In today’s blog entry, I’ll wrap up the discussion of the five tenets of innovation by exploring why innovation must be a team game, not the exclusive domain of R&D.
Tenet #5: Innovation is a team game; R&D can’t do it all on its own.
Just as an army’s success in battle depends on its logistics and supply lines, an R&D team’s inventions will fail if they aren’t successfully marketed and manufactured. I am always amazed when management’s response to an economic downturn is, “Cut the marketing budget and lay off all the support staff so we can leave R&D untouched. That way we’ll be ready with a slew of new products when the recession ends.” Such a reaction indicates that management doesn’t have a clue as to how a good R&D department actually functions.
Think about it. How do you know what to invent if you’re not getting feedback on what the market wants? Inevitably, one of two things will happen. You will either miss out on this market feedback and invent the wrong product, or you will send the R&D engineers out to customers to get that feedback themselves. In that case, your R&D team is doing the marketing job instead of the R&D job. You’d have been smarter to retain some of the marketing professionals who really know how to do this kind of customer research.
Unfortunately, I’ve met a few vice presidents who don’t understand the role of marketing or how to use it as a competitive weapon. “Our marketing department is a bunch of amateurs,” they cry, and then proceed to cut the budget and lay off the people rather than fix the problem. I’m embarrassed to say I used to think that way myself, until one day I found myself the head of a 100-person marketing department for a $400 million product line. Having never managed marketing before, it was an eye-opening experience. Far from the Dilbert “2-drink minimum” perception I had of marketing, here was a brilliant team of people who had more impact on our product line’s success than I had ever before imagined.
In my previous role as R&D manager I had worked closely with the product marketing team, so I had a healthy respect for marketing’s ability to bring a customer-focused perspective to new product designs. As marketing manager I learned how much more marketing had to offer—sales development, customer support, marcom, and technical marketing. It was soon evident how critical all these other functions were to the overall success of the product line. Based in part on this experience, I now strongly counsel anyone with aspirations to executive-level management to develop their skills by taking on management-level experience in both R&D and marketing.
The problem doesn’t stop with marketing. Disproportionate elimination of such positions as administrative assistants or manufacturing engineers is also false economy. The reason you have these people in the first place is that they are making important contributions to the organization. (If they aren’t, you shouldn’t be waiting for an economic downturn to get rid of them!) Lay off the administrative assistants and your engineers now have to spend time ordering parts, scheduling meetings, shipping materials to subcontractors, and countless other mundane things. You didn’t eliminate the work, you just transferred it to more highly paid staff who now have less time to get their real jobs done.
It’s easy to think that in today’s Internet-driven world of automation, professionals can easily do much of this work themselves. But again, think it through. Here’s another example from my own experience. As a senior marketing manager in a large multinational company, a fair amount of my job involved travel. In the old days, I used an in-house travel agency to arrange my trips quickly and efficiently. A travel professional made sure I got the best fares, and if I forgot to request a rental car in a distant city, she would catch it and check to see if that’s what I really wanted. Then when I returned, I would deliver my travel receipts to my administrative assistant, who would fill out the forms and submit them to our accounts payable department. Things went smoothly and I didn’t have to divert a lot of time to dealing with routine details. At my pay level, that was a sensible strategy.
Then the company switched to an Internet-driven software program for scheduling travel and another program for submitting expense receipts. According to the finance department (staffed by people who rarely traveled and didn’t appreciate its complexities), we could now do it all ourselves and didn’t need as many administrative assistants or travel agents. So a lot of them were laid off.
The reality was considerably different. Previously, scheduling a trip of any complexity was something I could handle in 10 minutes and then turn over to a travel professional. Now it took an hour just to search for the best fares and work out the connecting flights. And if I forgot to request a rental car there was no one to catch the mistake. Speaking from experience, you don’t want to arrive at a strange airport at 11:30 pm only to discover there is no rental car waiting for you!
Filling out on-line expense reports took another hour. When you added it all up, the real cost saving was far different from what finance had proclaimed. And the finance department never calculated the true total cost, which included not only the difference between my salary and that of a travel agent, but also the two hours of lost time I could have devoted to higher-payback activities. Two hours I wasn’t using for innovation.
A smart leadership team must analyze the organization’s total needs and size all parts of it correctly, regardless of the phase of an economic cycle the company happens to be in. This is one advantage the large multinational company has over the small startup. In the startup, I would have no choice but to schedule my own travel, handle my own shipping, and do both the marketing and the R&D work for my new product. The multinational company is large enough to afford experts in each of these areas. The improvement in efficiency this can yield is priceless. Make the most of it.
Finally, let’s talk about the need for a certain amount of equality across all departments in a company. In the high-tech world, it’s not uncommon for R&D engineers to be anointed with a higher status than their counterparts in marketing, manufacturing, or administration. They get higher pay, more stock options, and other perks not available to the rest of the organization. Some level of disparity is unavoidable. An R&D engineer who has specialized knowledge will command a higher salary than a marketing engineer with similar years of experience. Where possible, though, try to eliminate unnecessary class distinctions. Recall my earlier example of the R&D team that bought a massage chair and invited everyone to enjoy it rather than reserving it exclusively for their own use. This action did far more to cement their relationships with marketing and manufacturing than any top-down edict could ever do.
I began this series of blog entries with the premise that corporate America often gets innovation wrong. Management frequently focuses too much on creativity and not enough on execution. I presented a definition of innovation that every manager should memorize:
Innovation is the ability to see opportunity in places others don’t and then turn that vision into reality.
By now, I hope you recognize how important the last part of that definition is. In business, creativity means nothing if you can’t turn it into financial success. Flawed execution has doomed many more companies than lack of innovative ideas.
You should now also recognize there is a big difference between having an innovative idea and being an innovative company. Anyone can have a single innovative idea. The innovative company is one that knows how to repeat that success over and over. This doesn’t happen just by having a ping-pong table in the break room or free dinners for your engineers in the evenings. The five tenets of innovation go far beyond these kinds of “soft” features. They include such fundamental principles as educating everyone on your high-level business strategy, being good at different kinds of innovation, creating a work environment in which innovation thrives, and understanding that innovation isn’t the purview of a few individuals, it’s everyone’s responsibility. These are the things that separate the truly innovative company from all the pretenders, and it’s management’s responsibility to make them happen.
Will following all these principles guarantee success? Of course not. Innovation can’t be reduced entirely to a few mechanical principles. As much as anything it’s the commitment to the intent of these principles, not their rote details, that make the difference. But if you hire creative people and give them the necessary encouragement and support, you’re on the right path to create a successful innovative environment. You know what to do. Now go do it.
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