Michael Wade is a Professor of Innovation and Strategy and holds the Cisco Chair in Digital Business Transformation at the International Institute for Management Development (IMD), a business school in Lausanne, Switzerland. He is also the Director of the school’s Global Center for Digital Business Transformation. Wade has published more than a hundred case studies and articles and ten books. His latest book, published in 2021, is ALIEN Thinking: How to Bring Your Breakthrough Ideas to Life. His 2019 book, Orchestrating Transformation: How to Deliver Winning Performance with a Connected Approach to Change won multiple awards. Wade founded and directs Europe’s first and largest program for executives on digital, Leading Digital Business Transformation. and has directed custom programs related to strategy and digital business transformation for Vodafone, AXA, Tetra Pak, Honda, Gazprom, Credit Suisse, and Cartier, among others. He recently spoke to The Innovator about how to create an innovation culture and measure success.
Q: What are some of the key takeaways from your book ALIEN Thinking: The Unconventional Path to Breakthrough Ideas?
MW: My co-authors Cyril Bouquet and Jean-Louis Barsoux and I wrote this book because we were frustrated by the basic lack of innovation and creativity in organizations, despite the fact that great tools are available. We used the term alien thinking for two reasons. One is that we liked the metaphor. Think about what an alien would experience when he comes down to earth and sees everything for the first time. When your senses are heightened you see things that ordinarily you would not. Children do that but we adults lose the ability to see the world as an alien. We let our assumptions guide us and we don’t challenge them anymore. To be more creative you need to flip around the notion of déjà vu – that feeling that you have seen something before – and do the opposite. Take something you see every day and try to really see it as if you were seeing it for the first time. The second reason we chose the term alien is because each letter stands for an action that is necessary for organizations to become more innovative.
Q: Can you literally spell these out for our readers?
MW: The A is for attention, we need to pay a lot more attention to what is around us, including zooming in and looking closely and zooming out to get perspective. This is a great way to gain insights, but insights alone are not enough, which is why we need the other letters. L is for levitation. Our agendas are so packed we don’t have time to step back. Taking time off is important. Professional athletes and musicians take breaks. Executives need to do this too. I is for imagination. All kids have great imaginations, but life beats it out of us and we stop being playful. George Bernard Shaw said it best. ‘We don’t stop playing because we grow old. We grow old because we stop playing.’ E is for execute and N is for navigation. You can have great ideas and projects but if you are not good at selling your ideas and projects internally, they aren’t going to happen. Aliens are shot down and the same thing can happen to innovators.
Q: When it comes to bringing innovation in from the outside a number of companies are switching from accelerators to company building – ie setting up outside companies that serve as speedboats. What’s your take on this approach?
MW: Company building rarely works. Separating works if it is something outside the core and will always be outside the core. If not, and plans are to eventually reintegrate it, the longer you leave it outside the more time there is for the company to create its own system around this area and the harder it will be to reintegrate. Most successful models we see focus on a separation within the structure with ring fencing around the initiative and interplay and interaction between the people on the inside and on the outside making sure processes are aligned, so when it comes time to reintegrate there is not this big explosion.
Q: What are some of the biggest mistakes corporates make when approaching innovation?
MW: Many companies put in a lot of money, time, and energy into digital transformation and don’t get a lot out of it. They need to figure out what are the right KPIs to apply to innovations and to digital. Who cares how many times something has been downloaded? Different KPIs need to be developed that are linked to business goals. Most KPIs are too general or too specific or too high level such as the impact on the company’s ROI or market share. Others are really tactical like number of impressions on social media and are not necessarily performance measures. What is needed are measurements that fall somewhere in between.
Anther mistake is using one process for all types of innovations. Not all innovations are the same. Some need to be given a lot more space.
Narrowing too quickly on a particular solution is another pitfall. Often there is lot of pressure to do something and before the company knows it they have fallen in love with an idea even though there are lots of reasons why it may not work.
Companies also don’t give enough consideration to the navigation challenges. A bunch of smart people who are given time, space and money will come up with great stuff and POCs [proof of concept trials] that look great but when the projects move from startup to scale-up fail miserably because they underestimate how long it will take and hard it is.
People inside corporates additionally tend to underestimate the strength of the company’s own immune system to reject new breakthrough ideas and solutions. The CEO may state ‘my door is open, and I will never say no to a great idea’ but two or three levels down the managers will just laugh and tell you it is never going to happen, so you have to look at changing the company culture as well.
Q: Most corporates I talk to say the hardest thing about digital transformation is change management. What advice do you have for corporates that are struggling with organizational change?
MW: Most digital transformations are very likely to fail. There has been a lot of research on this. The model for a successful digital transformation is an orchestra; you have got to get all the instruments to play together. There are different elements that are important to get right. The first is the go-to-market strategy. Are there products you are selling that can be digitalized? How can you use digital tools effectively to reach your channels? Another important element is engagement with key stakeholders like your customers, your employees and your suppliers. How can you use digital to capture insights? You need to get your internal IT operations in order. Ask yourself if you have technology foundations and processes that are stable and secure yet flexible. And finally, there is organizational structure, a company’s lines of business, functions, geographies and incentives. If you don’t change the way people are rewarded don’t expect them to change. Changing the company culture is really difficult but you can do it. Treat it like a project. Understand it, benchmark it, identify which areas are strong and which are weaker and put programs, processes and incentives in place. Steering culture changes in the right direction is very hard work. It is why some organizations are getting rid of a digital role or transformation role and instead creating orchestration roles.
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