How Does Innovation Increase Productivity?


This past week in New York City, my colleague Helene Cahen and I had the honour of attending a joint meeting of the Conference Board of US Innovation Leadership Council and the Conference Board of Canada Council of Innovation and Commercialization, of which I am the Chair. This meeting was two years in the making and greatly anticipated by members in both countries, the thinking being we could learn much from each other about how enterprise innovation is being tackled, and answer the question, "How does innovation increase productivity?"

Fifty-two executives, their guests and Conference Board staff were in attendance, coming from small and medium sized enterprises, Fortune 500, non-profit, government and academic sectors. What I observed was that everyone had something to share and much to learn from each other and across sectors.

Exploring innovation and productivity isn’t for the faint of heart—our journey included looking at ways members have worked to drive speed, efficiency and effectiveness using agile and dynamic change; examining how members are striking a balance between the competing priorities to meet operational demand and drive innovation; and using foresight to create readiness for possible futures.

The meeting started with a humbling analysis from a Conference Board of US economist. His key messages were alarming:

  • The global economy has been in a productivity crisis
  • Advanced economies are suffering from demographic shifts—older populations and decreasing birth rates are hurting productivity
  • Productivity growth has dramatically slowed down across the world and projected improvements look small.

The purpose of the meeting was to learn about how various organizations are working to improve productivity through innovation.

Delving into this topic wasn’t easy. Pre-reading was suggested—about six lengthy research studies, articles, summary documents and a long list of references and resources for those daring enough to learn more.

Below I share some of my key insights and takeaways from the two-day meeting.

How Do We Be Innovative?

For the most part, Council members are still learning how to be innovative. While there were many stories of success—and a few humbling stories of missteps—key takeaways are that while some innovation leadership efforts are global and attempt at enterprise innovation efforts, most are being implemented in local areas and hived off from other groups in the organization.

Organizations continue to focus on being “more innovative,” but few have defined what innovation means to them. Those who have, have made definitions to address divisional innovation programs, not a corporate innovation focus.

Innovation theatre still forms a key part of many organizational strategies. You’ve seen this—it’s “shark tanks,” innovation labs that have no clear function in the organization, using suggestion boxes and idea tracking software to generate ideas that aren’t tied to a specific problem, and training events that promise to teach you how to innovate when there’s no accountability, support or understanding about how to actually use it in the organization.

When an organization’s focus is all about the show and not about the act, it’s not engaging in innovation—it’s pretending to be innovative. And it doesn’t drive needed value.

Rewarding Innovation

We heard that, “Monetary incentives for employee innovation don’t work.” More significant motivators include involvement, recognition for contributions and giving staff who show true commitment to innovation a seat at the table when enterprise innovation plans are being made. Clearly, people want to be a part of something bigger and like the prestige that comes from being seen at the table.

Old Models Aren’t Working

Global organizations are recognizing that their business models and ways of thinking aren’t working anymore. Using Business Model Canvas is recognized to help. A leader in one Canadian government organization who was attending the meeting shared a fantastic story about how they are using Business Model Canvas to rethink their business and challenge assumptions about competition. Even government organizations need to show relevance and drive value. In today’s socially connected, citizen-focused delivery of government services, if you can’t drive value, why are you here?

Innovation Leadership

In telling his story about a challenging organizational situation that required deep and global change within his organization, one leader dared to ask:

As leaders, what is our responsibility to innovation?

He shared a quote and his experience to put it into perspective:

“Regardless of how much success you had in the past or today,
how will you ensure that you have that success in the future?

“Our responsibility”, he reminded us, “is that we owe our people a vision, a future.”

And he so poignantly said, whether things look good or bad on an innovation journey, as leaders we need to:

"Be honest...
about the situation and where you are."

Know When You Need Real Expertise

There is a desire to integrate new methodologies and models for innovation, such as Agile, Lean and Design Thinking. However, without sufficient depth of knowledge in the organization on how to apply and leverage these methodologies and models, the promised returns aren’t being realized. Many organizations are learning how to do these things from reading books, and lack the depth of experience to get the most out of these disciplines. It’s a learning process.

Leadership Culture in Innovation

Leadership culture in innovation appears to be illusive or unrecognized.  What I observed was members whose stories of their own efforts of internal innovation programs clearly demonstrated leadership. However, in a breakout group focused on exploring leadership culture, everyone seemed to be operating from an assumption that a leadership culture could only be realized if it came from someone else higher up. Sure, a success condition for innovation is leaders who are involved in and leading innovation initiatives. You can’t delegate innovation. Culture shifts one person at a time.  The leaders I heard from were moving mountains to make it happen and didn’t realize that they were working to create a leadership culture for innovation.

Can Everyone Be an Innovator?

Finally, my thinking was challenged. One of my Canadian peers was adamant in his declaration that not everyone in an organization will be an innovator.  When I asked, "Why not?", his response was that not everyone had the skill to implement ideas.  In my world view, everyone can contribute to innovation, and in that way, they are innovators. However, I do have to agree, it does take a special skill set to implement innovation.

Contact us to learn how you can develop creativity and innovation in your teams.



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