Ahead of our R & D Innovation Summit in Chicago on March 21 & 22, we had the chance to speak with Tom Culver, Senior Innovation Advisor – Lead, Open Innovation Strategy, at RTI International, about what it means for a company to be innovative.
Tom Culver is a senior member of the Innovation Advisors group at RTI International, a leading global non-profit research institute. He has extensive innovation management experience combined with industry experience in advanced technology and product development. For over 18 years he has delivered innovation advising and insights research solutions for dozens of Fortune 500 companies and large government clients (e.g. NASA, NIST). He has developed, organized, and taught nationwide workshops on breakthrough innovation, technology scouting and market intelligence, in addition serving as an invited speaker on innovation management topics.
Innovation is so many things to so many people, so what would be your definition of innovation?
Wow which one do you want?
I know I'm asking a very broad question!
The way I look at it, innovation is doing something new that brings demonstrated or acknowledged value to somebody else. And until it has value to somebody else, it's really not innovation.
So is there a particular process or a structure that you like to implement?
You know what, our point of view on innovation at RTI is that there is no one right process. There's points of view that we have about what it takes to do innovating well, and what are some of the moving parts. But, I think this is one of the challenges: people have tried to come up with so many different definitions of and processes for innovation - in part, because every organization has unique challenges. So they're going to draw on a different range of approaches that are appropriate to the industry sector that they're in, the cadence that they have in their sector. Clearly, people innovating in the software space are at the other end of the cadence spectrum from those in pharmaceuticals. So to assume that you can use the same process and approach to innovating in these different kinds of realms is proven to be problematic.
We think that good innovating is built on competencies as opposed to being based on a process. Every organization needs to draw upon tools and techniques for the appropriate stage of their innovation lifecycle, as well as being based on their strategy and the organizational structures that they have. This is part of what I'll be talking about. For me, it's a shift away from being 'knowers' - knowing how go do things and go solve problems - to adopting more of a 'learners' mindset - to go out and constantly be learning about what's coming next. It's also about being able to team well with other people across the organization. To communicate that good decision-making and good creation. So learning, teaming, deciding, creating and communicating are all so important. And these are a new realm of competencies that don't get the attention that previous quality improvement or operational excellence types of behaviors, mindsets, and skills have had traditionally. So it just needs a reframe.
Our approach is all about how can you build new competencies, as opposed to trying to build some 'super-killer process' that everybody can follow.
You obviously speak to so many people across such a diverse range of industries; what do you feel are the biggest traps that people fall into when they're innovating?
Some of the traps that we often see are companies assuming that people at different levels of the organization have the same vision for what innovating means. It's not just vertical silos, like 'Oh marketing thinks about it one way, R&D technologists think about it another way' - those have existed for a long time and I think people are figuring out how to work across those. But one of the unacknowledged traps is a failure to take a rigorous look at the horizontal silos that exist, it's just assumed that everybody knows and understands the basic competencies and has the same competencies around innovation. But that's not the case.
Even HR practices are all around competencies in the job position, not around innovation skills. So innovation skills are not part of the hiring process, unless they're hiring an innovation manager. One of the traps is that they don't know how to define what is innovative, so they don't know what an innovative person even looks like.
Another trap, I think, is that companies sometimes assume that if they keep searching they'll find some magical innovation process that somebody else used that's going to be perfect for them. Of course, no such thing exists. You have to create those. So there's an expectation to not just be innovative, but to innovate around how you're innovating.
One trap is that once a process has been put in place, companies don't want to do anything to it. The issue is, once a company invested money and time training staff, they don't want to alter the process because they aren't going to or can't afford to reinvest in changing it. But companies need to be constantly reinvigorated. This is different than a quality program or something else where you have changed management or whatever, but there's identifiable, very reassuring metrics to quality that everybody can get behind. There's ISO certifications for it, and so there's this notion that once you get it in place you hold it and with operational excellence you improve it, but you don't reinvent it. I think innovation can be flexible with the changing landscape and business models. As such, you have to be able to re-envision and reinvigorate innovating process and approaches in a pretty dynamic way.
And what some of the top trends in innovation and R & D right now?
I think the biggest R & D trend right now is digital transformation. To really think about all the implications of moving to a much more digitally-driven, data-driven way of approaching R & D. This is particularly challenging at the lab & bench scale types of R & D that happens, I mean obviously this is part and parcel of how software and digital companies do that. But you know this radical shift that's underway to a knowledge economy, where data is the currency, is something that's still going on. So that's one of the biggest things in R & D is making this digital transformation and that means a lot of different things to different people. It's almost become as meaningless to say 'Oh innovation' because everybody has their own definition what a digital transformation is.
In terms of innovating, one of the other things that we have seen evolve over the last many years is getting the balance between going outside the company, in an open innovation context, and setting up structures that allow the organization to go out and get ahead, seek out new opportunities, find new partners in a way that balances their risk tolerance, for sharing information and doing partnerships in a way. It's more recently there's not been a huge uptick in corporate venturing. Now corporate venturing has been around for a long time, 30, 40 years we've been tracking different versions of corporate venturing and supporting that for various clients. But there's a renewed interest in it, because it offers a new way to balance that risk and reward inside/outside the organization.
Another trend in innovation is that people are realizing there are other dimensions to it than just setting up stage grade and making it faster or being agile. How do you actually work effectively to bring in different parts of the organization and build confidence and conviction across the organization so that different aspects of the innovating process is happening effectively and getting all the diverse perspectives? There's been a lot of attempts to do that, Lean Startup and things like that are based on the premise that you need more consumer insights earlier on. Human-centered design is based on the premise that you really need to think about it from the human perspective across not just internal to the organization, but external. Obviously, the ability to get market research and insights from markets is shifting. The global markets are changing, so having a view on those is changing. The shift now is how do you get your arms around all of those technology user and market insights and integrate them, not just by the time you get to prototyping like in stage-gate that you've been really actively doing that from the very earliest stages of setting strategy and vision?
So startups and smaller enterprises are notorious for innovating very well, but you're obviously working with a lot of the Fortune 500 companies, like Pepsi, so how can you make sure innovation is there within large companies?
So it's always this question of who are innovators etc, and yet we want everybody to be innovators. So I think the challenge is to ensure those different layers of the organization have a shared vision. The problem with large companies is they have a lot to lose if they mess it up. Small companies don't. So their risk-tolerance and risk aversion is different and this is why they're doing more corporate venturing. This allows them to make investments so that someone else is taking the risk external to their organization, yet they can tap into it.
Of course there's a lot of buzz about doing lean startup and things like that. But innovation culture doesn't happen in a vacuum, and that's the other thing that large companies are wrestling with. You have to have it as part of a culture where people are allowed to fail and people feel safe at work. These are larger HR and cultural issues that can either create or stymie efforts to build a culture where people are more risk-tolerant and willing to explore it stuff without just being assigned to that role 'hey you're the innovator'.
I just think there is no real answers to these things, it's just it's part of a larger evolution in organizations and how they approach things. That's just fundamentally a big shift going from 20th century dynamics of transaction-based innovating in business to one that's now much more affiliation and network-driven because the knowledge economy has really set in.
If you had to name one company that you think are the most innovative right now, who comes to mind first?
You can't have 'the most innovative company' because the challenges that every industry sector faces are so different. And where they're innovating and how they're innovating, it can be as radically different as comparing apples and oranges.
So I think this question's a perfect example of one of the problems, people are holding on to traditional models of measures of success. So you're really defining metrics like 'what's their earnings?', 'what's the number of great products they came out with?', those are all really measurable things and business loves to think in terms of really measurable stuff. But in fact it is one side of a two-sided coin of innovating. Yes, you have to execute at the end, but this whole notion of measuring who's the best actually subverts the other side of the coin which is looking at different kinds of metrics, like who's the best at learning? Who's the best at partnering outside their organization in this new networked economy? Those are indicators, not measurements. Indicators that are really powerful about who's positioned well to be innovative. And so you wouldn't measure them, some of those are measurable at all, so it's almost a false premise to come up with who's the best
You've actually answered my next question, as I was going to ask if there is a way to measure the value of innovation (which is demonstrably a problematic question!). Is there anything else you'd like to add about the summit and your presentation?
I think this will be a really interesting conference because clearly many people across many organizations are really struggling to figure out how to transform the role of R&D. Because of this big transformation that's going on in the role of R&D, as an innovation source within a company, it is shifting and being transformed. I think people are still wrestling with it. They're figuring out their own way, but I think it's great to have conferences like this where people can get different perspectives about how that transformation is going. So it should be good to bring these ideas together.
Hear more from Tom at his presentation at the R & D Innovation Summit in Chicago on March 21 & 22.