Scott D. Anthony is a senior partner of the growth strategy consulting firm Innosight and co-author of “Dual Transformation: How to Reposition Today’s Business While Creating the Future.” Paul Cobban is the chief data and transformation officer at DBS. Rahul Nair is a manager at Innosight. Natalie Painchaud is the director of learning at Innosight.
To catalyze innovation, companies invest billions in internal venture capital, incubators and accelerators. Yet, according to a McKinsey survey, 94% of executives are dissatisfied with their firms’ innovation performance. Why? We believe it’s because companies have failed to address a huge underlying obstacle: the routines and rituals that stifle innovation.
Fortunately, it’s possible to “hack” this problem. Drawing on the behavioral-change literature and on our experiences working with dozens of global companies, we’ve devised a practical way to break bad habits. Our approach involves setting up interventions we call BEANs, shorthand for behavior enablers, artifacts and nudges. Behavior enablers are tools or processes that make it easier for people to do something different. Artifacts — things you can see and touch — support the new behavior. And nudges, a tactic drawn from behavioral science, promote change through indirect suggestion and reinforcement.
One of the biggest impediments standing in the way of innovation is organizational inertia. As an executive once said to us, businesses are “organized to deliver predictable, reliable results — and that’s exactly the problem.” A major paradox managers face is that the systems that enable success within today’s model reinforce behaviors that are inconsistent with discovering tomorrow’s model.
If you don’t address inertia, efforts to eliminate other blockers won’t work. Give people more time in an environment stifled by inertia, and they’ll simply have more time to do things the old way; give them new skills, and those will go to waste if they don’t fit with existing routines. Fortunately, you can combat both inertia and other blockers with BEANs.
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In our research we collected some 130 examples of interventions that promoted better innovation habits, which we found either at clients we were working with or by reading through case studies from the Innovation Leader information service and corporate cultural documents compiled by Tettra, a startup. Then we and a team from Innosight, a management consulting firm, analyzed those interventions and tested them at a variety of organizations. We determined that successful BEANs typically are:
— SIMPLE: Interventions that are easy to adopt and remember gain traction much more quickly.
— FUN: When an activity is engaging and social, it’s intrinsically rewarding, which makes people more likely to do it.
— TRACKABLE: The ability to monitor performance and compare it against that of others is a powerful motivator.
— PRACTICAL: The best BEANs are smoothly integrated into existing meetings and processes and don’t require major changes or entirely new routines.
— REINFORCED: People often need physical and digital reminders to keep using the new habits.
— ORGANIZATIONALLY CONSISTENT: Effective BEANs don’t encourage people to do one thing if the company punishes them for that behavior or rewards them for something else.
A good example of a BEAN comes from the Tata Group, India’s largest conglomerate. Every year the company holds a celebration honoring innovation accomplishments across its sprawling collection of business units. One of the most coveted awards given at that gathering is called Dare to Try. As the name connotes, it goes to a team that failed but in an intelligent way. Dare to Try is a substantial program, attracting hundreds of applications annually. Promotions for it help nudge innovative behaviors like embracing risk and tolerating failure. The award itself — a trophy — and the high-visibility public summary of the event are artifacts that effectively reinforce Tata’s innovation culture.
While many BEANs have sprung up organically, we’ve created a three-step process companies can use to develop them. Ideally, you would appoint a group of change agents (we’ll call it a culture team) tasked with developing your BEAN.
1. SPECIFY THE DESIRED CHARACTERISTICS: The team should start by outlining what kind of organizational traits it wants to develop. For example, it might describe a culture that is agile, learning-oriented and experimental. It should then list behaviors under each of them. For example, under “experimental” one could add aspirational statements such as “We rapidly test new ideas.”
2. IDENTIFY BLOCKERS: Next, the team should look for things that may get in the way of the innovative behaviors. To uncover these, members can sit in on staff meetings, conduct diagnostic surveys and interview employees one-on-one. Another way to identify specific changes to implement is to gather groups of employees and ask them to complete two sentences: “Wouldn’t it be great if we … ” (which surfaces the behaviors) and “But we don’t because … ” (which helps pinpoint the blockers).
3. COME UP WITH INTERVENTIONS: Last, the culture team should design ways to eliminate the blockers. To get things going, it can facilitate workshops with senior leaders. After discussing the desired behaviors and their blockers with them, participants can break into small groups for structured brainstorming. Each group should be provided with examples of BEANs from other organizations for inspiration and tasked with devising new ones, specifying the behaviors sought, the habits blocking them, and the enablers and nudges that would help employees break through them. The participants can then reassemble to review the proposed BEANs and vote on what to implement.
A few words of caution: Companies seeking to spark innovation often copy artifacts they see in other innovative companies. Maybe they install a well-stocked cafeteria with bright colors or provide scooters. But quick-and-easy artifacts that are bolted on and don’t connect with day-to-day behaviors won’t work. Consider the case of a socially oriented venture in Cambodia that employs thousands of poor artisans. One silkworm farm connected to the venture had put out a bright-blue box and invited workers to leave in it feedback and ideas “for you, for your colleagues and for your well-being.” Sounds inspirational, right?
There was just one problem. The rusted lock on the box betrayed that it hadn’t been opened recently — or maybe ever. Such “innoganda” — innovation propaganda — just serves as a painful reminder of the things leadership is not doing.
Even the best BEAN can turn into innoganda without the right support. Once you have come up with your own, make sure to form a team tasked with encouraging cultural change and teaching employees how to innovate. Having executives experience the new mindset and behaviors through special initiatives (such as workshops on digital concepts) will also help make the programs practical, authentic and organizationally consistent.
By embracing BEANs, companies can finally see the gap close between leaders’ innovation goals and reality. When the people in your organization were children, they were brimming with curiosity and creativity. Your job is to bring that youthful spirit back to life.