Championing innovation in your organisation is an increasing expectation of leaders – to nurture both talent and opportunities. In an increasingly digital and data driven world, how do you best lead for innovation and make decisions which are commercially savvy while enabling the seeds of innovative opportunities to flourish?
In this article, I outline four elements I’ve seen work in practice and which are important when leading for successful innovation. Fundamentally, this is about reducing the risk and uncertainty of innovation opportunities through best practice, making it easier to spend time and money on them. Some of the approaches and mindsets compliment but are different to leading for BAU, so it is good to be aware of the distinctions when it comes to leading for innovation.
1. Spotting opportunities
There’s an infinite range of potential innovations that you could lead or sponsor. To identify which ones to go after, it is helpful to calibrate where a particular opportunity sits on an innovation scale. McKinsey’s three horizons of innovation is a useful framework and will inform the type of sponsorship and support you need to give when nurturing a particular idea. Horizon 1 opportunities relate to current markets and typically a more mature capability; Horizon 2 opportunities link to adjacent markets and emerging capability; and Horizon 3 opportunities are about new markets and next generation capability. It is likely that most innovation ideas you will sponsor sit in the low risk or uncertainty categories (Horizon 1 and some Horizon 2) where you are able to democratise the innovation and where you should expect to fast scale or fast fail. A minority of ideas may fall into the low volume/high risk or uncertainty categories (top end Horizon 2 and Horizon 3) where they are increasingly disruptive and there is more uncertainty. These typically take longer to work through and there is a longer-term mindset required. It can be helpful to determine the balance of innovative ideas in your portfolio across the three horizons so that you have clear expectations from the outset.
2. Nurturing opportunities
You have a key role to nurture promising opportunities. As ideas progress through regular decision gates (unless they go down the fail fast route – see below), you should be prepared to give them the resource and support that they need. This could be more time, more colleague/partner support, or more budget to proceed. Your mindset should be an experimental one, being prepared to explore different possibilities and encouraging colleagues to carry out small experiments to test key assumptions. Be passionate about the idea but hold the potential solutions lightly as these may change. Resource, be it people or budget, should be provided based on scarcity – too much of either could swamp the opportunity or lead to suboptimal outcomes – keep it lean and only increase where the promise of the idea supports it. It is important to recognise that ideas can take time to bear fruit, particularly if they relate to markets that don’t currently exist at scale. Make sure that the governance you put in place is appropriately ‘light touch’, particularly in the early stages, to ensure that innovative ideas don’t get stopped in their tracks.
3. Making decisions
One of the biggest inhibitors to successful innovation progress is innovation by committee. Often this is confused with or defended as stakeholder management. Leading for innovation is about being decisive and making decisions about whether to continue with an idea or not. You should be clear from the off whether yourself or someone else is the sponsor who will be making these decisions. Remember that making a decision is progress compared with indecision, which only wastes time and money. Be prepared for a pace of activity which requires regular decision making at key decision gates. Processes such as Ninety’s 123 Framework can be followed to both develop and de-risk opportunities.
4. Failing fast
Integral to decision making is the notion that innovative ideas may not proceed but be failed by you as a sponsor at a decision gate. This can be counterintuitive in organisations and cultures where ‘failure is not tolerated’ and success is a ‘given’. If this resonates with you, I’d encourage you to reframe this for yourself and for your organisation. When innovative opportunities are first being developed, the value is in the learning. Those initial learnings will identify what is promising about the idea and where the ‘watchouts’ are. We must be ready to fail fast if the evidence tells us it’s the right thing to do. If an idea is failed for clear reasons, then there is an opportunity cost which has been saved and those learnings should be shared across the organisation to avoid repeating at a future time. Your role in leading this decision should be congratulated and a combination of mindset and process can give you the confidence to do so.
Finally, a word on leadership approaches when it comes to innovation. I encourage a human leadership approach when it comes to innovation – to bring your whole self to the process and be clear on your own motivations and those of others. Use your intuition and be clear when you need to get close to an idea as sponsor to nurture, support and challenge it (always with a coaching style), and when you need to get out of the way and let the idea incubate and develop before your next engagement or intervention. Be open to collaboration, both across your organisation and with external partnerships – you may not know where the capability gaps are until you discover them. And remember that if the problem is large enough, there will be value in it and your role in sponsoring and leading ideas to solve the challenge could well benefit you, your colleagues, customers, and wider stakeholder for years to come. Good luck!
Ninety partners with insurance organisations to give support to leading for innovation through skilling and equipping leaders and teams. If this article has resonated with you and you’d like to explore further, please do get in touch and we’d welcome the opportunity to discuss with you.