A transcription of an interview on corporate innovation between me and host Luka Pregelj (Quantifly). First published on podcast Code & Culture which stands at the intersection of technology, HR strategy, and corporate innovation.The conversation is part of Season 2 and explores the nuances of fostering innovation within the organization, emphasizing the balance between creative and analytical thinking in ideation.
Read to find the answers like:
– Why Novak Đoković proves that our excuses about not having time for innovation are much riskier than the risks of innovation itself!
– Why our school system based on rewarding “the right answers” is such a threat to innovation and what can we do to overcome the trap?
– Why do workshops serve as wind into the sails of organizations who want to innovate?
Luka Pregelj: When you say innovation, could you please try to define the term?
PETER DRUCKER: Godfather of management science published an article with clear title: “The Discipline of Innovation” He argues that innovation is real work, and it can and should be managed like any other corporate function. But that doesn’t mean it’s the same as other business activities. Indeed, innovations is the work of knowing rather than doing.
Simon Hernaus: It’s a new combination of something already existing or even not existing at all on the market. It connects to creativity, then how you turn this creativity into something useful for the needs of different people.
Q: And in your perspective or opinion, would you say that innovation is something that can be or should be done systematically, or is it just a matter of a creative spree?
SH: That’s a very important question, and it seems to be an easy one, but it’s not. Peter Drucker, one of the management gurus, or godfathers of management science, was very clear about it: innovation is something that could be taught and could be learned and something you could improve.
And I believe that’s how it works on personal and organizational levels. So it’s something that should be systematically done.
But don’t get me wrong. It’s not possible to eradicate all the risks. Innovation is a risk. Still, the probability that you will succeed, is better if you make some steps, if you consciously seek opportunities for new needs.
Or, you can wait, but that’s a lottery, and I don’t believe in the lottery. I don’t believe in overnight success. You should consciously seek new opportunities. That’s what I believe. And the risk is not something to be avoided, but something you should accept. But if you know how to deal with it, it’s better than if you don’t have any tools.
Q: When is the right time to innovate?
SH:
Always time to innovate.
The organizations that don’t innovate sooner or later will perish or will go out of business. So it’s something that is necessary for any business, for any organization to survive.
Q: What would you say to the clients who claim they don’t have time to innovate because they have to pursue business results? How would you inspire them to start?
SH: One wonderful example because my clients never have time. I mean me, too, and probably yourself also, we never really have time. Time is the most precious thing. And, of course, we always say that we don’t have time because we work and we don’t have time to innovate.
We don’t have time for growth. We have time for example to be nice to our customers or to bring some value to the investors and so on but we don’t have time to innovate and that’s common.
NOVAK ĐOKOVIĆ – who won 24 Grand Slam titles (no tennis player ever won more):
Not only nutrition, strike styles, alternative spiritual practices, also shoes must break the limits for him.
Here’s a snippet from Courts magazine: “He received help from the ASICS Institute of Sports Science in Kobe, Japan, too. Fuelled by the Japanese principle of Kaizen or making sure that ‘every shoe needs to be better than the previous model,’ a team of experts re-ran every Djokovic match in recent memory—there were a fair lot to choose from a renaissance era that had seen the Serb clinch five of the latest seven Grand Slams—to analyse his every shoe bend. Inspired by Daft Punk’s Harder, Better, Faster, Stronger, the COURT FF 3 NOVAK’s motto became: Stable, Supportive, Flexible, Fast.”
At this point, just one thing pops into mind. Novak Đoković. The best tennis player in the world. He won, I don’t know how many Grand Slams. Does he have time for innovation?
But he sets challenges himself all the time. One moment he tries with completely new nutrition. Next to change the sleeping pattern. And yoga … and mentality … and employs Boris Becker to gain agression in play, etc.
But even now, when he approaches the mature age, he is once again putting Goran Ivanišević, his advisor, to the test, pushing him to think of how we will innovate, how we will turn something different and so on.
So if Novak has time, with all the pressures of the professional sport, we should also have some time. Though I know it’s very hard to find time when your work hours are all over the place, when you work over the weekends and now someone comes and says, okay, let’s innovate.
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Yeah the regular business doesn’t wait, but you have to innovate. And my approach is to start with experiments, to see what works. Then when you see that something works, you make it every day’s task, or as a cluster that you work around, and then make it bigger.
Of course, then you once again fall back into the trap. One day something is innovation, then it motivates you. The other day is once again a regular task, you have to be strict on reserving time.
Q: What would you say the first step should be when it comes to innovation?
SH: The most important thing is to believe in people. And to give them some space to make mistakes, and also to try new things to feel safe. Psychological safety is very important. So this is something, it’s the basis of all the innovation.
You don’t innovate just in a small particle of the company while all the other parts, the majority are just repeating the same patterns. You need to do this on the organizational level.
Q: Workshops are how you approach innovation with organizations. Why are they so important for success of innovation?
When I facilitate workshops different managers, various people from different divisions come together. And the most important thing is that they start to communicate and that they have this common denominator and that we know now, okay, who the client is what the goal is, what the strategy is what the project main objective is.
It’s the most obvious, but very often we forget about it sitting in the offices.
Workshop is also something where you put all the pieces together. Knowledge, creativity whatever you know about customers, and then turn this into a solution.
PSYCHOLOGICAL SAFETY
is not only necessary condition of innovation. R Ravishankar in HBR: “Today, people are 10 times more likely to quit their jobs because of toxic work cultures — rather than compensation or work-life balance — and three in four people say that their boss is the most stressful part of their jobs.”
And obviously, it’s a very good practice to prepare an action plan at the end, and then turn this into a minimum viable product. That’s what’s the usual path of something I would recommend. It’s not just learning from the, from the position of someone who knows everything, but having hands on that’s what workshop really brings, and hands on solving the problems and then turning them into the first iteration of a solution. And of course, then having some feedback and preparing for the rollout.
Q: What are the problems with innovation?
We all say we are in for the innovation. We believe in sustainability, we believe in everything like that. But then, when we get back to the business problems, we’re just repeating the same as for the last 10, 20 years. But if the model doesn’t work anymore, or if the old habits are restricting you from doing it, it’s not a solution to step on the throttle more, or cut the cost more, or work more, and then you’ll be better.
And here you have to create this »klick« to put someone out of these old habits.
Q: What should a manager do to prepare for a first meeting with you?
It’s very important to just be straight, to tell me what your opinion is, how you see things? And to trust me that I will go down there – to the basement if you want – and find some things and bring it back to you which we’ll discuss.
I know you as a manager have all sorts of problems on your mind, you have to deal with the banks with investors with everything and I can only understand this and I’m not in the same position, but
my position is to bring you back the answer, to show you the mirror and it’s not in one session.
If anything, I deep dive. I go to the stores, I talk to the customers, to your employees. Sometimes it worked meeting two or three people working in the stores, they knew the problem, they saw it, but the management didn’t know it yet. That’s also how it works. You don’t always need huge data set.
Q: Can you explain So what was the trigger? What did you do?
Definitely gaining their trust. And also assuring that they have this psychological safety, as I said. Okay, it’s a big word, but it’s actually really believing that nothing is wrong if you say something which is not considered rational at this very moment and that I’m not the one who knows all the answers. I was brought to teach them, and then you have to admit that you only can teach them if you work with them, and if you get their knowledge, and it’s this, Eastern disciplines when you work with the force of your opponent, and this is a lever and of course in the learning it’s very similar.
The turning point was definitely gaining participants’ trust, giving them opportunity to speak, to share, and also – context.
They asked, for example, how can I know what my customers think? How do I analyze the sales data, the POS data, the who-know-what data.
And then I ask them: do you have parents? What do your parents think? What do your peers think? And your wife? And kids? Ask them – as they’re your customers.
And at first, they might be laughing at me because these answers are definitely not based on some special knowledge or something that you are learning in school and so on.
KILLER QUESTION
Imagine having ten of your employees on a meeting and asking them: okay, what’s now the best solution you have? No one will answer anything. Or they’ll just repeat after you, the boss. Repeat what you want to hear. And this stifles creativity down to a minimum. It’s a killer.
And when we opened that up and brought this together, they see that they are also customers so they know something about customers problems already. It made the breakthrough because it became personal not just you know, some knowledge coming from the upper level.
Q: Do you include upper levels in the process as well?
Of course, for the success we need these stakeholders on the upper levels. And sometimes I also include upper levels in the process because if they’re open that’s great. But if they just come from the position that they know the answers and it’s only their employees still don’t get it, then it doesn’t work.
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Imagine having ten of your employees and asking them: okay, what’s now the best solution you have? It’s a killer. No one will answer anything.
But when you, for example, give them fifteen minutes to answer anonymously, what the possible solutions are, they will do it. And then if the manager doesn’t criticize every individual and accepts he’s part of the team, then I guess slowly it starts to change this process of trust.
Q: How does an innovation process work? What’s the right sequence for coming to innovative solutions?
The combination of creativity and filtering with decision-making is very important. I’ve seen, even in this startup environment, brainstorming that brings thousands of ideas. And then what? Then you have thousands of ideas, it’s a burden having these thousand ideas which are not even possible to be completed, for example.
And then you start all over the place. You have twenty projects at the same time starting. Of course, you have to filter, you have to do a chosen project all the way up to the MVP and see what happens. What comes out. MVP means minimum viable product, but it still must be viable.
When you brainstorm you should be open. You should be completely blank. You should make everything count. But the same approach doesn’t work in the next step where you have to select the right idea.
Then again. You choose the product and began ideating the features. Once again you should be open and get as much ideas as possible.
Sometimes, you are not able to be viable, and you just say, okay, but I have to do it right now, and then you might miss the critical detail. For example, you forget to communicate to the audience what the benefit of the product is, or something very small that that lacks. And the whole MVP falls down because of this, and it could be prevented. It’s not something it could be verified on the right level.
MVP: Minimum Viable Product, the first version of a product that is acceptable to users and customers. Esential stage in innovating. Just as beacons help ships to find their way, a well-placed MVP significantly increases the chances of success for innovation. But there is even more: MVP’s who are not just technically viable but inspire their first audience – who becomes Ignited Adopters.
So these are some mistakes, some problems that repeatedly come up. If you just do the innovation completely unsystematically, it’s unmanageable. It’s just sheer luck if something happens. Something falls together, but usually it doesn’t. Also MVPs are not the shortcut, sometimes you can get just people who work in the industry think that they know everything about this industry, that they can do the turnaround or the innovate on the whole level just without any pilot, that’s also a possibility, so we know how customers will react, we will invest a huge amount but then okay, but I’m really not that good this is a new knowledge that I didn’t have in the company or something, and it falls apart .
Q: You are writing a book on innovation. What is it all about?
The main idea and the main problem I try to solve and think about is how to get out of the math trap. Being stuck because of all the data you have. It’s really an ocean of data coming from various sources – customers, partners, neuroresearch, everything. All linked to the past. But you shouldn’t always expect that the future will bring the same thing as the data shows you. Especially when you want to go out of the trap.
You need some creative input that will bring you into this new blue ocean that brings new opportunities. Otherwise you will always be in the circle of this red sea.
Q: The problem of being always right?
During our school years we always strived for the right answers, that’s the big part of the problem. Being scared to be wrong because we didn’t get the A mark for the right answer, for example.
But in life, in innovation, in creativity, it’s different. Was Picasso right? Was Dalí right? Because he was innovator, he was doing something completely different. And he dared to do it, and the others didn’t dare.
And I guess that’s where we should learn from the creative people. And That’s what happens being caught into this right and wrong paradigm. Let’s accept being wrong sometimes.
—
The society accepts that you are playful, and that you are laughing, or that you are doing crazy stuff at the playground, but not outside of the playground.
This is not less valuable time. This is not, as we were talking before for example a book is less valuable than writing or thinking or delivering presentations and so on.
Yeah book is book and delivering presentation is delivering presentations, but they’re both important and playground time is just as much important as the delivering value to investors. That’s very hard to accept. It’s easy, but it’s hard because these are values that we live in. But you’re right yeah, we should have time for playing.
Q: Do you have any, parting thoughts that you’d really like to to convey to our listeners?
Yeah, we don’t have to be childish, but being able to awake inner child in ourselves, doesn’t matter how old we are or how in the middle of whatever problems we are – that’s very important for success.
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