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The five dysfunctions of innovation: What's holding you back?

December 7, 2017

Building a sustainable culture of innovation in an organization can be like swimming upstream, fully clothed, with your hands tied behind your back. You might be a fantastic swimmer, but even the best find gulping for air gets exhausting.  And, without fail, the aerodynamic Michael Phelps’ of the world will leave you behind in their wake.

The good news is that innovation can be unleashed by removing some key barriers.

Consider this scenario. Does any of it seem familiar?

Caroline Jones has just accepted a new position as CEO of Top Dog Bank. She has an impressive track record of driving innovation in the organizations she has led, and is determined to do the same at Top Dog.

Caroline holds her first executive meeting, and after the usual pleasantries and intros, Caroline sets the stage by saying that the she is here because the bank is in trouble: “While financial results have been good, we need to accelerate innovation to survive. The world is moving fast, customers’ expectations are morphing, bureaucracy is strangling change and competitors are looking at the next big thing to acquire more customers—including ours.”

As the first order of business, Caroline asks the executive team to talk about the approach to innovation. Here’s what Caroline hears from four key executives:

Tyler, VP of HR says:

A recent employee engagement survey shows that employees do not understand the significance of new initiatives to the company’s success. Secondly, when employees were asked how they would rate their awareness of the company’s strategic plan, 87% responded with ‘what strategy?’.”

Caroline makes a mental note as she spots dysfunction #1: innovation is not linked with corporate mission and strategy.

Sandra, VP of Sales and Marketing, says:

“While we have had some success, the flow of new products and services is unpredictable and slow. It’s like we’re putting our foot on the brake and the gas pedal at the same time. Our competitors seem to have an ongoing pipeline of new ideas that they are launching, and we’re always reactive and trying to play catch up.”

Reaching for her notepad, Caroline jots down dysfunction #2: no common system for innovation.

Stan, the CFO, in his usual cut-to-the-chase approach says:

“There is lots of talk and investment in innovation, but the numbers don’t show results.”

Caroline notes dysfunction #3: no metrics or measures tied with innovation.

Marty, the VP of Innovation, who by this time is getting defensive, speaks up:

“We ARE innovating. We have a brand new innovation lab, and we have hired all these product development and digital transformation hot shots from competitors. We just need more people in the innovation lab and invest in new technologies.”

When Caroline asks how the entire organization is engaged in innovation, Marty draws a blank.

Caroline knows full well from past experience that sustainable innovation only happens when all areas of the company are engaged.  She notes dysfunction #4: innovation is isolated to a select few—it’s not company-wide.

Caroline has seen this rodeo before and these four roadblocks to innovation are not a surprise to her. After some reflection, Caroline recognizes the number one roadblock to innovation. It is dysfunction #5: leaders are not on board to effectively support and lead innovation.

Caroline knows that in large, complex, silo-based organizations, breaking through this barrier with all the leaders at all levels of the company will be her biggest singular challenge.  Her mantra has always been that leaders who don’t want to lead and support innovation will be freed up for other possibilities outside the organization.

Caroline summarizes what she has heard from her executive on the whiteboard:

The five dysfunctions of innovation

The Five Dysfunctions of Innovation

  1. Not linked with corporate mission and strategy
  2. No common system for innovation
  3. No metrics or measures tied with innovation
  4. Innovation isolated to a select few—not company-wide
  5. Leaders aren't supportive or on-board with innovation

Caroline tells her team that their mission is to take action today to remove these dysfunctions. The status quo is not an option. Hope is not a strategy. “Today we start with creating the culture of innovation—our only true competitive advantage. “

Although this story is fictionalized, I’m sure parts of it ring true for many of you. Why? It’s because these themes are common and get in the way of many organizations’ need to innovate.

I hope this provides inspiration into what you may need to rewrite your innovation story.


Author's Note: For a deeper dive into the five dysfunctions of innovation, check out our recent webinar, which focuses on the five dysfunctions and how to fix them.

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