These past weeks I have reflected a lot what it means to know about leadership and innovation in theory and what happens when all of those thoughts and ideas have to take come into contact with the real world.

One of the key takeaways from discussions I have had is that organisational change is painfully slow but it can be done, not necessarily by those on the top but it’s a longer journey to people’s mindsets, beliefs and assumptions about how things are, what they could be, and how to get there.

This also relates to what we believe our organisation is capable of and how ideas travel within the organisation, how power dynamics impact on what gets heard and what does not, and how the process of ideasation is conducted.

Hierarchies can both enable and kill innovation.

What I have come to realise is that there is little point in arguing or going against institutional politics as one can spend all of one’s energy in trying to fight battles for influence.

Each person has a different filter on ideas and opportunities, what counts as innovation, and how things should be done and by whom, and these will drive the way each of us make decisions and facilitate processes.

The true strength lies in finding one’s tribe, people who share passion for both innovation and collaboration, and are ok with not knowing the end product when starting a discussion on what success and big vision could, should and can look like.

I am constantly reminded of this by Safi Bachall’s book Loonshots in that early stage ideas are vulnerable and fragile, and we need to build trust but also let the ideas form over time.

But how do we make sure that ideas are being captured across the organisation in a manner that is conducive and builds somehow systematically into a process that can capture those?


FunLabs and Fuck-up nights: learning in real-time

In Seeing Around Corners, two examples warrant further attention: FunLabs and Fuck-up Nights (excuse the language), which are examples of how companies and institutions can invest in new ideas and learn in real-time.

A digital innovation company, Robots and Pencils, for example invests in FunLabs, which is a company specific effort where employees can propose ideas based on new emerging technologies that the company should look at.

Through an internal voting process, ideas are selected, which might be game changers for the company; people are then selected to work on the technology or product, they immerse themselves for sixteen weeks to develop the idea, and produce a learning report in the end.

This enables the company to stay ahead of any trends, but it also enables innovation, and investment in ideas that could be ground-breaking and true gamechangers.

This involves taking risks, and investing in risky and untried ideas.

This way innovation can be encouraged in small scale, and scaled up on those instances where the product and technology are workable.

Another way to encourage learning is what Klöckner & Co company does in trying to amass learning from ideas: they have constituted Fuck-up Nights where they invite founders of failed start-ups to come in and discuss their failures and what they have learned.

Sharing of failures and discussing failed implementation of new ideas and technologies, is an invaluable learning opportunity and something universities could also benefit of.

By understanding individual and collective failures in pursuing ideas enables a much richer dataset of what can go wrong, and how one might pursue similar ideas and products in the future.

This also gives edge to the company in question in thinking how it could benefit from start-ups that they could pursue inside the company, which is exactly what Klöckner & Co is doing.


Innovation Proficiency: where do you stand?

Another key factor to encourage innovation is embedding measures such as “innovation proficiency” within the organisation.

Many organisations claim to be constrained by so many issues that they simply cannot innovate even if they wanted to.

But often constraints are actually more internal than external: many of the constraints are in place to “protect and defend the orderly operation of the existing business and to keep it from being disrupted”(p. 155).

Innovation proficiency is a concept that Rita McGrath has developed with several colleagues and it describes the organisation’s capacity to innovate in the face of emerging inflection points.

This includes 8 levels that organisations can move through as they reflect on how they deal with new ideas:

Level 1. Extreme Bias Toward Exploitation. Organisations at Level 1 are often in stable markets, and take for granted the market assumptions and keep operating as they are, with very little need for innovation and change.

Level 2. Innovation Theater. These are very early attempts to raise discussion on innovation, but is relatively small scale and usually consists of random initiatives that are small-scale within an organisation.

Level 3. Localised innovation. Innovation is raising its head across a few groups in the organisation but is very fragile; efforts at innovation can be easily killed for example due to failure or change in organisational leadership.

Level 4. Opportunistic Innovation. Level 3 efforts are starting to pay off and organisational leadership grows more supportive of “innovation capability” within the organisation.

Level 5. Emergent Proficiency. Both money and time are invested in innovation, and companies start developing and implementing “innovation metrics” to make a case that innovation is being taken seriously.

Level 6. Maturing Proficiency. This is where true commitment to innovation starts showing up as it becomes “an important part of executive compensation and promotion discussion” (p. 157). Innovation metrics are tracked and measured, and internal and external connections of ideas start to emerge.

Level 7. Strategic Innovation. Staff perceives opportunities to elevate innovation into their practices while the senior management also publicly signals that the company’s  mission is now heavily integrated into innovation. Resources are available, and efforts are supported across the whole organisation.

Level 8. Innovation Mastery. The organisation becomes widely known as one of the success cases of innovation, growth is rapid, and innovation practices have been embedded across all functions and levels in the organisation.

Understanding these different levels gives you an edge as you can think about what strategies could be put in place given where you are at in how your organisation thinks about innovation and embeds it, or not. (If you are interested in how to move between levels, chapter 7 of Rita’s book tells you how to).


Culture change that can foster innovation

People often lament that big organisations are really good at killing innovation through bureaucracy, power politics, and individual KPIs that make competition much more of a priority than genuine collaboration.

This is the truth in many cases but if we just sit in our cubicles and focus on our own KPIs, this becomes a self-fulling prophecy.

Reaching out across disciplines, sectors and ideas through a genuine wish to wanting to understand a richer set of perspectives, hearing out different ideas, and building trust are keys in getting innovation happening on the ground.

Cultural change is an inflection point in itself.

It can be likened to an insider start-up within a large organisation: when enough people start to shift their mindsets around ideas of collaboration and when those collaborations reach a critical mass, they will also change the company culture.

Organisations and people are changed from within, not by orders or imposed frameworks, but through genuine capacity to connect with each other in a way that engages our full selves.

Our role, then, as leaders, is not to merely tick off KPIs but to take care of those who we lead, making sure that they can and want to go beyond their job descriptions and create innovation that benefits the whole society.

That, my friends, is a grand challenge worth taking on.