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What is innovation and who is responsible for it?

Lemuel Lasher is CSC Chief Innovation Officer. Within the framework of the Nordic Project Zone he will have a keynote presentation as well as a masterclass on this topic. As a sponsor of the Nordic Project Zone Can Do proudly presents the following interview with Lemuel Lasher.

Nordic Project Zone (NPZ): Innovation is a very hot topic right now. What makes some companies succeed in terms of innovation and some fail?
Lemuel Lasher: Well I think there are basically four things that need to be in place in order for any innovation program to succeed.The first is, there has to be executive leadership and ownership of the agenda. The CEO really has to own this and embrace this and he or she can delegate activities or certain programs of work. But this has to be a CEO agenda because fundamentally innovation is about cultural change, it’s about how the organization functions, it’s about what it values, what’s important, how it sets objectives, how it measures. So there’s so many aspects of the innovation agenda that are impacted by the overall strategy of the business so this is an agenda that really needs to be owned by the CEO and then executed by executives that he trusts and has confidence in and gives them the ability, resources and support to be able to effect that. So that’s the first thing I’ve seen as kind of a critical success factor.

Second is, once that’s in place and once you have executive ownership and leadership dedicated to the innovation agenda, you need to have the right kind of organizational structure, the governance, the fora, established within the enterprise so that the strategy in fact can be executed because if we don’t have structural alignment against that particular agenda, it’s very difficult to effect the agenda in any sort of meaningful way. So, either changing the organization, introducing new structure, introducing modifications to the model, whatever, something has to change in order for the agenda to be effective and executed on that basis.

The third thing that has to be in place is that there has to be processes that are available to the executives who own the agenda that enable and facilitate the innovation agenda to advance. And most critical process related to that is the process for resource allocation – by far the most significant process that has an impact on innovation. So there are certain processes that get in the way of innovation, those have to be eliminated. Certain processes that make innovation more effective, they have to be supported and augmented; and certain processes that don’t exist that have to be put in place to be able to effect that. So part of the organizational design and operating model design the executives need to go through is putting in place those processes which are again, supported by governance, organizational structure, fora, to be able to effect agenda.


Finally, there has to be resources allocated and tools provided to, not only leadership but the employees overall, to support the agenda. The modern technology that one normally associates with the innovation agenda would include ideation, wikis, blogs, RSS feeds, collaborative tools, technologies, social media, those kind of things need to be in place in order for innovation to be effective because in today’s global economy and organizations, without those kind of tools and governance and processes, and leadership to be able to effect all that, it’s going to be very difficult to advance any innovation agenda. So those are really the four enduring themes that I see that makes the difference between companies that succeed and companies that really don’t.

NPZ: So, if those four things are the key enablers or the critical building blocks as a launch pad for success, what are some of the potential obstacles to innovation?
Lemuel Lasher: Well I think the first obstacle really is the organization itself, the processes themselves, the lack of tools and the lack of leadership. That’s why those things are so important. The inverse of what I just mentioned are the biggest obstacles. Culture plays a very important role in the innovation agenda, and what executives really value and what they don’t value manifests itself in those dimensions of the operating model and how it’s structured, how it executes its resource allocation, what resources it actually allocates to it, and what priorities it puts for setting objectives and measurements of success and so forth. So the reason why I say that those four things are the essential enablers of innovation is because the absence of those or the presence of the alternatives is what makes innovation so difficult.

NPZ: What about the opposite problem – Is it possible to over-innovate
Lemul Lasher: Yes, I think it is. Innovation is not always appropriate. Innovation has areas where it can really out value to the organization but not everything is going to be innovative, execution is equally important and the example I’d like to give which tends to resonate with people is that when I get onto an airplane, I’m not looking for innovative pilots. I’m looking for pilots that have the competence to know how to fly, know the rules and regulations, and have safety in mind above and beyond innovation. So, innovation is not always appropriate in every circumstance; it tends to, frequently, because it’s so ignored, it tends to be overemphasized in many cases and people looking to be innovative in all sorts of ways which sometimes are not appropriate. So innovation is a phenomenon that needs to exist in an enterprise, but by all means, not everything that the organization does results in innovation, or should.

NPZ: Indeed, we don’t want innovative pilots! What about the differences in terms of the size of companies: do small companies innovate in the same way as large companies or does it differ?
Lemuel Lasher: Well innovation is always the same, which is the creative application of knowledge or expertise against a specific problem set that’s done in a very rigorous and disciplined kind of way, after a lot of hard work and the right kind of people being involved in it. So innovation is always the same but the difficult is between the big organization and the small organization is as follows:
In large organizations, it’s difficult to innovate because the bureaucracy, the policies, procedures, organization, incentives, governance and leadership, tend to get in the way of that because the dominant modality for most businesses is not about innovation, it’s about risk mitigation. So that makes it very difficult for someone who’s got a rich agenda around innovation to execute against an operating model that’s designed to execute against cost- efficiencies and risk mitigation. So in big enterprises, the problem tends to be administrative oversight, management oversight, policies, procedures that are designed to do risk mitigation which makes it very difficult to innovate.

In smaller companies, that isn’t the problem. The problem is not there, the problem is that they don’t have the resources to innovate, and innovation is about applying resources to problems and so smaller organizations don’t tend to have the kind of overhead structures and procedures that mitigate risk. They tend to be pretty free-flowing and tend to be pretty entrepreneurial and that makes it easier in that regard. But what makes it hard is that they don’t have the resources to apply to the problems they’re looking at. So that’s the trade-off and while I would argue that it’s as difficult to innovate in a small company as it is to innovate in a large company but the challenges and problems are very different.

NPZ: Hmmm, and there’s so much talk these days about start-ups and the risk they pose to big companies – like Google for example – that are still afraid of the start-up companies out there because of the risk they pose. There’s a perception that they have the capacity to be more innovative. Does innovation relate to business agility in this sense then?
Lemuel Lasher: Before I go into agility issue, yeah, that’s true, but there’s a really high failure rate in the start-ups as well. Keep in that mind! So that’s why I say it’s hard to innovate. A smaller company can be quite lethal in today’s economy because they have access to capital, they have access to resources that they wouldn’t have had otherwise. But there still is a very high failure rate. And organizations that are well- established and have high resources that maintain an innovative culture, can continue to innovate and sustain that position. There’s been a lot of analysis and a lot of work that’s been done when an organization is likely to be disrupted by an entrant, and that’s part of the work we’ve done over the years – figuring that out. But it is very high risk for both big and small enterprise to be able to do that.

Going back to agility – agility is critical not just for innovation but for business success. The smaller organizations tend to have an easier time with that because they don’t have all those mechanisms, bureaucracies, structures, and policies that tend to minimize agility but again they don’t have the resources to be able to effect that. An organization that can establish a certain amount of agility – and the way they would do that is by having the right leadership, governance, processes, tools, culture to be flexible and adaptive in the market, can be quite lethal it terms of being able to consistently innovate. So I would argue that agility is a very important factor in enabling companies to innovate.

NPZ: I’ve read some of your previous interviews where you talk about the differences between best practice and next practice. So how does innovation support next practice, or vice-versa, how does next practice support innovation?
Lemuel Lasher: 
I don’t think it’s a support relationship. I think it’s a categorization issue and a lot of organizations are focused on best practices which have their place because in some cases, organizations are below parity in terms of maturity in whatever domain they’re measuring it, so best practices do have a role in company strategies but it’s not around innovation because innovation is by definition, doing something new, and best practice is, by definition, doing something a lot of people have already done. So organizations that follow best practices end up being good imitators and that can add value to the organization because if you’re below parity, just being best in class can be good but it’s not going to be innovation. Innovation is when you break out from the best in class and start doing things differently and you really redefine how problems are being solved and how they’re being addressed. That’s why for the innovation agenda, next practices are much more important than best practices.

Earlier in the days when we were setting up the office of innovation, I was asked if I wanted to have the six- sigma group as part of the office of innovation, and I said absolutely not. Six sigma is not about innovation – design for six sigma does have some characteristics around that but six sigma is really about process execution, process excellence and process quality and that’s not the same as the innovation agenda. So I didn’t want it to be in the same organization because I thought it would give us a bias that wouldn’t be helpful.

NPZ: I wanted to explore with you as well what the relationship is, as least for you and your role there at CSC, between you as the Chief of the Office of Innovation and the Chief Risk Officer? What does that relationship look like?
Lemuel Lasher: Well it’s a relationship that is professional and cordial but it’s a different agenda all together. I respect what the chief risk officer is trying to do, and what the people involved in compliance are trying to do, and that’s an important feature of what any corporation, any large corporation, needs to deal with, but it’s not the same agenda. It’s a completely different sphere that we’re operating in. We take more risks by definition because what we’re doing around innovation is a lot riskier than tried and true solutions and I would argue that if you don’t have risk mitigation and the kind of policy compliance aspects which you would normally see in a large multinational, then you have a big problem. I would argue the same way that if you don’t have a rich innovation agenda, if you’re not trying to push the envelope or push the edge of what’s doable and feasible in your respective area then you’ll also have a problem. In one case, you’ll have a problem of survivability and in the other case, you have a problem of growth. And ultimately the problem of growth turns into a problem of survivability, but it’s a much longer-term horizon. So there has to be a balance between the two – one can’t exclude the other but they really are completely separate agendas so the governance and leadership really needs to be separate and distinct because while respectful of each party’s responsibility, it is a completely different world.

NPZ: What about if we turn to the role of Project Managers? Project Management is typically governed by fairly stringent processes, so why should senior project executives be innovative and how do they do that while still following the governance and processes that they have to have in place?

Lemuel Lasher: I would argue that that’s probably not the major responsibility of the Project Manager. I would think that the Project Manager, the really good Project Managers, tend to be creative in how they solve problems and if you define creative as an important characteristic of innovation – which I think it is – then to that extent they’re innovative. But I don’t think that’s sufficient to be innovative. I think you need to be doing things that are new, difficult, disruptive, things that are fundamentally higher risk – and that’s not what Program Management is all about. Program Managers are all about execution and by the time a project is defined and a Program Manager takes responsibility, it’s not really on their shoulders to be innovative, it’s on their shoulders to deliver against those objectives and commitments. The innovation should have in fact taken place much earlier on.