Flashpoint

 

By Tim Michaelis, PhD Candidate, NC State University, Research Associate, Center for Innovation Management Studies (tlmichae@ncsu.edu)

According to 1,500 global innovation executives, interviewed by the Boston Consulting Group in 2014, innovation is considered a top 3 priority.(1) However, 70% of these executives rated their company’s innovation capabilities as only average. With such data in mind, data that indicates a significant gap between topic importance and the skills needed to address it, I decided to find out what the biggest companies are doing to train their innovators. Here’s what I’ve learned:

Innovation training simply does not happen.

After interviewing 40 R&D directors and senior vice presidents at large, global companies, I learned that innovation training does not happen in their companies. According to these innovation leaders, a lack of innovation training exists because employees do not have the time to innovate (despite clearly having the ability). For example, one director told me “We just don’t have the time to do innovation the way it looks in the books.”

This got me thinking—what is the problem? These 40 individuals are some of the smartest and most passionate people I have ever had the pleasure of speaking with. I could hear it in their voices; they all truly cared about developing better products and services for their end consumers. In an attempt to better understand the problem, I turned my sights on existing literature—the almost non-existent literature—surrounding innovation training.

What is Innovation Training?

Simply put, innovation training is the effort to embed innovation-specific knowledge, skills, and abilities (KSA’s) into employees. For my study, innovation is defined as “any novel product, service, or production process that departs significantly from prior product, service, or production process architectures.”(2) I chose this definition because it best aligns with the strategic objectives of innovation-driven firms; e.g., innovation defined as “novel processes or their outcomes (products or services), rather than administrative changes, such as downsizing (3, 4) or organizational restructuring.”(5, 6, 7)

The Innovation Talent War

Large companies spend a lot of time and money searching for innovative talent in what is commonly referred to as the “talent war,” and rightfully so as the Baby Boomer generation is retiring at approximately 10,000 a day!(8) This phenomenon is already happening and will continue through 2030. While hiring new employees is one route to building an innovative workforce, hiring is not a cheap endeavor and does not account for the potential knowledge loss of the retiring Baby Boomer generation. So, what else can companies do to build an innovative workforce?

In-house training would seem a no brainer and, consequently, should have extensive research already completed on the topic. However, I found only a handful of academic articles and nearly zero practitioner articles regarding this topic.

The lack of information is what drove me to conduct interviews with 40 R&D directors and senior vice presidents, beginning in June 2015. In addition to learning what those companies are doing, I wanted to know: Does innovation training work?  If so, what are companies doing to teach innovation skills? Are they doing anything at all? More specifically, I wanted to know: 1) how the largest companies measure innovation performance; 2) what they view as their innovation success factors; and, 3) how are they training employees in those innovation best practices taken from Robert Cooper’s work on R&D best practices in new product development.(9, 10)

10 Common Themes in Innovation Training

Why is it that innovation training does not happen in most of the companies interviewed? Here are some of the more typical responses accompanied by my brief observations regarding them:

1. “We don’t have standardized metrics to measure innovation… so how could we do portfolio management? It is impossible to compare any of our projects!”
   • Without standardized innovation metrics, portfolio analysis cannot be done. Thus, companies without defined innovation metrics will remain stuck in ad-hoc incrementalism.
2. “We hire smart people and expect them to figure it out.”
   • Companies need to focus on shifting knowledge from the retiring Baby Boomers to the next generation. One solution – have the experienced innovators teach internal innovation courses for newcomers.
3. “We do on the job training and trial by fire.”
   • This is not necessarily a bad thing, but embedding core KSA’s early on will remove role ambiguity from newcomers to innovation. Innovation is inherently fuzzy. By providing clear instruction and training, newcomers to innovation will see reduced stress and higher commitment to the organization.(11, 12)
4. “We have a project charter, but we mostly write down objectives, not definitions.”
   • Companies are not writing clear and early product/project definitions.
5. “If we spend too much time training people they wouldn’t get any real work done.”
   • Considering most companies do not do innovation training, this may not be a big issue for the majority of large companies.
6. “We have too many innovation tools, we are tooled out.”
   • Take the time to systematically review your company’s innovation toolbox. Managers need to reduce the reporting burden of their employees; i.e. get out of their way! Let them innovate!
7. “We have so many processes and so many best practices; we just don’t have time to do innovation how it looks in the books.”
8. Companies are confusing Stage Gate with an entire innovation management system.
   • “Focusing too much on getting through gates keeps us from thinking.”
   • “We have 157 gates before commercialization”
9. Companies are confusing Project Management with Innovation Management
   • We train in project management via PMI institute. Project management is a critical KSA, but not innovation management.
10. Not understanding Voice of the Customer
    • Many assume this is a method for understanding articulated needs when it is actually for unarticulated needs.

What Findings Tell Us

These findings suggest that the R&D units of the biggest companies in the world are overwhelmed with innovation tools, lack the time to learn them, don’t have standard innovation metrics, and expect their employees to just “figure innovation out” in a trial-by-fire manner. Companies seem to be adopting portions of best practices on an ad-hoc basis to solve current problems in their innovation pipeline.

As a result, companies never build a systematic innovation process. These mingled together NPD best practices are rarely discarded and linger in the training / HR system for years, creating more and more confusion. It’s a real Catch-22. Companies don’t have time to use NPD best practices and train employees because their current collection of business processes and best practices keeps them from doing so.

One executive told me that a fix to an innovation system will only occur when the existing system is going down; i.e., when a whole business unit is failing! To quote, “It takes seismic shifts for a company to change their innovation process.” For example, “It takes months to change our policy on trip reimbursements; how would we ever change our innovation process?”

Implications for Management

Why do 70% of executives feel average in their capability to innovate, but still view innovation as a top priority? I would hate for this article to be the bearer of bad news, but innovation in large companies today is stuck in a purgatory of indecisiveness. In fact, as I was completing this article, I read of a study which has “collected a wealth of data that indicates a clear and troubling reality: Most business activity is slowing down, not accelerating … It’s just so hard to get stuff done.”(13)

It is clear that innovation training does not occur in the companies I interviewed. However, the real problem seems to be that large company innovation processes have deviated or mutated from a once strategy-driven approach to an ad hoc, Frankenstein-esque, hodgepodge of complexity. As companies grow, they seem to be good at adding new tools to their innovation process, but bad at deleting old ones.

My recommendation: Big companies should look to simplify their innovation process relative to their strategic goals; e.g., incremental innovations or disruptive innovations.

Without a strategy-driven innovation process, the question for future research becomes, how long can a company last with an overly complex and ad hoc approach to innovation? If there is any parallel to Mary Shelly’s Frankenstein, it would suggest that the monster—an ad hoc, non-strategic, innovation process—will eventually kill its creator; namely, the company.

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Tim Michaelis is continuing his research into innovation training at large R&D firms and IRI is assisting his efforts. If you are a member of IRI and are willing to contribute to his research, a short, 20-minute survey is available upon request. Please contact Lee Green (green@iriweb.org) for the link to the survey.

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References

1. https://www.bcgperspectives.com/content/articles/innovation_growth_digital_economy_innovation_in_2014/
2. McKinley, W., Latham, S. and Braun, M. “Organizational decline and innovation: Turnarounds and downward spirals”; Academy of Management Review39(1), 2014, pp. 88-110.
3. Freeman, S. J. and Cameron, K. S. “Organizational downsizing: A convergence and reorientation framework”; Organization Science, 4(1), 1993, pp. 10-29.
4. McKinley, W., Zhao, J. and Rust, K. G. “A sociocognitive interpretation of organizational downsizing”; Academy of Management Review 25(1), 2000;, pp. 227-243.
5. Bethel, J. E. and Liebeskind, J. “The effects of ownership structure on corporate restructuring”; Strategic Management Journal14(S1), 1993, pp. 15-31.
6. McKinley, W. and Scherer, A. G. “Some unanticipated consequences of organizational restructuring”;  Academy of Management Review25(4), 2000,  pp. 735-752.
7. McKinley, W., Latham, S., & Braun, M. “Organizational decline and innovation: Turnarounds and downward spirals.” Academy of Management Review, 39(1), 2014, 88-110.
8. Cohn, D’Vera and Taylor, Paul. “Baby Boomers Approach 65 – Glumly.” PEW Research Center Dec. 20, 2010. http://www.pewsocialtrends.org/2010/12/20/baby-boomers-approach-65-glumly/
9. Cooper, R. G. “The invisible success factors in product innovation”; Journal of product innovation management, 16(2), 1999; pp. 115-133.
10. Cooper, R. G. New products: What separates the winners from the losers and what drives success. The PDMA handbook of new product development 3-28, 2005.
11. De Vos, Ans, and Charissa Freese. “Sensemaking during organizational entry: Changes in newcomer information seeking and the relationship with psychological contract fulfilment.” Journal of Occupational and Organizational Psychology84, no. 2 (2011): 288-314.
12. Rousseau, Denise M. “The individual–organization relationship: The psychological contract.” (2011).
13. Monahan, Tom. “Revving Up Your Corporate RPMs”; Fortune Feb. 1, 2016, pp. 43-44.

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This is a lightly edited reproduction from the Center for Innovation Management Studies (CIMS) newsletter: https://cims.ncsu.edu/cims_newsletter/marchapril-2016/how-does-your-organization-train-its-innovators/

Related article: http://www.innovationresource.com/how-is-your-organization-training-innovators/