What Next? Sustaining Innovation

Presentation structure Defining the innovation challenge Identifying the most common obstacles to ongoing innovation Providing some useful tools to overcome obstacles and introduce and support ongoing innovation

Defining the innovation challenge

Identifying the most common obstacles to ongoing innovation

Providing some useful tools to overcome obstacles and introduce and support ongoing innovation

What this presentation is not about Quick fixes or simplistic solutions: 7 Habits of Highly Effective Crustaceans 6 Sigma for Simians

Quick fixes or simplistic solutions:

7 Habits of Highly Effective Crustaceans

6 Sigma for Simians

What this presentation is about It is the result of my research to answer a question: Why does an industry so reliant on discovery (the ‘ what if? ’ question) not always innovate at later stages of business? Why do we so often get stuck on the ‘ what next ?’ question? My answers focus more on leadership creating the conditions for an innovation environment than on managing processes

It is the result of my research to answer a question:

Why does an industry so reliant on discovery (the ‘ what if? ’ question) not always innovate at later stages of business?

Why do we so often get stuck on the ‘ what next ?’ question?

My answers focus more on leadership creating the conditions for an innovation environment than on managing processes

What if?

What if? What if we excited the protons in your body with a giant magnet and then took a picture? Magnetic resonance imaging (MRI) Thanks Sir Peter Mansfield and Paul Lauterbur!

What if we excited the protons in your body with a giant magnet and then took a picture?

Magnetic resonance imaging (MRI)

Thanks Sir Peter Mansfield and Paul Lauterbur!

What if?

What if? What if we used the spit of a Gila Monster, a venomous lizard, to treat type 2 diabetes? Byetta (exenatide)

What if we used the spit of a Gila Monster, a venomous lizard, to treat type 2 diabetes?

Byetta (exenatide)

What next? Innovation often declines after the first ‘big idea’ Routine sets in as we shepherd the big idea through trials and approvals The inevitable question is what to do next to capitalize on the innovation Put another way – how can we be innovative in other aspects of the business in order to maximize return on the original innovation?

Innovation often declines after the first ‘big idea’

Routine sets in as we shepherd the big idea through trials and approvals

The inevitable question is what to do next to capitalize on the innovation

Put another way – how can we be innovative in other aspects of the business in order to maximize return on the original innovation?

A step back – what is innovation? Literally means ‘to make new’ A new idea or combination of ideas that challenges the present order If efficiency is doing better what is already being done then innovation is doing what is not yet being done or doing it in a new way Drucker says it is the “instrument of entrepreneurship” Innovation is not measured by the discovery of some truth but by ‘performativity’ – usefulness

Literally means ‘to make new’

A new idea or combination of ideas that challenges the present order

If efficiency is doing better what is already being done then innovation is doing what is not yet being done or doing it in a new way

Drucker says it is the “instrument of entrepreneurship”

Innovation is not measured by the discovery of some truth but by ‘performativity’ – usefulness

Hold on a minute… 1 st objection: our work has no room for innovation Things like drug submissions are very rigorous – the devil’s in the details We need to focus on getting it right We can’t risk screwing it up Even in routine work there is room for innovation

1 st objection: our work has no room for innovation

Things like drug submissions are very rigorous – the devil’s in the details

We need to focus on getting it right

We can’t risk screwing it up

Even in routine work there is room for innovation

Wait a minute… 2 nd objection: we’re not creative types – we outsource that We don’t do innovation, intuition or creativity Everyone has at least one creative bone in them You may have put them away in order to do ‘serious work’ but you can get your crayons back Originality is over-rated “ The secret to creativity is knowing how to hide your sources” – Einstein The GETS principle

2 nd objection: we’re not creative types – we outsource that

We don’t do innovation, intuition or creativity

Everyone has at least one creative bone in them

You may have put them away in order to do ‘serious work’ but you can get your crayons back

Originality is over-rated

“ The secret to creativity is knowing how to hide your sources” – Einstein

The GETS principle

Back to our science roots Innovation isn’t always a blockbuster idea Go back to how scientists work - tinkerers Little bits put together in new ways, building on the work of others Continuing innovation in even the little things is beneficial Be more ‘sciency’

Innovation isn’t always a blockbuster idea

Go back to how scientists work - tinkerers

Little bits put together in new ways, building on the work of others

Continuing innovation in even the little things is beneficial

Be more ‘sciency’

Thank you Frederick Taylor Father of time/motion studies and management engineering Did wonders for efficiency but absolutely nothing for innovation In time processes ossify Routine murders innovation Leads us to an important distinction – management focuses on keeping a system functioning; leadership focuses on nurturing innovation

Father of time/motion studies and management engineering

Did wonders for efficiency but absolutely nothing for innovation

In time processes ossify

Routine murders innovation

Leads us to an important distinction – management focuses on keeping a system functioning; leadership focuses on nurturing innovation

The reaction to routine ‘ Creative destruction’ ‘ Disruptive innovation’ Not just for anarchists anymore New ideas kill old ones

‘ Creative destruction’

‘ Disruptive innovation’

Not just for anarchists anymore

New ideas kill old ones

Disruptive innovation All innovation is corrosive to routine Q1: How much chaos can you take? Q2: How can we introduce innovation and still preserve the fabric of the organization? Fear sparked by these 2 questions often quashes innovation – continuity of the organization trumps change The shock of the new can make us put the brakes on innovation

All innovation is corrosive to routine

Q1: How much chaos can you take?

Q2: How can we introduce innovation and still preserve the fabric of the organization?

Fear sparked by these 2 questions often quashes innovation – continuity of the organization trumps change

The shock of the new can make us put the brakes on innovation

Obstacles to ongoing innovation

Risk aversion What’s the missing word? Risk/_________

What’s the missing word?

Risk/_________

Risk aversion We forget the reward part of the equation Tendency to catastrophize – overweight the bad Poor judges of risk (absolute and relative) Test: which animal kills the most people? Snakes Dogs Mountain lions Deer Sharks Try asking – what’s the upside potential?

We forget the reward part of the equation

Tendency to catastrophize – overweight the bad

Poor judges of risk (absolute and relative)

Test: which animal kills the most people?

Snakes

Dogs

Mountain lions

Deer

Sharks

Try asking – what’s the upside potential?

Answer D

Joint-decision trap When we get together to make a decision we opt for the least risky option Group-think is often lowest common denominator thinking Impedes innovation

When we get together to make a decision we opt for the least risky option

Group-think is often lowest common denominator thinking

Impedes innovation

Cult of the org chart We often see the org chart as a permanent fixture, to be defended It is a representation of the organization at a specific moment in time – it is fluid An org chart is no more the organization than a bark is a dog

We often see the org chart as a permanent fixture, to be defended

It is a representation of the organization at a specific moment in time – it is fluid

An org chart is no more the organization than a bark is a dog

Indeterminacy Not knowing what the results will be is profoundly disturbing in a goal-oriented culture Ambiguity is destabilizing (a good thing, ultimately, but disturbing) “ Creativity requires the courage to let go of certainties” – Erich Fromm

Not knowing what the results will be is profoundly disturbing in a goal-oriented culture

Ambiguity is destabilizing (a good thing, ultimately, but disturbing)

“ Creativity requires the courage to let go of certainties” – Erich Fromm

Closed planning Innovation is something created by an inner team (probably with a bunch of consultants) and unleashed on the (unsuspecting) rest of the organization

Innovation is something created by an inner team (probably with a bunch of consultants) and unleashed on the (unsuspecting) rest of the organization

Not playing to your strengths We often expect the same level of creativity from different people in the organization, regardless of their actual abilities

We often expect the same level of creativity from different people in the organization, regardless of their actual abilities

Accepting assumptions Unchallenged biases obstruct innovation Ideas bring frames of reference with them “ Don’t think of an elephant” (George Lakoff)

Unchallenged biases obstruct innovation

Ideas bring frames of reference with them

“ Don’t think of an elephant” (George Lakoff)

Silos We often assume that learning in one area of the organization is not applicable in another Or we assume ideas will move through the organization through some miracle of osmosis Or we just don’t tell anyone in any organized way about our innovation cultivation plans

We often assume that learning in one area of the organization is not applicable in another

Or we assume ideas will move through the organization through some miracle of osmosis

Or we just don’t tell anyone in any organized way about our innovation cultivation plans

Misalignment & mis-measurement Organizational practices like HR don’t align with innovation objectives or expectations For example – no real rewards for risk-taking We don’t measure innovation activity and communicate our results to the organization at large… or we measure the wrong things (successes, for example, rather than total innovation activity)

Organizational practices like HR don’t align with innovation objectives or expectations

For example – no real rewards for risk-taking

We don’t measure innovation activity and communicate our results to the organization at large… or we measure the wrong things (successes, for example, rather than total innovation activity)

Ways to cultivate ongoing innovation

Put a fence around the innovation process If innovation doesn’t serve the vision and strategy of the organization then it is just a bunch of cool ideas Putting limits around the innovation process prevents digressions into less useful fields

If innovation doesn’t serve the vision and strategy of the organization then it is just a bunch of cool ideas

Putting limits around the innovation process prevents digressions into less useful fields

People People are not stupid – most in this sector have advanced degrees People choose organizations based on their own comfort with risk and volatility – some go for large pharma companies, some for tiny biotechs Work with what you’ve got Be honest when assessing your innovation capability

People are not stupid – most in this sector have advanced degrees

People choose organizations based on their own comfort with risk and volatility – some go for large pharma companies, some for tiny biotechs

Work with what you’ve got

Be honest when assessing your innovation capability

People Many ways to sort innovation capacity Revolutionaries – will take risks, have ideas Dissidents – have ideas but less likely to move on them; easily rallied Silent supporters – will get behind innovation once initiated Eeyores – immovable obstacles

Many ways to sort innovation capacity

Revolutionaries – will take risks, have ideas

Dissidents – have ideas but less likely to move on them; easily rallied

Silent supporters – will get behind innovation once initiated

Eeyores – immovable obstacles

People Revolutionaries – 5% Silent supporters – 60% Eeyores – 15% Dissidents – 20%

The environment Creating a supportive environment for innovation is possibly the most important leadership task It is about creating the conditions for innovation, not about some idiot-proof ‘9 steps to earth-shaking ideas’ process If you do build innovation structures, remember they are meant to be provisional – they should be torn down when they have outlived their usefulness Use external resources to refresh innovation environment or accelerate innovation

Creating a supportive environment for innovation is possibly the most important leadership task

It is about creating the conditions for innovation, not about some idiot-proof ‘9 steps to earth-shaking ideas’ process

If you do build innovation structures, remember they are meant to be provisional – they should be torn down when they have outlived their usefulness

Use external resources to refresh innovation environment or accelerate innovation

Innovation structures Expand mandate of existing training & development teams in HR Create innovation advisory group internally to nurture and evaluate innovations Build an innovation incubator with the capacity to take innovations, develop them and sell them to senior management (or hire someone to do it) Establish a fund or access to resources to enable people to autonomously develop their innovations (and give them the time to do so) Let everyone know what you are doing

Expand mandate of existing training & development teams in HR

Create innovation advisory group internally to nurture and evaluate innovations

Build an innovation incubator with the capacity to take innovations, develop them and sell them to senior management (or hire someone to do it)

Establish a fund or access to resources to enable people to autonomously develop their innovations (and give them the time to do so)

Let everyone know what you are doing

The Ebola example Highly contagious Remains highly virulent Spread the infection of your innovation throughout the organization – as far as possible with maximum effect

Highly contagious

Remains highly virulent

Spread the infection of your innovation throughout the organization – as far as possible with maximum effect

Openness Looping in with stakeholders and customers – knowing what their challenges and perspectives are can spark innovation Open innovation – most successful model is Lilly’s Innocentive (now spun off) a virtual network of problem solvers working on challenges – 30% success rate P&G also notable for linking in all employees globally to shared knowledge base Can be replicated on smaller scale

Looping in with stakeholders and customers – knowing what their challenges and perspectives are can spark innovation

Open innovation – most successful model is Lilly’s Innocentive (now spun off) a virtual network of problem solvers working on challenges – 30% success rate

P&G also notable for linking in all employees globally to shared knowledge base

Can be replicated on smaller scale

Make time for innovation If you don’t schedule it, it’s not going to happen 3M is legendary for its 15% rule – employees can spend 15% of their time on innovative projects of their own design This requires 2 leadership traits – a light hand in oversight and trust

If you don’t schedule it, it’s not going to happen

3M is legendary for its 15% rule – employees can spend 15% of their time on innovative projects of their own design

This requires 2 leadership traits – a light hand in oversight and trust

Solution looking for a problem problem  universe of possible solutions  best solution solution  universe of possible problems  best fit

Solution looking for a problem We do this all the time in drug discovery UK 92-480, an NCE developed by Pfizer’s UK R&D facility Proved unsatisfactory treatment for hypertension and angina pectoris, its intended problems, but stimulated erections

We do this all the time in drug discovery

UK 92-480, an NCE developed by Pfizer’s UK R&D facility

Proved unsatisfactory treatment for hypertension and angina pectoris, its intended problems, but stimulated erections

Fight inertia Inertia – things like to keep on doing what they’re already doing… even if it’s nothing Reward success Reward failure Do not reward inaction Rationale: support risk-taking environment, spur activity, fuel forward momentum

Inertia – things like to keep on doing what they’re already doing… even if it’s nothing

Reward success

Reward failure

Do not reward inaction

Rationale: support risk-taking environment, spur activity, fuel forward momentum

Shorten the failure cycle Accept failure – it’s not catastrophic (usually) Try to fail faster Failure will appear as routine by-product of innovation Capture and share learnings from failure not

Accept failure – it’s not catastrophic (usually)

Try to fail faster

Failure will appear as routine by-product of innovation

Capture and share learnings from failure

Sell the innovation “ Nothing happens until something gets sold” – Bob Metcalfe, founder, 3Com Innovation needs take up in order to thrive Informal and formal opportunities need to be created to sell ideas internally

“ Nothing happens until something gets sold” – Bob Metcalfe, founder, 3Com

Innovation needs take up in order to thrive

Informal and formal opportunities need to be created to sell ideas internally

Some ideas Build and launch an ongoing innovation team, best if embedded in the front-line business units Create ways to reward innovation generation – praise and recognition work! Establish channels to communicate innovation vision and support across the organization and to sell it to decision-makers Capitalize on social networks Re-connect with your science roots

Build and launch an ongoing innovation team, best if embedded in the front-line business units

Create ways to reward innovation generation – praise and recognition work!

Establish channels to communicate innovation vision and support across the organization and to sell it to decision-makers

Capitalize on social networks

Re-connect with your science roots

Paul McIvor 416.516.7095 416.906.1276 C [email_address] 179 Fern Avenue Toronto, ON, Canada M6R 1K2 Contact