“Managers don’t want to innovate”

I read recently a good post by Ron Ashkenas entitled Managers don’t want to innovate.  He described the phenomenon I’ve described in Relentless Innovation, which is that managers are overly focused on the work they do regularly, and often resist or avoid innovation.  Ron lists three reasons:

1. They need immediate results
2. They fear cannibalization
3. They are familiar with slow, continuous improvement

All of these facts are true, yet they fail to convey the full picture.  When we at OVO work with clients, we can see two competing forces at work:  the desire to be more innovative, competing with the need to be effective and efficient and to deliver the quarter.  The urgent always wins when matched against the important.

It’s not that managers don’t want to innovate, it’s that they recognize the work involved and carefully balance how much work, and risk, and time executives will make available for innovation, and come to the often reasonable conclusion that innovation is a distracting exercise which won’t result in a positive outcome AND will impact the short term.  This isn’t venal – it’s actually working to the best interests of the corporation.

I’ve worked with plenty of “middle managers” who understand the need for innovation, who want to innovate but don’t have the resources, time or agreement from their executives.  The kind of investment required to do more than simple incremental innovation must come from an executive commitment or vision.  It won’t “bubble up” from staff or middle management.  They already have 60 hour week jobs.

One other point, about cannibalization.  It’s not just managers who are concerned about cannibalization.  I’ve been in senior executive meetings, and even board meetings, where excellent new products were rejected because they threatened the profitability or viability of existing products or revenue streams.  What you see in mid-management levels is just prescient prediction of the reaction of senior executives.

As Jack Welch said – show me a person’s timecard and I’ll tell you how they are evaluated.  Clearly, managers are paid to:

1. Deliver in the short run with less emphasis on the long run
2. Protect the status quo
3. Tweak the products, not disrupt the product or market

Smart managers understand how to maximize compensation and reduce dissonance and risk.  You want more innovation?  Change your evaluation and compensation structures to encourage it.  Ask for disruption and cannibalization of existing products and markets.  Demonstrate the importance of innovation by funding it appropriately and giving it time to mature.