How companies kill innovation

My new book post on Safari is up:

Why So Few Innovation Efforts Pay Off and What You Can Do About It

 

Posted May 19, 2015 by Safari Books Online & filed under Business, communication, execution, innovation, leading teams, management, managing people.

 

By Theodore Kinni

Theodore Kinni has written, ghosted, or edited more than 20 business books. He was book review editor for strategy+business for 7 years.

 

Companies spend a lot of money on innovation. According to an annual study by PwC Strategy&, the top 1000 corporate R&D spenders invested $647 billion in their quest for innovation in 2014. That’s more than the individual GDPs of all but the 30 most prosperous countries in the world.

 

Given this level of spending, I assumed that these companies—the so-called Global Innovation

1000—were getting a pretty hefty return on their investment. But I was wrong about that: Year after year, Strategy& reports that there is “no statistically significant relationship between sustained financial performance and R&D spending” among these enterprises.

That didn’t make a lot of sense to me, until I realized that the lack of correlation probably wasn’t between innovation spending and corporate success as much as it was between innovation spending and innovation success. Unless your R&D spending actually generates some kind of commercially viable innovation, it’s not going to translate into financial performance, is it?

To see why companies might not be getting much of a bang for the big bucks that they spend pursuing innovation, it’s well worth taking a look at Creative People Must Be Stopped: 6 Ways We Kill Innovation (Without Even Trying) (Jossey-Bass, 2012), by David A. Owens. In the book, Owens, a professor at Vanderbilt University’s Owen Graduate School of Management and consultant, points out that corporations often provide surprisingly unfertile fields for innovation because of six different and increasingly challenging kinds of constraints: individual, group, organizational, industry, societal, and technological. (As if the six constraints aren’t enough, there are multiple pitfalls within each category.)

Any one of the six constraints can kill innovation efforts dead, so you should get to know all of them (and you can take this survey to find out which ones you or your company might be particularly vulnerable to). But the first two—individual and group—are particularly relevant for frontline and middle managers who are trying improve the innovation results of their teams...read the rest here