From the weird to the wonderful, innovation can move in mysterious ways, whether it’s conversational smart toilets, four-legged concept vehicles, or a boxing “coach” that uses artificial intelligence to communicate.
In a presentation at Workday Elevate London, David Rowan made the point that none of those things are truly impactful on society. And during his time as editor-in-chief at WIRED UK, he explained how he met countless “chief disruptive growth operators” that delivered “mostly pointless innovation theatre—a box-ticking, jargon-led, shareholder-pleasing alternative to delivering genuine transformation.”
While writing his latest book, he decided to seek out the real thing, prompting global research at companies of all shapes and sizes, from diverse industries and different geographies.
Seeking Innovation Beyond the Hype
Rowan told the Workday Elevate audience about how he spent last year researching for the book from 20 countries, from Peru to Australia, China to Estonia, to go beyond the innovation hype that has become an industry in itself—the change agents and co-creation gurus, ideas portals and webinars, make-a-thons and hackfests, paradigm shifts and the pilgrimages to Silicon Valley.
“I was looking for successful incumbent businesses—from media to manufacturing—that had found ways to build new value even as the internet was commodifying today’s business. I wanted to understand the mindset of leadership teams who were motivating their staff to think ambitiously in fresh ways and launch successful new business lines. I sought to learn how company cultures can enable real change,” Rowan said.
Yet he also met companies that faced real challenges. “The corporate directors of innovation I met had all read Clayton Christensen, but for all their excitement about ‘disruption,’ they could never execute as boldly as the founders I’d got to know at WhatsApp, LinkedIn, Google, Spotify, Xiaomi, Didi, Nest, or Twitter,” which he cited as among the most innovative companies he’s encountered. One challenge for those innovation directors is that “often they didn’t have the backing of the CEO or the board, who worked to promote business-as-usual for the quarterly analysts’ reports.”
Rowan outlines the key areas pivotal to genuine innovation. Here we’ve encapsulated the highlights into a top five list:
Innovation Independence Requires Freedom from Investor Pressure
Rowan argues that genuine innovation relies on independence from stock market pressures, highlighting studies on companies that are cooperatively owned by workers, such as Arup (an independent project management firm of designers, planners, engineers, consultants and technical specialists) or by companies owned by their customers, like Op Bank in Finland.
Other examples he shared include family-controlled businesses not accountable to short-term market pressures, including Meyer Innovation Factory, whose mission is to promote design thinking at Meyer, a leading global cookware manufacturer. Other companies with true innovation at the core are still under the ownership of their founders, such as Lei Jun, who oversees China’s Xiaomi, a consumer electronics disruptor, and Sergey Brin, who oversees Google’s X Company, its “moonshot factory,” whose goal is to have a 10x impact on the world’s most intractable problems.
Ilkka Paananen, who runs Supercell, the Helsinki games company behind “Clash of Clans,” has said he wants to be “the world’s least powerful CEO.” Rowan described how Paananen epitomises the rule that non-BS innovation happens when leaders don’t make “innovation” the responsibility of one executive or a team in another building.
Paananen explained in an interview how this approach to empowering employees paid off at Supercell: “the fewer decisions I make, the more the teams are making.”
Build Cognitive Diversity
Cognitive diversity was another area Rowan focused on, saying that “bold ideas flourish where diverse people—in thinking as well as background and demography—come together in conditions that promote serendipitous conversations.” Rowan talked about how London’s Crick Institute is physically designed to enable chance meetings across professional specialisms, helping to tackle genomic illness and cancer.
Backing up this idea, Sara Canaday writes in an article for Psychology Today, “A culture that encourages (explicitly or implicitly) conformity of thought breeds stagnation and imperils a company.”
Embrace Unmet Customer Needs
Rowan shared a story about Intercorp, a vast conglomerate in Peru whose businesses range from banks to supermarkets, that couldn’t hire the talent it needed because Peru’s education system has long been too broken to produce enough quality graduates. So, to meet the needs of tomorrow’s Peruvian workforce, it decided to build schools, and even a university, itself. It has now opened 51 schools and is planning to reach 100. The curriculum is designed by some of the world’s greatest education experts, and the fees are priced cheaply enough for lower-middle-class families while still making a profit. After schools, Intercorp will focus its attention on tackling healthcare, with a national chain of low-cost, high-quality health clinics.
Reframe Your Value
Last but certainly not least, Rowan talked about the importance of reframing an organization’s value. Australia’s national airline Qantas struggled as the economics of airlines became harder to sustain. Holding a customer database containing close to 50 percent of the Australian population, Qantas decided to harness the data it had to diversify into new business areas interconnected to its loyalty programme. Rowan explained that Qantas had created new offshoots in areas such as life insurance and a wine club, and these offshoot operations now account for around a third of Qantas’ profits.
Rowan also discussed the Heywood Hill bookshop in the expensive neighbourhood of Mayfair in central London. “It couldn’t compete on price with the online retailers. So instead, the managing director reframed the business as experts not in book retail but in book curation—with thousands of book lovers now paying for the bookshop’s highly profitable monthly bespoke subscription services,” he said.
Giving examples from his book, Rowan also highlighted the importance of being agile, even if an organization is traditionally not built that way. Talking about the U.S. Department of Defense and its decision to employ Chris Lynch, the Pentagon’s original hoodie-wearing digital guru, Rowan discussed the importance of seconding in creative and innovative skillsets to solve complex problems.
What was patently clear from Rowan’s keynote is that from an innovation perspective, things will never slow down again. The cost of innovation is reducing rapidly and customer behaviour is also changing. This means that small, resilient, cognitively diverse teams with an urge to solve a genuine problem, and a powerful story, will easily outmanoeuvre less-agile companies as we move into the future.