Brent McCallum
December 2012

As competition intensifies, innovation is increasingly the thing that separates the winners from the losers. Being good at innovation matters, but it has been a struggle for the Pharmaceutical sector. It’s ironic that an industry that relies heavily on learning and experimentation during the discovery and clinical trial phases sticks so rigidly to convention in commercial operations. The challenge we often hear from clients is how do we maintain high performance while allowing creativity to flourish?

It’s true that this is an evidence-based industry with significant scientific and regulatory hurdles. But in our view these barriers matter far less than the cultural ones. By definition innovation requires new thinking and cultural roadblocks often prevent change from happening.

Fortunately, there are proven ways to remove these roadblocks and get ideas flowing through an organization. Over the years, Make Believe has helped a number of organizations across diverse industries to embed innovation into their cultures. Here are the key lessons we have learned along the way.

C-suite support and sponsorship is vital to get innovation off the drawing board and into the market. You can’t just make a pronouncement that now you’re going to innovate and expect it to bubble up through the ranks. Ideas are fragile and leadership has to create an environment where trying new things - not all of which will work - is encouraged, nurtured and protected.

Innovation strategy needs to be aligned with business strategy to make change happen effectively. Innovation efforts should be anchored to issues the business cares deeply about, otherwise you will generate lots of ideas but few will ever see the light of day because leadership simply won’t be invested in the outcome. Set specific challenges rather than relying on random ideas coming forward. The latter is akin to the old corporate suggestion box and about as useful.  GE’s Ecomagination initiative, for instance, sprung from a strategic need to meet growing world demand for green energy.

Start with customer needs, not your product, service or idea. Immerse yourself in the customer’s world and uncover the things that really matter. Seek inspiration in new ways such as ethnography, extreme customer interviews and analogous situations to generate fresh perspectives. Use storytelling techniques to ask higher, more acidic questions. According to the annual Booz innovation survey, need seekers consistently outperform the market.

Early investment should focus on a small number of high priority areas. Rather than expecting innovation to come from all corners of the business start in few places and incubate these ideas with care and attention. When Steve Jobs rejoined Apple, he was dismayed at the number of disparate projects, including printers. He drew a 2X2 on the board and told everyone: “From now on this is all we do: Personal/Business Desktops, Personal/Business Laptops.” This reinvigorated Apple and set the stage for its mobile computing revolution.

It’s an old cliché but people are the key to innovation. If you want to generate fresh thinking you need to invest in developing leadership behaviors and employee capabilities. And enlist evangelists to spread innovation deeper into the organization. At Inuit, the financial software company, innovation is everyone’s task but select individuals are trained to serve as coaches and facilitators.

Foster a learning culture that rewards curiosity, bravery, collaboration and experimentation. If you are too afraid to fail, you are destined to do so. Rather than rushing to implementation, design experiments that help you learn and adapt.  Facebook’s mantra is: move fast, break things

Empower broad-based action through new processes, tools and measures. Established companies execute business models where customers, problems and product features are known. But innovation requires a start-up mindset where exploration and discovery are the norm. P&G runs courses on entrepreneurial thinking and has guides who help new product teams implement disruptive ideas.

Celebrate wins throughout the process and curate a showcase of the very best ideas to show how they were conceived and implemented (or, equally important, not implemented!). Gore Industries, maker of Goretex, maintains a museum quality exhibition of everything from stents to spacesuits.

Over time, success will be achieved by sustaining a portfolio of innovations that strike a balance between audacious ideas and commonsense everyday changes. Coca Cola uses a 70:20:10 model where 70% of resources are dedicated to existing or incremental offerings, 20% to evolutionary ideas and 10% to disruptive.

You need a story to provide a clear vision and create a sense of urgency. Your employees need to know why innovation is important and why they should care.  It shouldn’t just be about numbers. Unless you can engage them on a deeper, more emotional level, your message risks being drowned out by the din of the work day. Google’s story is about making the world’s information accessible.

Like any big change, becoming more innovative presents challenges and opportunities. But companies who embrace these principles will put themselves on the right path to generate fresh thinking and bold action.

About the Author:
Brent McCallum leads Make Believe’s New York office. brent@makebelieveny.com