How Do Innovators Think? Harvard Business Review

Harvard Business Review has an interesting article about How Do Innovators Think?  The entire article is a good read, but here is the list of capabilities/tendencies of innovative people:

  1. Associating: Connect ideas together
  2. Questioning: Ask why, how, what
  3. Observant: Look into details
  4. Networking: Know who to talk to and how to reach them
Clearly a good list.  The one thing that they make a point of (and I agree completely) is inability of even the most creative people to question – mainly due to cultural/social learnings:

 We think there are far more discovery driven people in companies than anyone realizes. We’ve found that 15% of executives are deeply innovative, meaning they’ve invented a new product or started an innovative venture. But the problem is that even the most creative people are often careful about asking questions for fear of looking stupid, or because they know the organization won’t value it.

 I guess the biggest challenge for R&D managers then is to develop an environment that encourages civil and constructive questioning.

Three Big Assumptions Leaders Should Question

In an article in the Washington Post, John Boldani points out Three Big Assumptions Leaders Should Question

  1. It is important for organizations to set firm goals
  2. Quick wins are essential to managers in transition
  3. Senior leaders believe in their CEOs
Many organizations I have seen suffer from too much focus on goals.  One widely known example of this is in “Stuffing the Channel” at the end of the measurement period to meet sales goals and get bonuses.

It is important for organizations to set firm goals. People need to have direction so it is important to point them in the right direction. But such a single-minded focus on goals may end up damaging individuals and the organization says a study conducted by Maurice Schweitzer of Penn’s Wharton School. Relentless pursuit of goals tempts managers to cross ethical boundaries and abandon ‘sound business practices.’ Unreached goals may then end up frustrating an organization rather than helping it to succeed.

However, if the goals are not firm than organizations tend to not really perform anyway.   If one enforces a culture that goals need not be met, how does one motivate and reward the organization?  I think a better approach would be to set up a tiered goal structure: An (exponentially) increasing reward for meeting or exceeding goals.  It is even more important to make these tiers somewhat achievable – encouraging teams to try to reach the next level (Remember the Lincoln Electric case in business school?)

Another key with goals is to have balanced goals: opposing goals that make sure that behavior does not become too goal focused.  In an R&D world for example, successful R&D projects are a goal most organizations have.  A success driven goal alone will encourage managers from hiding failures and impede risk taking.  A balancing metric would be wasted development effort: tying some fraction of bonuses to projects that fail – 90% of bonus for success and 10% for failures…  This would encourage R&D managers to take risks and encourage acceptance of failures.

The other recommendations are similar.  Senior leaders clearly should not always believe in the CEO.  However, a show of solidarity might be good for encouraging and motivating R&D teams.

Innovation Incentives

Slate Magazine in an article titled How to make America more innovative: give scientists more incentives to innovat: shows that just opportunity and skills are not enough to drive innovation.  Organizations need to align incentives with needed behavior to innovate successfully.

“Incentives matter for innovation, and it’s a critical lesson for the government bureaucrats set to disburse hundreds of billions of dollars through Obama’s national Innovation Strategy, which is supposed to return America to innovative pre-eminence. The way we spend those dollars will be at least as important as how much we spend, and if we want the next generation of ideas to be Made in America, Obama’s team had better get its incentives right.”

The authors point out that HHMI with guaranteed support for five years tends to have more publication than NSF/NIH funded project.  I think that in many R&D organizations, guaranteed employment may not have exactly the same results  – HHMI only allows people to work there for a few years.  Employees have to find a permanent home someplace else at the end of their stay.  This would probably drive some behavior.  Also, amount of money being awarded may have some impact on results as well.

Unfortunately, no simple solutions / rules.  Only thing for certain is that R&D managers have to keep incentives in mind when trying to drive innovation.