“Innovation is more of a leadership challenge than a technology challenge. It requires leaders who can keep their feet in two places at once,” Chief Innovation Officer at BTS in New York and lead of the firm’s Innovation & Digital Transformation practice group, Peter Mulford told a recent Gordon Institute of Business Science (GIBS) forum.
Innovative leaders have to be able to scale today’s business model while simultaneously creating an environment which allows employees to explore tomorrow’s. Discussing strategies for digital transformation and integrating true innovation into business, Mulford said: “It is the human element behind technology and innovation that business success depends on.”
Mulford, who has worked with Fortune 500 companies around the world such as Amazon, Microsoft, and NASA to build their innovation capabilities, said innovation is discovering and solving problems in new ways under conditions of uncertainty.
The proliferation of new technologies such as mobile, social media and increased computing power has caused the cost of innovation to drop, and are now “in the hands of anyone and everyone,” Mulford said. This has increased the velocity of disruption and the rate of change, which will only continue to accelerate.
“If you are curious and your business model is built around pursuing and exploiting uncertainty, now is the best possible time to be alive and in business. However, if your business is built around the expectation of repeatability or predictability, now is the worst time for you,” he added.
Mulford said the tools and procedures of innovation are not new and had been around since the 1950s. “A lot of business schools and consultants have sprayed pixie dust on it and given it fancy names. But design thinking, for example, has been around forever.”
However, many firms continue to struggle to truly integrate innovation into their business models. This he said is because “acts of innovation are easy, such as hosting a design thinking hackathon. But creating a culture that embraces innovation and digital transformation is hard.”
People don’t innovate because of a fear of failure, Mulford argued. “People aren’t risk-averse or afraid of change. They are afraid of bad things happening to them. If you are moving your company in a new direction or introducing new technology and there is resistance, your people are sending a signal that they are afraid it will impact them negatively.”
Importantly, innovation is not an excuse to waste time and money.
Mulford said he prefers disciplined experimentation to a culture that celebrates failure: “You can fail while innovating, but swop out failure for a culture that agrees it is ok to be wrong. Disciplined experimentation is finding out if you’re wrong, fast and cheap, and moving forward.”
As innovation is a tool to solve a certain type of problem, creating a culture of innovation must start with the business result you want to achieve, he explained. Any innovation and attempts at digital transformation must start with a clear description of the outcomes, and be linked intrinsically to the firm’s strategies and goals. Mulford insisted: “Without this, all you get is manufactured misery.”
“If you think innovation is the solution, you have to first ask what the outcome you are looking for is,” he added.
The process of innovation and learned behaviours
Innovation requires objective, logical thinking, as well as individualistic, creative, and messy experimentation. Most of all, it requires the appropriate leadership behaviours that can create a culture in which innovation can flourish.
Any process of innovation must start with the business outcomes and new leader’s behaviours; this is then followed by new skills and mindsets and finally by programme design. Leaders must communicate what type of innovation they want from their people, and why it matters.
Leadership is always contextual, but there are some patterns, such as design thinking, diversity and disciplined experimentation, which leaders can follow to transform their organisations. “While you can’t eliminate uncertainty, you can manage it by applying learned leadership behaviours,” Mulford said.
Traditional leadership skills of linear thinking, using traditional marketing techniques, leveraging expertise, planning and waiting should be replaced by divergent thinking applied creatively; user centric marketing; leveraging diversity; speed and experimentation and digital literacy.
“Innovation is a discipline, you have to practice and internalise the skills needed to innovate,” Mulford said. “It has to be experiential. You cannot think your way to new behaviour; you can only act your way to new behaviour. These skills need to be learned, practiced and mastered,” he concluded.