
But then, one day, we wake up and realize the organization is barely a shadow of its former self. Sure it may still be large and profitable, and highly regarded. But those inside the organization know it’s lost its spark. And the organization begins its inevitable long, slow slide into irrelevancy.
This pattern is so typical that we’ve come to not only accept it but also to expect it. Many excellent books exist on this very topic. Among my favorites is The Innovators Dilemma by Clayton Christiansen, The Founder’s Mentality by Chris Zook and James Allen, How the Mighty Fall by Jim Collins, and even Zero to One by Peter Thiel.
There are many valid reasons for why this happens, plenty of myths that abound regarding the unique powers of these Visionary leaders, and an abundance of strategies to counter (or at least slow) the slide.
But to be honest, while helpful, most fail to address the one fundamental issue.
These incredibly innovative leaders never actually built innovative organizations.
So when they leave (which we all must do eventually), they leave behind an organization that is known for and takes great confidence in their identity as a great innovator, that is little more than a museum trying to preserve the vision of their leader for as long as possible.
Ironically, the more you attempt to preserve the innovation of the past, the more you sacrifice the innovation of the future. And the direct result is the premature death and decline of once-great organizations.
Ok, what do I do?
How can you build a truly innovative organization, one that has the capacity to not only outlive you but out-innovate you as well?
How do you cultivate the next generation of talent and leadership to carry your vision forward and build it bigger than even you could have imagined?
Does that sound too pie in the sky?
Well, it isn’t. In fact, this is precisely what you must do to build an organization that can thrive and enjoy Predictable Success for decades and centuries instead of months and years after your departure.
And personally, I believe that is the most accurate measure of an innovator. Of course, many can be innovative, but the best don’t stop there. They build truly innovative organizations.
That’s great! How do I do it?
At the risk of trivializing an incredibly important issue, there are five strategies for building an innovative organization. To that point, let me add that creating an innovative organization is one of those endeavors in life that are truly simple to understand but difficult to do. But if you are willing to execute these five strategies consistently, you will find yourself the primary beneficiary of all that hard work.
- Focus on institutionalizing innovation
- Create a culture of innovation
- Allocate resources to implement new (potentially bad) ideas
- Drive strategy that demands innovative action
- Put it all together in a process that fosters failure
In this article series, we’ll dive into each strategy.
Focus on institutionalizing innovation
This is the essence of the change that needs to take place. And there are two aspects that require attention – ethos and mechanisms.
Ethos is arguably the harder of the two. It’s more subjective and hard to measure. It’s also the more important of the two. If you try to skip to the mechanisms, it actually makes the problem worse.
What do I mean by ethos? Well, it’s the question of the innovative leader’s role while they are still with the organization. Early on, it is to be the innovation, then to drive the innovation. And that creates a dependence on the leader to innovate. It also tends to limit the ability of others to innovate unintentionally.
The innovative leader’s ideas are so big that they can instantly consume every last bit of meaningful resource available (and then some), which leaves little room for others to build their own muscle of innovation.
Before they exit (about five years), they need to shift from pursuing their own ideas to promoting the ideas of others. This change in ethos is the very life and spark required for the mechanics to actually work. Often, this means hiring strong Visionaries and creating space within the organization’s ranks for them to thrive.
Before innovation can take root in an entire organization, a solid foundation needs to be laid underneath before you can start building innovative processes or implementing innovative strategies.
For this reason, the mechanics of innovation start with the organization’s org chart and role definitions. The expectations of innovation, the boundaries, and the resources for innovation need to be laid out clearly in the organization’s structure.
This does not mean you should create an innovation department. That is the opposite of what you should do. Instead, you want to build an expectation of and capacity for innovation in every department.
A clear org chart creates the environment for cross-functional teams to flourish. These teams will serve as the driving force of innovation. In addition, they have the advantage of being project-based, pulling from various levels of the organization and connecting multiple functions within the organization.
Throughout the remainder of this series, the following four strategies fall into these two categories. Creating a culture of innovation and allocating resources to implement new (potentially bad) ideas are both ethos. Driving strategy that demands innovative action and putting it all together in a process that fosters failure are both mechanisms.
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