ARTICLE | IMPACT RESOURCES

It’s Time to End the Innovation Theater!

And here’s what it takes…

By Francisco Palao

All organizations need to transform, and to do so they must innovate, do new things, things they didn’t do before to adapt to a changing environment. However, although today’s efforts by companies to innovate are greater than ever, tangible results are rarely achieved.

We continuously witness the innovation theater: inspirational events, workshops, ideation processes, and even highly talented teams working on new projects; yet, in the end, the vast majority of initiatives fail to achieve real impact.

The innovation theater refers to all those actions of inspiration, ideation, and even the development of new corporate initiatives that lack the internal support needed to achieve real results.

We’ve all seen promising innovative initiatives attempted by highly trained individuals, even with the right mindset, only to eventually hit glass walls and ceilings, preventing the project from truly thriving.

The worst part is that in the end we not only waste time and resourcesbut also lose the enthusiasm and motivation of the most talented teams to drive such initiatives forward. Additionally, sometimes we even lose those individuals as they seek other professional avenues where they can realize their potential.

The innovation theater does have some positive aspects.We all read books or watch movies with stories that never come to fruition, but they entertain and inspire us. In this sense, the innovation theater can help generate energy within the company, inspiring teams to think big.

The real problem arises when we get stuck, unable to turn workshop inspiration into actionable next steps; or to convert knowledge from a book into tangible actions; or to materialize new initiatives into tangible results. Essentially, the core issue is that many companies fail to transform innovation into real business value. And this only results in people’s frustration, witnessing the chasm between generated expectations and the reality achieved.

It’s widely understood nowadays that, to innovate properly, it’s essential to put the customer at the center, follow (or create) market trends, leverage the latest technologies, and operate with the right mindset. However, these elements don’t guarantee that organizations can turn innovation into tangible outcomes.

What’s needed to go beyond the innovation theater and conquer the real world? What piece are we missing? We’ve all seen it, but nobody addressed it: there’s an elephant in the room, and we haven’t named it or managed it until now.

The habitat solves the innovation theater.

The key to ending the innovation theater is the habitat, which is the environment and external factors that a new innovative initiative needs to thrive within a corporate context.

Let me preempt that the habitat isn’t something that teams in charge of carrying out innovative initiatives can generate; only organizational leaders can create it. But before diving deeper into the concept of the habitat, let me briefly share a story that will help clarify it.

In a 1972 article published in Popular Electronics, the term “personal computer” was coined. It was to announce the first of these devices, the Altair8800, which took even its creators by surprise when it amassed thousands of orders in its first month of sale. The launch of the Altair birthed a new industry, home computing, which soon attracted new players. IBM made several attempts to release a new product, but due to bureaucratic hurdles and slow, expensive production processes, they struggled. A market analyst even quipped that “getting IBM to launch a personal computer is as difficult as getting an elephant to tap dance.”

In 1980, IBM’s chairman, John Opel, recognizing the innovation hurdle, decided to think outside the box. He started Project Chess, assigning 12 individuals with special permissions to bypass IBM’s established protocols. The team, led by Don Estridge, was located in Boca Raton, Florida, far from the company’s main headquarters in the North. They operated with full autonomy, even making moves that directly contradicted IBM’s internal policies, like using components from other manufacturers. The result was the IBM PC, introduced on August 12, 1981. It became a sales hit, even gracing Time magazine’s cover in 1983. The elephant managed to tap dance.

In essence, for six long years, IBM strived to launch a new product, the personal computer. Yet, they only succeeded when they crafted the right habitat for this innovative initiative to flourish. The habitat was the key to ending the innovation theater.

Just as Steve Blank enlightened us in 2005 that to successfully launch a startup, it was crucial to develop the customer before the product; today, it’s essential to recognize that in a corporate setting, to lead an innovative initiative to success, it’s also crucial to first create the habitat that allows it to thrive.

Understanding Corporate Habitat: What It Is (and Isn’t).

Understanding Corporate Habitat:
What It Is (and Isn’t)

In many ways, we can view innovative initiatives as a seed that needs to be planted in the right place, surrounded by the right conditions – light, moisture, temperature, and so on. No matter how good our idea might be, and even if we have the right resources and the best possible team, initiatives will only succeed if they have the right habitat.

Yet, planting a new seed – an innovative initiative – in an established organization is like trying to make it take root and flourish in the middle of a jungle; a mission that’s nearly impossible for various reasons. Among other challenges faced by innovative initiatives in a corporate setting, or our seeds when planted in the jungle, include:

Misalignment of Interests: Our seed could be swallowed up by any inhabitant of the jungle. In the organization, there will be individuals and sectors that might, without any ill intent but merely pursuing their goals, take our initiative and halt it or morph it into something far from the original vision.
Fight for resources: Our seed might not get the necessary light, overshadowed by daily activities that monopolize energy, time, and the company’s focus.
Urgent VS Important: Our seed might struggle to find a place to germinate, as there are many other priorities and daily tasks that demand immediate attention, possibly relegating our initiative to the bottom of the list.
Execution VS Exploration: Our seed, especially at the beginning, may require nutrients not typically found in the corporate jungle. Established organizations are designed to execute a plan, not to explore new opportunities. Therefore, it might face challenges in its early stages, where there are no set plans but rather lots of uncertainties to clear up and hypotheses to evaluate.

In essence, an organization’s immune system always attacks innovation. That’s why it’s crucial to provide each initiative the space and protection to prevent this from happening.

Continuing with the seed analogy, each initiative needs a pot to let it take root, grow, and develop until it’s ready to be transplanted into its rightful place in the corporate jungle.

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I don’t intend to detail all the elements that make up the habitat or how to create it in this post (I’ll cover that in my next article). But I’ll mention some habitat characteristics to understand what it is (and isn’t):

Supporting External Factors: The habitat should supply essential nutrients to the key elements of an initiative (vision, people, customers, processes, products, metrics, etc.). This means it includes the external factors surrounding the initiative for its proper development. For instance, concerning the initiative’s vision, do we have the backing of an internal sponsor pushing the project? Regarding people, are we providing the team enough time to focus on the initiative? Are we establishing the right incentive system for those developing and driving the initiative? And lastly, about processes, are we equipping the initiative with the agility it genuinely needs when making key decisions or developing its product? Is the initiative ‘forced’ to develop its product using existing departments that might lack proximity to customers or necessary agility?
Preparing Initiatives for the Real World: The habitat should act as training for the future. Just as with natural ecosystems, if we raise an animal in captivity while overprotecting it from the real world, once released, it won’t survive. Therefore, our habitat must simulate and make the initiative understand the conditions they’ll face once transplanted from the pot to the real jungle.
Continuously Assessing Initiative Viability: In innovation, nothing guarantees success in the end. As in the animal kingdom and species evolution, natural selection mechanisms will operate throughout the initiative’s development. Not all initiatives should survive. It’s crucial to halt development on time without wasting resources or energy, but always valuing team efforts and managing communication properly to avoid frustrations.
Leaders’ Responsibility: As I mentioned at the beginning of the article, it’s crucial to remember that the habitat is something that should be driven from the top of the organization. Often, efforts are made solely from the innovation department, but it’s truly the job of all leaders to contribute to creating the conditions that allow innovative initiatives to develop properly. Organizations that genuinely go a step beyond the innovation theater and manage to transform in the best way are those where their leaders not only demand the necessary rigor from their teams to develop innovative projects but also create the mechanisms to generate the specific habitat that each innovative initiative requires.
It’s Not Just a Physical Space: Habitat is more than just a room or place where an initiative happens. Don’t be guided solely by IBM’s example; nowadays, there are ways to create the right habitat without having to physically move people (in most cases).
It’s Not One-Size-Fits-All: There isn’t a universal habitat suitable for all innovative initiatives, as each has specific needs. Just like any living being, every initiative needs its unique habitat. This is why, sometimes, innovation labs don’t yield the expected results, as many of them set a standard process for all initiatives when each requires a distinct journey.

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Creating a habitat for an initiative isn’t about diving deep into the project’s internal details but understanding its specific needs and focusing on creating the external context – the path through the corporate jungle – it requires for proper development. Sadly, this isn’t typically done consciously or systematically, but I hope my upcoming posts will help change that.

It’s time to end the innovation theater! And the organizations that are prepared to create the habitat their innovative initiatives need will be the ones that manage to turn innovation into real impact.

Francisco Palao

Founder of Purpose Alliance and author of the book Positive Impact.