TransformationDec 07, 2023

How to be innovative: The innovation mindset

Blake Barnes

The word “innovation” is often tossed around, yet it can mean many different things to the institution pursuing it. It’s a hard thing to define, and often, even harder to make real. Innovation is not something that just magically appears, it is something that must be cultivated.

So when organizations want to be innovative, where should they begin?

Innovation starts with a shift in mindset. In order for systems, programs, and organizational changes to stick, our collective view on innovation is that is has to be treated as a “creed”, not just an aspiration. This is the beginning of the cultivation.

At Credera, we commonly see organizations jump straight to tactical actions rather than changing the principles that promote innovation, making their innovation efforts short-lived.

To enable true innovation, we come alongside and ground our clients in this “creed” of innovation. With that, let’s dive into what we believe it takes to live out this creed and thus, truly be innovative.

Four aspects to the innovation mindset

Being innovative can be challenging. Many people think they either have it or they don’t. We are here to tell you that is not true. In our experience, quality innovation consists of four simple components:

  1. Necessity that drives creativity.

  2. Design thinking.

  3. Aptitude toward action.

  4. Relentless testing.

While you may not transform into the next Tesla overnight, applying these four components will set you well on your way to being more innovative.

Creativity demanded by necessity

MacGyver. You probably know the name from the popular 1980s series. But why? Other than his name becoming a verb (“Wow Amanda, you really MacGyver’d your way out of that one”), MacGyver was a crafty problem solver who could turn a paper clip into a bomb-neutralizer. He could defeat a battalion with his shoelace. MacGyver faced problems that needed a quick and effective solution to get out of a pickle and tackle the challenge—all with scarce resources. But was MacGyver given an instruction manual on how to disarm the explosive? No, he needed to think creatively on how he was going to use the materials at his disposal to solve the problem.

Whichever way you look at it, innovation mandates creativity. It requires thinking outside of the box to launch a groundbreaking product, enter an untapped market, or push back the status quo your organization may be stuck in. We do this by encouraging exploration, tinkering with concepts and ideas that may end up in failure, and not demanding results from the ventures of your company’s pioneers—which we’ll cover more in a bit. Approaching the problem in a new way is a must if you’re looking to meaningfully make waves for your customers and industry. And seeking that novelty requires persistence, risk-taking, and investment.

So what makes creativity within innovation different than a traditional project? Innovation provides a new landscape of expectations, allows teams to challenge long-held assumptions, and gives the blessing for teams to fail. In fact, within innovation, teams are often encouraged to fail. And failure takes persistence, risk-taking, and investment. When you don’t give the

margin to teams through investment, you don’t allow them the space to play with ideas, the time and space to think, or the excitement to forge a new frontier. If your budget allocation demands and expects teams to generate higher return on investment, to grow bottom line revenue, and drive key performance indicators closer to strategic goals, then you’ll never let off the gas to the point where your teams can get creative and innovate. Conversely, they can’t because deadlines and executive mandates are consistently breathing down their necks.

In most companies, executives don’t want to throw good dollars after bad; that’s often how organizations see innovation. They don’t want to invest their hard-earned dollars after some frivolous “research and development” or a “pet project.” Part of innovation is being willing to spend 5-10% of your budget on innovative experimentation so the other 90-95% of your budget is that much more effective. What we call this in the innovation world is “taking small bets.” Of course, creativity and action require funding, so let’s turn to a Harvard Business Review article on prioritizing your innovation budget to inform us:

The article surveyed managers from a variety of industries about how they currently spend against these buckets and how they wish they distributed spending. Here’s what they said:

Unsurprisingly, we see managers instinctively think “tomorrow” is being underserved. And despite it being daunting, that shift of spending can, in fact, be done and be done well. By finding ways to reallocate 10% of day-to-day operational spending, you’re funding to build tomorrow, distributing your risk to both sustaining and disruptive innovation. I know it might be scary to bring down your lifeblood budget by 10%, yet as Jeff Bezos said, “I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.” You don’t have to solve this overnight, but what box do you see in your operation today that could be tightened?

The bottom line is innovation can’t live without creativity, and creativity can’t live without some level of investment, margin for your people, and assumption of risk. Taking those small bets will make your innovation journey not only much more palpable, but also more successful.

So you might be thinking, “OK, so you’re just asking me to pull a rabbit out of the hat like it’s nothing? Thanks a lot for that sage wisdom, buddy.” We’re about to share where the structure of innovation comes into play.

Meet your instructor: Design thinking

Consider the practice of taking up jiu jitsu. But jiu jitsu isn’t something like, say, running. With running, you can simply put on shoes, grab your headphones, and run. Sure, there is technique in it, but it depends a lot more on athleticism and fitness than it does technique. I’m sure a few of you reading this can agree if you’ve done much running—sometimes you just have to slog it out.

But jiu jitsu? Jiu jitsu really is all about technique. Let’s illustrate: A close friend, Bubba, wrestled competitively in high school, is a sizeable guy, and started going to jiu jitsu classes. As a sparring partner, he was paired with the head instructor’s 12-year-old daughter. In his first few sessions, he got absolutely tossed around by the instructor’s daughter. She easily weighed 100 pounds less than him, and she was flipping him like a pancake. That’s because the daughter had her dad as a jiu jitsu instructor to teach her technique and Bubba merely had size and strength.

Design thinking is like our instructor. It teaches us to use techniques to convert the momentum of our opponents, or our challenges, into our successes.

Design thinking is a human-centered way of incrementally developing and designing solutions to the world’s most perplexing challenges and deepest customer needs. We have seen design thinking time and time again provide appropriate structure to the talented minds we work with. Notice that I said “appropriate,” not overly done, not stuffy/fluffy, and not misleading.

Design thinking takes on the form of divergent and convergent teamwork. From problem identification, research, ideating, deciding, and then doing something, design thinking takes the best research, the best clarity, the best creativity, and the best empathy you have, and helps you get out of the rut of doing things like you always have. You can read more about Credera’s perspective on design thinking, but for the meantime, we want to touch on design thinking because it serves as the brakes and steering wheel of the sports car we’re driving.

For design thinking to work, we borrow from agile principles:

  1. Focus on customer needs and business outcomes (instead of activity and outputs).

  2. Deliver value early and often (instead of waiting for perfection).

  3. Learn through experiments and data (instead of opinions and conventions).

  4. Use cross-functional collaboration (instead of siloes and hierarchies).

  5. Grow utility players (instead of those who say, “Well, that’s not my job”).

  6. Respond to change/feedback (instead of following a static, myopic plan).

As you look at these principles and their contrasts, you can see that design thinking promotes following the facts, being swift in response to customers, and working as a dynamic team.

Aptitude toward action

As President Theodore Roosevelt famously said, “Get action; do things; be sane; don't fritter away your time; create; act; take a place wherever you are and be somebody; get action.” You can’t be innovative if you don’t create, or at least dare to do something. So get out there and start. Build a prototype, a mockup, a wireframe, a concept card, a straw man, or something else to communicate what it is you are thinking.

Perfectionists and creators will forever be plagued with getting it good enough on the first go. Whether it’s your executive sponsor or a particularly picky customer, there is always a higher power to answer to, which is why we always take the bite-sized actions of testing for directional learning at first (we’ll touch on that in the next section).

In the theme of action, people often feel like they risk too much by creating something that isn’t good enough. That is a risk. Yet equally and opposite, you impose risk to the potential value you might gain if you wait to act. Waiting is risky, arguably more than risking something initially not being perfect. The adage you may be more familiar with is “perfect is the enemy of good.” Your idea doesn’t have to be perfect right out of the gate. All that matters is that you incrementally build something so you can begin to extract lessons from it.

So that grandiose vision you’ve been stewing on for some time now—set aside some time to ask yourself practically and reasonably: “What is the first baby step I can take toward this dream?” All that’s necessary is that you take a place wherever you are, be somebody, and go get action, however small it may be.

Relentless testing

If you were trying to be a Michelin-star chef, would you serve your first attempt at a duck patê to a world-renowned food critic? No. You would almost certainly not receive a Michelin star on your first try. Instead, you would make it, serve it to some of your friends, get their feedback, and adjust. And you could very well make that same dish hundreds of times before it’s perfect.

In this example, what this chef is doing is testing. In innovation, we test things to make sure it’s generally right before we move on to its next evolution. Using our duck patê analogy, each time you make that dish and serve it to your friends (low risk), you learn a little bit more about what works and what doesn’t. Same with innovation, each iteration you test, you gain more understanding about meeting your customers’ needs.

As you test, you learn. You learn what works, what doesn’t, and new things you hadn’t thought to try before. We test in innovation through the means of prototypes, or simply put, a shoddy, yet effective first version of the idea. The reason for building a prototype quickly (even if it is not perfect) is so teams aren’t wasting time perfecting the concept. All we want out of this is a directional reaction—in no world would we expect this to be a fully functional version of what we envision it to be. When we educate ourselves on what doesn’t work, that gives us a deductive way of steering clear of that pitfall and toward the sweet spot.

In a strawman fallacy you misrepresent someone’s argument to make it easier to attack. Unlike in philosophical debate, innovating like this is a good tactic. The prototype you rapidly made is the strawman that allows you to quickly find out what is wrong with your idea, allowing you to then fix the weaknesses and amplify the strengths. The added benefit being that creating a prototype is much quicker and cheaper than building a fully market-ready product and the costs of failing are much less as well. SpaceX has used this methodology relentlessly to fuel their success far beyond NASA and other government contractors.

Failing that produces learning is not failure. The word “learning” is what matters here. Learning is the outcome we are seeking. Failing and walking away from a situation without taking any insightful party favors is a waste of your time, effort, and resource. As Julius Caesar once said, “Experience is the teacher of all things.” You act to learn, and you learn to improve. Don’t let your efforts go to waste. Be relentless in testing to learn what worked and what didn’t, then get back on the horse and take your next step.

Moving forward in your innovative journey

We don’t want this article to be platitudinal. It’s our sincere hope you find at least one point in this piece to be applicable, even if it’s just a slight shift in your ideology.

So let’s apply some of our own meta-innovation here: Pick just one thing from above and see ways you can take your first baby step. Is it reallocating $10,000 from your annual budget to go tinker with that seedling idea you’ve sat on for years now? Is it finding a way to balance your creativity and risk-taking? Is there a better way to capture lessons from the projects you’re tossing in the bin?

To summarize (and if you want some succinct phrases to put at the end of your company’s “Innovate!” memorandum), here are a few suggestions:

  • Let’s take a lot of small bets.

  • Technique over brute force.

  • Good enough is great; perfection is a pitfall.

  • Fake it till you make it.

  • Move fast, learn fast.

  • Tinker, design, build, test, learn, iterate; Repeat.

  • Data makes our decisions for us.

If you would like to learn more about adopting an innovation mindset, contact Credera at findoutmore@credera.com to start the conversation and unlock the full potential of business innovation.

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