The Spiritual Nature of Innovation

As the fundamental driver of value in business, innovation is the norm when an organization is young. Here's how to keep it alive as the organization matures. OVERVIEW: As companies mature, they generally decline in creating new value due to the failure of their internal innovation process. The aging organization comes to be dominated by operations executives, who tend to be intolerant of the different cultural needs of the variety of corporate segments needed for high-innovation productivity, particularly "the fuzzy front end." But decline is not inevitable. A study of exceptional mature companies that have maintained their innovative force shows some clear characteristics in common. The broad-based corporate cultural commitment to innovation as a way of life is particularly important in these companies in contrast to the tendency to attempt to make innovation a functional activity by delegation to RD it is an environment, a culture-almost a spiritual force-that exists in a company and drives this kind of value creation. The illustration on the next page roughly outlines the fundamentals of what I mean. On the outside, you have the world, and inside the company. I shall focus here on three phases in this overall holistic innovation process. The first phase, at the left of the illustration, is widely called the fuzzy front end. This is where idea generation takes place, where lots of things are poised for launch, and where people get excited. Although most of the ideas don't go on to the next stage because all kinds of problems and difficulties show up, a few make it through; they demonstrate feasibility, provide a satisfactory return, meet customer needs, fit the corporate strategy, and the like. In the second phase, at the center, we have the familiar gating process. At Polaroid it is called PDP, the product delivery process. Most companies have something like it. Finally, there is commercialization, the third phase on the right, which we call operations. Operations are a crucial part of the innovation process. That is where you extract the value from everything you have created at these earlier stages. Fundamentally Different Microcultures The point that I really want to make, that I think is overwhelmingly important, is that these are basically three fundamentally different microcultures within an organization. They have fundamentally different needs. And the dilemma is: How do I maintain these separate cultures, each of which has different needs, in order to optimize what it contributes, and maintain them together as an overall value delivery system? It is a deep-seated dilemma; it is almost insoluble. It requires great wisdom to hold all of this together and to keep it going, knowing that it can never be totally harmonious. Let me expand on each of these as I perceive them. First, the fuzzy front end. Its characteristics: experimental, high tolerance for ambiguity and uncertainty, chaotic, willingness to consider the unreasonable. Where else in corporate life can you consider the unreasonable? Where else can you set the bar really high? If you don't have a viable fuzzy front end process, where else can it happen? Basically, it can't happen anywhere else. This is an element of what is so vitally important: enjoyment of the quest, unpredictability and much individual activity. …