The Paradox of Managing Innovation

”Our organization wants to work in a more customer-centric way. We feel we need to innovate more.”

When we start working with clients, this is often our starting point. How do we shift ways-of-working to spend more time understanding customers and solving their challenges in unique ways? We’re digging into and starting to change the “way things get done” in organizations, sometimes referred to as “culture”.

I spend a fair amount of my work day training, teaching and coaching people to use design thinking and service design. My team and I typically work with teams of people working on real projects at work. The employees learn and try, in real time, design tools and processes in order to achieve organizational goals.

It’s clear to everyone working through this process that their organization is asking them to change. They need to work with new tools, collaborate with new people, try out new processes, and engage more with people outside of the organization (customers). It’s not always easy. It takes time, often, to internalize the experience and the learnings.

It always amazes me to see the energy, passion and drive of the people I train. Even if we’re asking them to take a leap, they leap. Far. For most, not all, once you engage with the design process, with real people, real customers, to develop new or innovative solutions, it feels hard or even depressing to go back to the old way of working.

Change involves taking a risk. It means letting go of what you’re used to. It means that you’re willing to learn something new, willing to be wrong once in a while, and willing to embrace a level of uncertainty.

When we introduce a design-driven way of working to help organizations change and innovate, we find that most employees are willing to take that risk.

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We see this happening as employees get further into a customer-centric way of working.

Managers and leaders, on the other hand, are quite often a different story. Note that all of the employees who go through this new training only do so because a manager or leader has made a decision to do so. Typically, that comes from some type of strategic initiative made at upper levels of an organization. The message of the initiative is that the organization needs to change, meaning that employees and staff need to change the way they do their work.

And yet…moving an organization toward customers and innovation means a move toward perceived uncertainty and perceived risk. We don’t know beforehand what a solution will look like exactly until we’ve spent time with customers understanding them and then testing our ideas and prototypes with them. It’s uncertain what the end will look like. That feels very risky.

Most managers manage to produce predictable results, on time and on budget. There is an expected and agreed upon output. Sure, there’s some variation along the way. But they give their team a task and expect them to deliver. Most managers have these expected deliverables built into the way an organization evaluates and rewards them. Their goal, understandably, is to reduce risk to an absolute minimum in order to deliver a maximum expected return.

What happens if you’re now asked to manage a team engaged in “innovation”? Again, most managers translate this into “OK, the team will work a little differently, but they will deliver what I expect with some slight variation.”

And of course, this isn’t what happens at all. The teams engage in a very different, people-driven process to deliver something unexpected that delivers results at a higher level, one that creates greater value for the customer and organization. It is typically outside of the managers box, both comfort-wise and imagination-wise.

For employees to succeed at these innovation initiatives, they need, demand even, the space to innovate and design, to learn, test, and improve. They need room to improvise. They need approval to take risks.

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Damien Newman’s “design squiggle” — what the process often looks and feels like.

Herein lies the Paradox of managing innovation.

If we want managers not to take risks and to work toward expected results, how can we expect them to manage innovation teams who do the opposite?

The reality is that most can’t. The elephant in the room is that managers and leaders can’t expect people in their organization to change if they themselves are unwilling to change. “Do what I say and not what I do” is hopelessly outdated, a 20th century management philosophy out of touch with our 21st century needs.

No wonder so many people experience what Alf Rehn calls “innovation fatigue.” It’s exhausting giving your all to do something new and important only to face misunderstanding and lack of support.

There is hope. One thing we can all do is to rethink our approach to innovation initiatives and capacity building by requiring managers and leaders to go through design or innovation training at the same time as their employees. The training isn’t the same: employees need to know how to work while managers and leaders need to know how to support the new work. Luckily, management and leadership training isn’t rocket science, it’s human science (sometimes we call this “common sense”).

It will help if the manager’s goals and evaluations shift away from strictly predictable units of deliverables. If organizations want leadership to change, they also have to evolve their incentive and reward structure.

I long to see managers having the same drive and enthusiasm in change projects that I see in the employees I train. Their passion is contagious! And yet internal immunity exists. When we develop a vaccine against that resistance, we solve the paradox of managing innovation.

(A side note on risk: the design process actually reduces and mitigates risk. It makes a series of small steps where we can assess the risk earlier and cheaper. In typical projects, and we see this a lot in digital transformation initiatives, we can spend lots of time and money before realizing that we’re barking up the wrong tree. The design process, on the other hand, gives us the opportunity to shift quicker and earlier to make sure we do it right, or stop doing it if it is completely wrong. IBM has quantified that in this report.)

Design Director and co-founder of Savvy Design Collaborative, design-driven entrepreneurship at YALI Dartmouth, VPR commentator, now playing in Sweden.

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