How to Create Pathways for Innovation in Your Organization

If anyone, anywhere in your organization, has a brilliant idea, how easily can you find it, recognize it, and make it real?

For most organizations, it’s not very easy. The typical employee can get blocked on the early step of getting a meeting with somebody who can help. Often, there’s no established way to bring up new ideas–instead, it is ad hoc and left up to luck and hustle. If that’s your situation, you need a plan to change that.

My post How to Maximize Impact from Your Hackathon stresses the importance of establishing pathways.  Your project teams need pathways to discover who they are, where they’re meant to go, and really what their project is. Creating these is a substantial endeavor that needs your attention.

This post covers which pathways to create and how to create them.   

In the last post, I asked, “WHY do you want a hackathon?” If you answered business value, then the follow-up question is, “What type of business value?”  Your answer will guide you to the right pathways to create.

Footnote: If your organization is not a business, such as a government agency or nonprofit, you may need to translate “business value” into something more fitting.

So, let’s begin with the new question.

What types of Business Value do you want?

First, identify what types of value you want to foster. From the many thousands of projects I’ve seen, four categories tend to cover the range. Each is relatively simple to identify, and the overall model doesn’t get too complicated.

Here are the four types and the approaches that they need:

1. New businesses need an incubation zone.
2. Incremental improvements need a sponsor, and it’s most effective to approach the sponsor with transparency and data.
3. Internal: culture, processes, and tools need support for change management and eventually a sponsor to drive and scale. Internal changes usually come in a bundle of culture, processes, and tools.
4. External projects need an external receiver and a culture in your company that supports these types of external relationships.

In most cases, these should meet your needs. However, you may feel yours isn’t listed. Still, I’ve seen the above approaches cover the gamut.

For instance, you may want to encourage new strategies or what Safi Bahcall calls S-type loonshots.  These can follow the same approach as either internal or incremental improvements. I recommend deciding this on a case-by-case basis, using the internal approach for strategic ideas that apply company-wide, and the incremental improvements approach if it aligns to a single focus area.

When you’re just starting, establishing one path is a great way to start. While you may want to add more, I encourage you to keep it lean and straightforward until you’ve nailed down the basics.

No matter the approach, it’s important to have allies and support. So, before we get into the specific methods, let’s take a look at sponsorship.

Sponsorship

For reliable impact, find sponsors, who can benefit a project in many ways.

Three of the most significant benefits from sponsors are funding, influence, and the ability to receive and run with the project after the de-risking phase. While you may find a sponsor who brings all three benefits, separating the roles lends flexibility to your program design.

The three roles of sponsorship are funders, influencers, and receivers.

• Funders provide resources like money, people, or positions to the project.

• Influencers lend their status and authority to help teams get connections and overcome obstacles.

• Receivers take on projects when they’re ready to leave incubation.

These roles are critical in larger organizations, and are often helpful outside of them, too.

Now, let’s dig in on the approach to the new businesses category.

New businesses

New business ideas are rare. They’re also as challenging to pull off as their potential is large. If your goal is to create these, be specific upfront, and provide training on how to think big. It’s quite common for hackers to miscategorize a lot of incremental ideas as new businesses. It’s also common for the most significant approaches to come from teams that don’t recognize what they have. So, it’s worthwhile to look at everything.

Ideally, these projects are the seeds of new products, services, or initiatives.  In the Three Horizons Framework, these are the Horizon 3 ideas and the more ambitious Horizon 2 ideas. These align with your mission, strengths, and values, and they create new growth opportunities beyond your existing operating units.

The most significant risk to these projects comes from the tendency to treat these like incremental innovations. These ideas are too rare to let that happen unless there’s a strong need to save an existing business. For now, let’s assume that’s not the case; otherwise, you probably wouldn’t be seeking new business ideas. Still, incrementalism is typical. It happens when execs apply a piece of the imaginative concept to address short-term needs. My colleagues refer to this as the gravitational pull of big businesses, which stems from quarterly incentives, not from evil or politics.

However, taking the longer view toward incubation and growth is often warranted. I encourage teams first to explore their new business potential and then only transition to the incremental improvement path when that is exhausted.

In Zone to Win, Geoffrey Moore, of Crossing the Chasm fame, recommends setting up an incubation zone for this. An Incubation Zone is a “home to experiments in disruptive innovation that are deliberately sequestered … [to create] viable options to catch the next big wave.”

An Incubation Zone will often act as the funder and initial influencer for the project.  It will support the project until it is ready to find a higher up sponsor, ideally the CEO, and a receiver who can take a successfully incubated business forward. 

In a future post, I’ll go into more depth on what I’ve found successful for such incubation projects. 

For incremental improvements, we use a few of these parts, but the approach is a bit easier.

Incremental Improvements

Incremental improvements often confront Not Invented Here (NIH) Syndrome, which you can remedy with transparency and data.  Essentially, experimentation and the friendship formula ala Mark Schafer and Marvin Karlin’s The Like Switch. 

The key to incremental improvements is to identify a receiver right away. You need to find what they want to learn and then develop and run experiments to learn those things. That’s critical to transfer it over eventually. A good receiver will also act as an influencer, and sometimes even fund some of the experiments. If finding funders per project is a burden, you may need to secure a budget so your program can fund the earliest experimentation.

Next, we will discuss how to create a pathway for internally-focused projects.

Internal: culture, processes, and tools

These projects focus inward on improving the company. Usually, these internal changes imply a change in culture. My favorite definition for culture is “the way things are done around here.” Consequently, the best solutions usually bundle a cultural element with suggested process changes, policy tweaks, and tooling changes.

More than anything else, these projects will rely on effective change management to make them happen. That’s needed to get the alignment and acceptance into the organization. John Kotter’s book Leading Change is a masterwork in this field, and the discussion on achieving this is indeed the life’s work of many.

A critical step for change management is to find allies with an organization that has shared goals. Allies can usually come from HR, Finance, or another corporate or productivity zone function. (The productivity zone is another concept from Moore’s Zone to Win framework). If you cannot find aligned allies, this kind of change management is nearly impossible, and that’s a red flag. Often people in those parts of the company have a lot more context than the hack teams, so it’s worth approaching them with open ears and a growth mindset.

For you, the innovation program leader, your best bet is to prepare. Build these relationships before they’re needed. Then when the right projects come, connect the best projects into these paths.

An approach to ensure alignment and partnership is to co-develop the event challenges with these partners. That way, they’ll be motivated to engage with the projects that rise to the top.

A final category worth mentioning is not about directly benefiting your business but instead helping a partner or cause.

External Value

Often an incredible idea will come up that’s a better fit for an organization other than your own.

These are the keys to doing this:

1. Have a culture that supports these external relationships.
2. Establish a receiver as early as possible.  It’s especially helpful to find an organization to move the project forward after incubation.

For instance, at Microsoft, we have a robust, decades-long culture of philanthropic passion. The amount of energy that people have to giving their money, time, and expertise to nonprofits is breathtaking. For our social good projects, we have a long-standing culture that supports giving and a requirement to establish a receiver relationship with a nonprofit first. We have a network with nonprofits to help the project teams do this and provide common legal frameworks and templates.

Of course, giving a proof-of-concept to an external organization is free-like-a-puppy, so the transition will need to account for long-term support.

All in all, those are four bird’s eye views on the pathways you can establish.

Conclusion / Call to Action

I hope that you found this useful. This post was a doozy to write because I kept diving too deep. By the end, I edited out large swaths of material, which means that there’s a lot more to write on any of these topics. Please comment on what you want to read about next.

In the meanwhile, I encourage you to pick a pathway, run your innovation event, and start moving projects forward.

Get started! Take a bias toward action; don’t wait until you have this all “figured out.” The only way to really learn what your organization needs is by doing it. Adopt a pilot project, solve for that one, then systematize that and move on.

Over time, you will build the pathways that your organization needs. As you get stuck, leave comments here–many of the other readers here have done many of these things and can offer their suggestions to you.

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This article is a piece of what I plan to share at the Lean Startup Conference. It’s held on October 23, 2019, in San Francisco, where entrepreneurs and innovators from around the world will be gathering to discuss the latest innovations in modern management. You can use the code “Essey2019” for a discount on registration. 

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