Corporations shouldn’t outsource innovation to consultants or an agency. Instead, they should look for the hidden innovators who are already there — and thinking about leaving. Senior research fellow Kumar Mehta explains.
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By Kumar Mehta
All business leaders want to innovate and release rare, inspirational, and highly desirable products that their customers will line up to buy. In a quest to learn how to innovate, these business leaders often look outside their organizations and wonder how successful entrepreneurs did it.
They want to learn the secrets of Steve Jobs, or Thomas Edison, or any of a special set of individuals who have changed the word through innovation. They look outward and ask themselves questions like, how does Silicon Valley innovate? And, who can I bring in that will create the culture of a successful startup? Sometimes these business leaders engage consultants to drive the innovation process, hoping they can transform the company into an innovation juggernaut.
This thinking is often flawed.
Find the hidden innovators who already work for you
While few executives realize it, the bright, bold innovators they are looking for are very likely already toiling away within their own walls. Worse yet, these hidden innovators are at risk of leaving to start their own successful companies.
As a leader, you would best be served by identifying and retaining these hidden innovators. Don’t let them leave! Instead, provide them with an environment where they can innovate.
Looking outward for answers is not going to change anything: you need to cultivate innovation from within.
Enhancing the rate of innovation in a large organization involves thinking differently about management, rewards, failure, risk taking, priorities, placement of the best and brightest people, and also about the innovation process in general. Entrepreneurs understand how to think innovatively. Corporations have lost that understand somewhere along the line.
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Innovation is a multiplier effect of many small things, not the result of one large bet. Only within an environment where innovation is encouraged at every level–and only when innovation happens in every aspect of a company–will something large break through. It is breakthroughs like this that can alter the trajectory of your company.
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This is not because corporations lack entrepreneurial talent. They have within their ranks bold thinkers and entrepreneurs who can take great ideas and build successful businesses from them. Studies have shown that corporations are the greatest breeding ground for entrepreneurs.
For example, the Kauffman Foundation studied 549 founders of successful businesses in high-growth industries, including aerospace, defense, computing, electronics, and health care. That study showed that over 75 percent of these successful entrepreneurs worked at other companies for more than six years before starting their own firms. Unlike the vision we may hold in our minds of successful entrepreneurs, the average age of these company founders was forty.
The problem is that corporations are unable to retain the entrepreneurs within their ranks. The most creative and motivated talent leaves to start new companies that often create immense societal (and shareholder) value against all odds.
Had the original employers been able to provide a more fertile environment for innovation, there is a good chance that the departed talent would have formed great new business ventures internally. And, since these innovations would have been supported by the resources of a large organization, their chances of success would have been greater (many experts estimate that 80–90 percent of startups fail).
How to stop your hidden innovators from leaving
There are a number of things you can do to create a sustained environment that breeds innovation.
The first and most important is simple to articulate but difficult to execute: the entire organization has to know that innovation is a priority. Every employee must both feel and be empowered to push the boundaries in any way she or he can.
Innovation is a multiplier effect of many small things, not the result of one large bet. Only within an environment where innovation is encouraged at every level–and only when innovation happens in every aspect of a company–will something large break through. It is breakthroughs like this that can alter the trajectory of your company.
Chasing big breakthroughs in an environment not conducive to broad innovation is a futile effort guaranteed to result in frustration. Every innovative company you can think of has had a broad and democratized approach to innovation, and every single one of them had far more misses than hits.
Innovation is not the domain of a single person or department. It is not the domain of the R&D group, the product development group, or senior executives. Innovation comes from everywhere. It comes from people who deal with customers every day and know how things can be improved. It comes from people who build and sell products, serve and support customers, or from people who simply think of an unusual way to do things.
Innovation comes from filling a need that may be stated or implicit. It can happen anywhere and at any time.
Instead of looking outside for inspiration, build a culture that encourages the bright people already working in your company to build inspirational products.
The results will be remarkable.
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Kumar Mehta, a Senior Research Fellow at the Center, is the author of The Innovation Biome. Mehta is the founder of Bridges Insight, an innovation think tank.
See all columns from the Center.
February 14, 2019