Cargo Cult Innovation

The common view by business analysts is that the overall failure rate for innovation initiatives within corporations is 80%. And the failure rate of individual investments by Silicon Valley venture capitalists is around 90%. That’s almost as bad as starting a restaurant!

There are many reasons for such a high failure rate – being technology driven instead of customer driven, selling when you need to learn, focusing on requirements rather than experiences, giving all the power to gatekeepers, naysayers and the fearful.

Now, the typical advice that innovation consultants usually provide when facing such a high failure rate, is that you should fail faster. They usually quote Thomas Watson, the founder of IBM, who said, “The way to succeed is to double your failure rate.”

I disagree with that position. It’s really like a running a record business… you want a machine that reliably generates hits, not lots and lots of experiments and flops. Artistic creativity requires the willingness to take chances, but at the end of the day, you’re judged on your hit rate, on how many of your albums succeed vs how many end up in the bargain bin.

I believe that it is possible to continuously improve your success rate, by making three fundamental shifts at your company, in terms of instilling an innovative culture of success.

The three shifts are: First, you need to shift your methodologies for product design, which most likely requires that you “gather requirements” by only asking customers what they want, and not by digging deeper to understand their tacit and unarticulated needs. Second, you need to make innovation measurable and manageable at your company, because you can’t fix what you can’t measure and this is the key to continuously increasing your success rate. And finally, you need to stop doing “cargo cult” innovation. Let’s address these one at a time, starting with shifting your  methodologies for product design.

Ethnography means seeing from true perspective

The first shift has to do with learning a new way to see. The top product development companies, like Apple, Sony & Nokia use a secret weapon called design ethnography. It’s about using techniques from anthropological expeditions, to detect disruptive product opportunities. It’s all about shifting the way you observe the customer, interview them, and more importantly to detect discrepancies between what your customers say and what they do, when you’re observing them.

I helped train and build one of the world’s first “enterprise services ethnography” departments at a major bank, which grew into one of that bank’s greatest success stories for generating customer insight.

Formulaic approaches to ideation, like TRIZ or other techniques, are useful but generally won’t work 100% of the time when it comes to uncovering disruptive opportunities – because innovation is actually an art, not a management technique.

Any art based on human skill, like learning how to paint with egg tempera, or learning how to play the piano, requires 5000 hours for the human brain to learn that skill. Ideation, the skill of creating ideas, is no different. Now, to be really good at painting or piano, you need to combine that skill with talent and inspiration… and even more hard work. There are no shortcuts to becoming a master of any art or skill.

One clue as to how to develop ideation skills is to look at how art schools teach students how to become artists. The first step is always teaching a new way to see. It may be through seeing negative space, or broadening the eye’s receptivity to color resolution, or seeing how any shape can be reduced into three color tones.

One of the great moments for a first time ethnographer is when s/he realizes that “innovation is suddenly seeing that something you thought was working, was actually broken, but you just couldn’t see it.” It’s like discovering a pocket of space-time hidden in the middle of your universe. This is only possible by becoming a trained ethnographer.

A dashboard from our Revolution innovation management system

The second shift has to do with learning how to manage innovation, so it’s really about learning how to see progress. The reality is that innovation and ideation are very difficult to measure directly. However, it is possible to develop metrics and waypoints that insure you’re on the right path. One is to simply capture and count ideas as they are being generated.

Once you understand the  pipeline for innovation within your organization, you can create waypoints along that pipeline. For example, the number of ideas that  are promoted to pilot. And then the number of pilots that are successful. And then the number of ideas that eventually made it all the way, and what kind of return they generated for the organization.

If you think about it, how could a project manager within your company be successful without certain tools that measure the progress of a project? How could accounting be successful without cost controls and reporting? In the same way, innovation management requires tools, metrics, controls and reporting. However, it has to be done in a way that does not stifle the underlying fluidity of the process.

There is so much more to talk about when it comes to an innovation resource management system. If you’d like to read more about our Revolution system, click here to download the brochure.

Finally, do you know what the cargo cult is? The classic period of cargo cult activity was during and after World War II in Polynesia. During the Pacific campaign, vast amounts of war supplies were air-dropped into these islands during the Pacific campaign. But at the end of the war, the airbases were simply abandoned.

During this time, the native islanders had become accustomed to these supplies, and really wanted the planes to return. So they went about constructing mock airstrips, and made radios out of coconuts and straw. They staged drills and marches, using twigs for rifles and painting “USA” on their bodies to make them look like soldiers. But no matter what they did, no planes ever came back.

I first heard about cargo cults during a talk given by Richard Feynman, about “Cargo Cult Science”. After studying a number of companies attempting to be innovative, I realized that many companies actually practice Cargo Cult Innovation.

A cargo cult in Micronesia

Like the islanders, Cargo Cult innovators use all the same buzzwords and expressions as true innovation… but when the chips are down, they’re usually the ones who put the NO in innovation. The harsh reality is that many companies fail when management entrusts innovation into the hands of people who have learned how to survive by the expert application of politics, the  rewarding of ego and empire-building, and the requirement of top-down control.

The position of Innovation Czar is a very sexy and desirable job for any executive, so it’s going to attract both the truly innovative as well as the cargo cult innovators. Usually, after the cargo cult innovation process fails to produce results, the organization can simply say, “hey, we tried and it didn’t work, so can we kill this innovation thing now and get back to work?”

In other words, the third shift is learning how to see reality when it comes to your own managers. Putting anyone politically motivated in charge of innovation will be the kiss of death to your initiative. The essence of true innovation is that it comes from the heart, so you need someone who has a lot of heart and empathy. You need to entrust innovation to someone within your firm who is willing to swing for the fences, who is willing to take chances.

Therefore, look for someone who is brilliant, but at the same time, humble. Look for someone who naturally uses the word “yes” more than “no”. Look for someone who believes in the potential of the human spirit, and instills confidence in his reports. Look for someone with true courage, who would be a good man in a storm. Look for someone who actually listens carefully, when anyone speaks… not just the boss. You know, someone like Barack Obama.

For innovation to be successful at your company, these are the first three steps to take. Specifically – (1) establish an ethnography training for your product developers, (2) install and pilot an innovation management framework, and finally, (3) pick the right manager to lead the innovation initiative.

There’s a lot more you have to do, but this would make for a terrific start!