Lecture: The challenge of innovation and how to

encourage it?
Challenges of the management
While the push for an innovation project usually comes from the management, especially
when there is a burning need for new improvements, there are many things that can go
wrong with management involvement in change. Here are five categories of challenges
management face within when managing change.

Creating excitement
Depending on the company culture, managers are still being relied upon when one seeks
support and approval. At Rise, the only effort the management put into the change project
was the kick-off event. Even though many of us were eager to further the change, there
seemed to be no real effort from the management. You can imagine the let-down I felt
when the ideas and the excitement toned down. Therefore, the first lesson to be learned is;

The more excited you as a manager are about creating change, the more your employees
will feed off of that energy.

Lately, there has been a growing amount of research pointing out this importance of
management involvement in innovational activities. Leadership is needed for projects to
be successful and for a greater amount of innovations to take place. If your boss expresses
interest in what you do, and embraces you initiating change, motivation will increase.
Involvement can be as simple as a small follow up on each started project. How is the
project going, are there any advances? People like to boast about their achievements.
Striking a conversation about challenges the innovator had during the process of
developing a new idea can induce new thought patterns. Maybe there is something that still
needs to be ironed out! Talking about the process and having innovators explain the process
will strengthen the innovators courage and can help with structuring the thoughts for better
results.

Executing with a clear strategy

At Rise there seemed to be a lack of strategy and clear goals with this change
project. Research results show that more innovative companies have a clear structure for
innovation. Everyone should be aware of the process’ status and the requirements an
advance has to fulfil in order to be developed further. Thinking back on the change project
within Rise, I am certain the management did not have a clear path they were following.
Or if they had, it was definitely not evident. The uncertainty of what was expected made it

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hard to know what was something that could be developed further, what was not beneficial
to continue, and which other ideas had already been advanced. On top of it all, it was
uncertain if the ideas were considered at all. Lesson two;

Have a clear strategy and set up goals to focus development and find purpose for actions.

Creating a plan & communicating with transparency

Without a plan for change actions, it is uncertain through which mediums developments
need to be shared in order for them to be spread out to the whole organization. A plan, and
clear processes of incubation, aids the development of ideas. Clarity makes implementation
easier as innovators do not need to figure out the diffusion as well as the necessities of their
innovation within the organization to achieve organization wide adoption. As a case study,
published in the Emerald Insight journal Strategic Direction, suggest "Clearly articulated
strategies and roadmaps can provide transparency and direction for innovation.", planning
and transparency are important within change projects. Adobe's kickbox, an innovation
program that previously also has been mentioned within our blogs, is a great example of
successful planning. The box is an easy aid to foster innovation in a transparent way.
Therefore, lesson three;
Create a plan of action and be transparent about the advances of the different projects
that emerge through innovation.

At Rise, it would have been a challenge to get an innovation to the attention of the
management, let alone the organization. Since there were no plan of how these innovations
and improvements were to be presented and put forward, it seemed an impossible task to
try to innovate. Had there been a clear path of testing and adoption, the excitement and the
eager to be on the top of the wave would have lasted longer I believe. Something simple
could be a transparent medium for collection of ideas with a clear process for testing and
improvement. Guiding from the more experienced, and collaboration to improve on the
original could give the small push an idea needs to transform into an innovation.

Pushing the change

Some amount of control is needed. While this might seem contradicting to the rest of the
content within this blog post, an amount of control is not illogical. With control I mean
directions, pushes, and encouragement to both pursue new and to embrace the new. To
change the behavior and the practices of employees within an organization these light
forms of control are needed. Without having someone pushing implementation of
innovations, the potential innovations easily remain ideas. While working at Rise, this
“control” was completely missing. I saw no encouragement, no push, and no direction

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adjustment from any of the managers. The lack of encouragement to embrace the new lead
to a lack of trying. Hence, the ideas did not reach adoption within the organization. Here
we have lesson four;

Exercise a form of control that gives small pushes and direction to further change,
something that increases encouragement. But, refrain from control that restrict action
and discourage irregularity.

Easing resistance
Encouraging knowledge sharing between colleagues and changing the attitudes about
change of employees has been recognized to be a difficult task. There is usually even some
resistance to change, something that happened at Rise as well. It was easier to continue
with the old when there were no pushes for new. And, since there were no “coaches” to
encourage development, innovation did not occur.
To have successful development it is beneficial to understand change resistance and the
specific hinders of your particular field. Whether resistance is toward the introduction of
new resources, such as manufacturing machines or new elaborate programs, updated
practices or new disrupting theories, this resistance has founded reasons. For example,
resistance can occur from the uncertainty of the future, employees can worry that changes
will make them redundant. Resistance can also come from fear of the new where the
learning process is perceived as too challenging.
The perception might reside in rumors or misconceptions about the new. Resistance can
also form through lack of motivation, or lack of the feeling for purpose. Why should the
employee help with innovation, is there something to benefit from other than bringing in
business to the employee? Does contribution give something to the employee? “The
corporate need for innovation must appeal the employee’s heart.” (Gupta, 2011). Many
more reasons can be found, but a lesson can be derived, lesson five;

Find out the reasons to resistance of change and give positive encouragement, sufficient
training, and sound counter arguments to ease the difficulty to adopt and develop the
new.

Challenges with the organization environment

A lot can go wrong already before an effort to implement the innovation in the organization
is made. Company culture is an important aspect of innovation success. Sudden changes in
how things are done is hard to incorporate into the daily activities. When the head of the

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team at Rise introduced the innovation project to us, I think, he expected us to start a change
process immediately. A change process, where our methods and practices would evolve
into something new and revolutionary. A change process where innovations are to be
introduced, something that could change the whole field.
What was missing, however, was a nurturing environment and encouragement to go over
each obstacle in changing behavior. Unanswered questions remained. Is failure accepted,
what happens if something fails completely? Can something be tested and scrapped if it
does not seem to work, or is one supposed to develop this test further to force it to work?
How should this new be implemented if it succeeds, where should the new suggestions be
taken? The organizational environment was not encouraging where new ideas would be
engaged with eager. We have the final lesson from the case, lesson six;

Create an encouraging environment where failure and mistakes are allowed.

We have written blogposts before about improving the company culture. In one, opening
company borders by removing unnecessary silos, walls and obstacles between company
functions is given as an answer to embrace communication, sharing information, and
coming up with new. Collaboration between many functions can help different parts of the
organization recognize similar problems, which can be solved more easily with cross-
functional collaboration. Research has also discovered that it is beneficial to avoid short-
term thinking. A phenomenon that leads to the environment becoming more tense,
competitive and destructive. The research discovered that in these environments stress is
increased, people start acting dumb as nobody is listening to their ideas, and people feel
disrespected and mistreated.

“The guiding coalition must recognize that employees must be inspired to

innovate at work, they cannot simply be told to innovate.”

“The guiding coalition” Gupta is talking about is a core team or group that is tasked to be
responsible for “drilling down” innovation within an organization. These two cultural
aspects, closedness and short sightedness, reduce innovation activities. A culture therefore
needs to be built that allow and encourage organization-wide communication. While it
makes sense to structure an organization into functions, it is not directly helpful to foster
innovation.

Challenges within Organizational Structures

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Structure is an interesting topic to write about. There is a plethora of ways to think which
leads to a great number of possible organization structures. One structure can work well
for someone, while being devastating to another. Some common negative aspects are
however possible to point out.
Bureaucratization is the first that comes to mind, partly because it is such a big topic right
now. There are points to be made for bureaucratization, but for innovation it is a
hindrance. Excessive bureaucracy was listed as an obstacle to innovation, a hinder to go
further and grow. Bureaucratic principles slow processes down and make it more difficult
to get the resources needed for change.
The slowdown does not only affect the speed of completing change, but motivation as well.
If it is excessively hard to accomplish something that differs from the original, it takes
more efforts to have changes implemented. A McKinsey study confirms this. They found
executives saying that “...their companies, for the most part, are not structured to support
generation and execution of new ideas.”.
Resistance to change, difficulty of spreading something new, and prevention of furthering
change at lower levels of the organization are some additional examples from
bureaucratization that slows down or prevents innovation. Something the study confirms
as they found that executives, from companies that do not have well-established innovation
strategies, are more likely to say that “...bureaucracy slows down decision-making and
hinders innovation...”.
Deep hierarchy can hinder innovation as well, especially if it is deeply fused into the
company culture. A culture, where you would be frightened to speak to management. A
culture, where it is unheard of to step over both more senior employees and managers. With
this kind of a culture it might be perceived that innovation is not for the lower hierarchy
employees.
While employees are afraid to speak up, a big part of the company is falling out of the
innovation pool. Also, failing to have collaboration between diverse groups of employees,
it is possible that ideas and points are not considered in the innovation practices. Instead of
solving problems on the organization scale, you have “hacks” and more minor solutions
that temporarily fixes problems locally within smaller teams. In other words, a huge
potential is lost.

Examples for further information

If you feel your innovation practices are lacking the speed that it could have, I hope both
this change management case and the research behind it introduced some ideas about how
innovation can slow down, or in this case stopped altogether. The three areas of challenges
give indication of where to look for weaknesses within innovation management practices.
If the story was unrelatable to you, some other examples can be found. I will leave you

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with these three famous cases that can be studied for a broader view of how poor innovation
management can lead to devastating outcomes.
Plenty of examples can be found within digitalization. It is not that long ago since video
and DVD has been more or less forgotten through the transition into on-demand services.
Rental stores such as Blockbuster were previously fulfilling our entertainment needs, but
has now failed. This article, for example, shortly describes the fall of Blockbuster and
postulates it fell due to poor ability to intake new information. While Blockbuster once
thrived, they failed to modernize the movie watching experience and lost customers to
competitors that innovated the business and moved the content to more accessible
mediums.
Nokia’s previous mobile phone business is another example where internal factors
contributed to failed innovation. Many have written about what went wrong within the
company and Management is often blamed for poor decision making. Laamanen, Ramberg
& Vaara has released a research paper where they studied success and failure of
management, a case study about Nokia. In the paper, they break down the failure into 4
discourse categories. Three of the categories are comparable to the three pitfalls described
within this blogpost. Case Nokia is a great example to study for further information about
failed innovation efforts.
The final example, Commodore International. The company that started as a computer
repair store and ended as a manufacturer that sold the best-selling computer of all time, the
Commodore 64. Despite the commodore 64 having brought many innovations, success
after that computer never followed. It has been reported that the teams lost their culture of
innovation among other things which lead to Commodore International's downfall.

To Encourage Innovation, Make It a Competition

he competition format has fueled major successes in business. Fortune 500 companies like AT&T
and American Express often sponsor online creativity contests to inspire innovation among their
customers, while Kickstarter and other crowdfund platforms have ideas compete to win funding.
And organizations can also use competitions to drive innovation within their own workforces.
For example, Thompson Reuters created a “catalyst fund” to encourage and support new ideas. To
access it, teams of employees compete by presenting and defending their most compelling ideas to
an innovation investment committee. The Department of Health and Human Services also recently
launched a “Shark Tank”-style competition where multiple employee teams compete to pitch their
best ideas to senior officials.
However, while internal competitions may sound easy enough to deploy, there are key design and
management principles to consider if you want them to yield good ROI. Having helped over two
hundred companies and large organizations deploy internal and external competitions, we’ve found
four elements that will lead to success:
Frame the competition around a specific need. “Design the next big thing” is not a good challenge
statement. Open-ended questions yield open-ended answers. Make your challenge statement or

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question focus on a specific problem to be solved. Consider the XPRIZE Foundation’s famed
spaceflight challenge, which offered $10 million to the team first able meet these very specific
criteria: “Build a reliable, reusable, privately-financed, manned spaceship capable of carrying three
people to 100 kilometers above the Earth’s surface twice within two weeks.”
“If they had just announced a very open-ended challenge, such as ‘Prove commercial spaceflight is
possible, they probably would have ended up with ambiguous results. Instead, teams were able to
visualize the requirements of the challenge and work toward those specific goals.”
Break up challenges into manageable, implementable steps. Lay out a step-by-step process for
how to participate so your employees aren’t overwhelmed. For instance, rather than ask competitors
to turn in a 50-page business plan for their idea, ask them to first submit a one-page pitch. Once you
narrow the candidate pool, quarter-finalists can then flesh their ideas out into full-fledged proposals.
This way, all contestants get immediate, actionable feedback on their ideas, and know whether
they’re on a fruitful path before committing any more time to it. This process also encourages them
to learn and practice different skill sets along the way: pitching, analysis, plan preparation, etc.
Provide company resources and internal mentors. As companies grow, they build up massive
repositories of knowledge, resources, and IP assets that become so large, even their own employees
and executives aren’t fully aware of its breadth. Leverage this content by encouraging contestants to
access this data. A similar course of action was done in the Reed Elsevier Environmental Challenge,
which awarded projects that best demonstrated new ways for developing nations to access safe water.
The multinational publishing company gave contestants access to all its relevant materials (e.g.,
maps), so they could integrate this knowledge into their submissions.
However, a company’s best resource is its staff, which is why we also recommend competitions
come with internal classes, tutorials, and when possible, executive mentoring, to better guide the
contestants through the idea submission process. TC Transcontinental, Canada’s largest printing
company, did this to award $2 million in development funding to four ideas presented across the
organization. The multidisciplinary teams of employees worked with facilitators over the course of
three workshops, while coaches and subject matter experts offered their unique perspectives,
feedback, and expertise to help teams further hone their ideas and concept plans.
Draw value from the competition process, not just the results. As with most new businesses and
patents, most innovation contests do not lead to substantial results right away. This is true even of
the best competitions designed around the principles outlined above. For that reason, it’s important
to emphasize the benefits that contests yield. No matter what ultimately happens with the eventual
winning idea, well-managed internal competitions teach employees new skills, connect them across
multiple departments, and amplify the company’s overall creative ambience. And in our experience,
after companies design and execute one competition, they often gather the important data and ideas
they’ve learned to use in subsequent competitions. As this process plays out, the greatest benefit may
be for the hosts of the contest, since they learn to leave their teams free to be daring so they can
cultivate great ideas over time.

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