Tuesday, May 18, 2010

The House of Innovation

The third meeting of the WSAE Innovation Task Force was held on May 14, 2010. For those of you new to this conversation, I'm heading up an effort for my state society to define an evidence-based model of innovation for the association community. Inspired by the dedicated, defined and resourced “innovation function” that exists in many for-profit companies, we are examining a series of case studies that profile these processes. I'm also blogging about it here. By examining the principles of innovation successfully employed by the organizations profiled we hope to identify practical strategies for applying those principles to the association environment.

We had a special phone-in guest speaker at our May 14 meeting—Brian Christian of Inovo LLC—a former vice president of global business development at Whirlpool who now, as a partner in an innovation consulting company, has spent some time trying to adapt his successful “for-profit” innovation strategies for associations. I asked him to share with the task force the principles of innovation he has found to be successful in the for-profit sector, and to describe some of the barriers to adoption he has encountered with associations.

The House of Innovation

Brian’s key point could be summarized as this—successful innovation in any organization requires a sustained commitment amongst a group of key people over a long period of time. He suggested we think of innovation as a house.
It starts with the leadership of the organization—the over-arching roof of the house—because pursuing innovation often entails changing the very culture of the organization. This change must be “driven” by the leadership. They must embrace it, advocate for it, and resource it appropriately. It cannot be driven from the middle of an organization, because any innovation that does not have the support of the organizational leadership is doomed to fail when it seeks the resources it needs to get off the ground. A commitment must be made at the very top of the organization to create an innovative organization, and a series of appropriate decisions must then follow.

The first of those decisions is strategy—the upper story of Brian’s house. The leadership must define an innovation strategy for the organization. It must define precisely where innovation will happen (in product development, customer service, etc.), what risks are acceptable and unacceptable in each of these areas, and how success will be measured. These parameters are essential and must be clearly communicated, because it is through these parameters that leadership begins to hold the rest of the organization accountable for innovation.

And it’s the rest of the organization that makes up the lower level of the house. They must make innovation happen, but the leadership must continue to help them. Based on the strategy defined, the leadership must develop a process for innovation, leveraging resources inside and outside the organization as needed, it must recruit and promote staff with the right skills for innovation, and it must make changes to the organizational structure to help facilitate the process it has put in place. The organization operates in these three rooms on the lower level of the house, continually checking their progress with the strategy and the leadership that lives above them.

Association Barriers to Innovation

Brian then identified for us what he saw as barriers to adopting this model of innovation in the association market. He stressed that these barriers are not unique to associations—many for-profit organizations have them, too—but they do seem more prevalent in the association world.

1. Diffuse leadership. Far and away, the biggest barrier Brian encountered was a lack of leadership commitment to innovation, and he cited an association’s regular, term-limited turn-over of Board members and consensus-based decision making style as two of the biggest culprits here. Many in the association sector have found ways to sustain long-term strategic initiatives over the terms of multiple Board chairs, but it often requires a great deal of effort and stakeholder agreement to make it happen. The task force speculated that such strategies could be used to develop a long-term commitment to innovation, but Brian felt that the very need for these strategies could belie the inherent nimbleness of decision-making and action that innovation requires.

2. Low tolerance for risk. Many associations approach risk from a decidedly conservative perspective. The need for change must be clearly documented and then trial-ballooned and focus-grouped with numerous stakeholders before it can get off the ground, and then it often has to navigate a minefield of existing programs and sacred cows in order to compete for funding. Brian felt that what organizations often deem as normal due diligence procedures—financial analyses and projections—can prematurely kill most innovative ideas. At the front-end of innovation, when concepts are not fully formed, it can be dangerous to create financial projections of expected return on investment. The phrase he has heard used is "precision exceeding accuracy"—creating the illusion of a known financial outcome where, in fact, none exists. Once such estimates are made, they can take on a life of their own and are often difficult to eradicate. Furthermore, the perceived “price of failure,” in terms of the potential loss of power and influence within an association hierarchy, was also seen as too high to attract the necessary champions for innovative ideas.

3. Insufficient resources. To be successful, Brian argued that innovation must be resourced within an organization, and many associations have budgets they either perceive to be too small to allow for such an investment, or which are already overstretched into dozens or hundreds of association programs and activities. In discussion with Brian, the task force felt it was important to stress, however, that this appears to be a barrier with regard to the allocation of resources, and not fundamentally about their availability.

Brian believes successful innovation ultimately doesn’t depend on the size of your budget or the size of your organization. Size sometimes brings with it deeper pockets and the ability to allocate resources to a dedicated innovation function, but size also sometimes brings with it bothersome bureaucracy, which can be an impediment to the efficient identification and use of innovative ideas. If we were to chart organizations of different types against these factors, we would see that very few fall in the “innovation sweet spot.”
Essentially, innovation works when you streamline decision-making and increase the resources dedicated to the process.

Potential Association Advantages

The task force felt that one area of advantage associations may have when pursuing innovation was their ability to tap into the “voice of the customer” often required to drive successful innovation decision making. Brian helped us expand this idea, categorizing it more as the “mind of the community”—something an organization captures not just by asking their customers what they want but by understanding their customers’ needs (even when they do not) and the role played by other constituencies in influencing the adoption of new ideas and programs. Many associations, with their networks of stakeholders in particular industries and professions, may already have systems in place to describe and utilize the “mind of their community.”

Next Steps

The task force very much appreciated Brian’s willingness to donate his time and share his perspective on innovation. Based on his feedback, and on the case studies the task force has previously explored, we decided our next task should be to draft a white paper on innovation for the association community. The paper will describe the key principles that must be embraced in order to create a successful innovation function in an association, and begin to provide some practical strategies for associations to consider in adopting them. Some consideration was also given to the idea of using this white paper to create an assessment tool for associations to use in determining their “innovation readiness” and putting themselves on a pathway towards an innovation culture.

A draft of this white paper will be prepared and discussed at the next meeting of the WSAE Innovation Task Force, tentatively scheduled for July 16.

I encourage all interested readers of The Hourglass Blog to participate in this process with us. Your thoughts and comments are welcome, as well as any suggestions you might have for the principles of innovation and/or strategies for adoption to include in the white paper.


Post a Comment