Breaking down the Barriers to Innovation

PART- I

Leadership – The HiPPO Culture

Summary: How does “Innovation” impact businesses and enterprises? In this blog - I will try to analyze various organization challenges which poses a barrier to innovation. I will address each challenge in parts so that readers can digest...! Part-I for today’s blog is on “Impact of Leadership on Innovation”.

“Innovation” – what does this word mean?

Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services. This sounds like “Chatur of “3 Idiots”.. isn’t it?

In simple terms – Innovation is nothing but “Change”. When we try to do things in a different way to adopt or disrupt is called Innovation. Recent pandemic has taught us to be “change catalysts” and most of us have become “disruptive innovative” in this “New Normal”. World economy which is completely disrupted by the innovation of “corona virus” is in dire stress to break the barriers of innovation to survive and get back to normalcy.

Business and Enterprises have spent billions to spur innovation, yet survey after survey indicates that these efforts are not producing results. Why?

Because – Enterprises and Businesses have failed to address organizational challenges and whether all of them of few of them poses a barrier to innovation within their business. They have failed to recognize “Change” and hence failed to address “Digital Complacency”.

Interesting fact is that many of the companies that have been disrupted saw this coming. Many laid their industries foundation on innovation but are now unable to compete in a market they once dominated. Nokia is the classic example. Apple didn’t invent the smartphone, neither were they first to market with their iPhone. However, their approach to innovation and customer centric philosophy has completely disrupted the mobile phone market and made them a trillion-dollar company.

Businesses must identify – which organizational challenges (Most common Organizational Challenges are – Leadership, Situating Innovation, Test & learn Culture, Risk Aversion, Un-killable Innovation Projects, Celebrating Failure) are “a barrier”- “why it is a barrier” and “how could they improve?”

Leadership: Leadership is the most important part of any business. Organizations who have disrupted the market with innovation have lots to do with their leadership. A well-known example is the way SpaceX has been able to disrupt the entire aerospace manufacturing and space transportation industry, almost overnight.

Therefore, the question is - How do you learn to lead without deciding and let go of the HiPPO rule, where the highest paid/designated person’s opinion determines things?

Most businesses are in paradox because of their leadership. They run by “HiPPO” Rule where the highest paid/Designated person’s opinion determines things.

Traditionally – we humans have a tendency for “Authority Bias”. Most of us (the professionals) tend to believe in those; we perceive as “experts” and do what they tell us to do (classic command-line structured organizations). This tendency has served us well in many instances/situations, however in business it can/has shut down dissenting and valuable opinions, which is very harmful for today’s business. The quantity and quality of data available today, for organizations most likely not relying on data to inform decision-making is because of HiPPO effect.

This Bias has created a barrier in decision making. HiPPOs usually have the most experience and power in the room and once their opinion is out - voices of dissents are usually shut out. Sometimes due to this culture of “Authority Bias”, others fear speaking out against the HiPPOs direction even if they disagree with it and they acquiesce to the highest paid person’s opinion without a challenge, it just adds to the highest paid person’s confidence and sense of superiority – that begins a vicious cycle which is hard to Stop.

When a leader has lost touch with customers and market trends or fails to remember that the team has valuable insight, the HiPPO effect is in full action.

Another barrier is that HiPPOs do not include the customer-facing teams to engage in planning; and it further afield the company from solving the actual problems of their real markets and customers.

How to Improve the Leadership Barrier:

Most organizations and business have been traditionally built and hence they have been valuing the loyalty more than anything. While Loyalty is particularly important to any organization – it has created leadership, which has their approach mostly driven by HiPPO rule. It has been perceived as virtue within an organization and hence the HiPPO effect has been a vicious cycle to an extent within organization. There are variety of strategies that can be used to improve the leadership barrier. Some of them are:

Fight with Data: There is a famous quote from Dan Barksdale of Netscape – “If we have data, Let us look at Data. If we all have Opinions, Let’s go with mine”.

This encapsulates the problem of a HiPPO and the Solution. In the absence of Data- HiPPO wins every time. Depersonalizing the decision making with Data is the way to tackle this barrier.

Prioritize the Work: Aside from having hard data to use in challenging a HiPPO’s directions, another important thing is to have a solid, prioritized, and clearly elaborated product/solution backlog (or roadmap). HiPPOs will assert that is obviously the most important thing but when faced with other HiPPOs within the company – this can fall below the consideration if not prioritize the work based by solid data.

Deflect the Input: Many a times HiPPOs decisions or objectives come out of nowhere, with no warnings. In such scenario – you may not have data and attempts to get the HiPPO’s buying to prioritize your work or decision can be a difficult turf. That is where deflection approach is best. Rich Mironov of Mironov consulting has below quote which explains the approach to deflect the impact of the HiPPO’s decision:

“That’s a very interesting and smart idea of yours. Let’s take it offline so that I can learn more, write up some requirements, and see what kind of effort we’re looking at.”

It reinforces the HiPPO’s position of authority, gives their ego just enough polish so that they do not feel attacked, and buys the team valuable time to validate the opinion and hence decision making.

Some of the other methods which are related with Depersonalizing the decision making are:

• Benchmarking

• Leverage Competitive Analysis

• Experimentation and Testing

• Transparency

In Part-II – I will analyse another important Barrier - Situating Innovation