Innovation is “in.” In 2014, the U.S. Agency for International Development and U.K. Department for International Development have both launched sizable initiatives: the U.S. Global Development Lab and the Global Innovation Fund, respectively. Innovation hubs, incubators, and accelerators are popping up like mushrooms. Partnerships—especially with the private sector—are widely seen as essential to the innovation of solutions with scale.
So it seems that development professionals have a historic opportunity to disrupt the way development is done. But can we seize it?
Development organizations would do well to pay attention to the mounting evidence about innovation from the private sector. The unfortunate fact is that ALL organizations are engineered to do exactly what they are already doing. They find it difficult—often impossible—to introduce innovation beyond tweaks around the margins. As innovation gurus such as Clayton Christensen and Constantinos Markides have pointed out, start-ups are more likely to introduce radical innovations than incumbents, and even drive them out of business. Think Amazon vs. brick-and-mortar bookstores.
True innovation requires incumbents to think, learn, and act differently—to scrutinize their ingrained ways of doing things and turn core competencies into commercial possibilities. Yes, commercial. Radical new approaches to development problems need to align the incentives of all involved, and likely entail profits for private sector actors—from small and medium-sized enterprises through to corporates with large value chains and footprints. Too often, innovation is confused with the need to come up with new ideas. But that is just one facet of the larger problem. For innovation to work, it must be practical and profitable.
Experience across sectors tells us that top management must take the lead on innovation. They need to take more than a “thumbs up, thumbs down” approach to adopting new ideas. They must play the roles of co-creators, sponsors, mentors, and advocates. The first step is creating a shared understanding of what innovation means.
Certain key principles—borrowed here from recent work by Peter Skarzynski and David Crosswhite (The Innovator’s Field Guide) and Nathan Furr and Jeff Dyer (The Innovator’s Method)—apply to any organization committed to innovation:
- Leave hierarchy behind: Innovation can come from anyone, at any time, in any place. Organizations need to be as open as possible internally and encourage everyone to continually provide answers to the question: “If only I could…”
- Embrace internal disruption: Organizations should understand all aspects of their own business model (Who? What? How?) to figure out which elements need disruption. Innovation efforts often focus too much on the “what” without encompassing the “who” and the “how” pieces of the model.
- Focus on the customer: Successful innovation revolves around the customer, not the organization. We must be obsessed with identifying our customers and solving their problems. Think about the “jobs to be done” from the customer’s perspective to make sure we’re going after a problem worth solving. This is where our field can incorporate a lot more “[design thinking](/articles/design-thinking-and-development)” and “pain storming.”
- Engage in white space thinking: How can we identify opportunities in adjacent and non-core spaces by pivoting to new areas based on a core competency or strategic asset?
- Identify the elements of success: Organizations should dissect major organizational successes over the past five years and understand what made them work.
- Pinpoint orthodoxies: Institutional assumptions about “the way things are done around here” also need unpacking to understand our blind spots. What would we choose not to do? Why? Does it still make sense in today’s changing marketplace?
- Forget the business plan: Most successful entrepreneurs and intrapreneurs achieve success though iteration, testing, and validating. Business planning works when there is relative certainty, whereas innovation by nature is infused with uncertainty. Low-cost and quick prototyping or experimentation through a “minimum viable prototype” are models we should emulate.
- Fail often, fail fast: Google has found that 95 percent of new ideas don’t work, but the ones that do are game changing. Development organizations need to quickly let go of ideas that will not work and move on to the ones that do—based on clearly articulated short- and medium-term milestones.
- Experiment, but mitigate risk: The flipside of the failure coin entails understanding the risks of launching a new idea and the assumptions that must be true for that concept to win in the marketplace. Understanding and actively managing risk will help us build appetite for prototyping and launching quickly, as opposed to falling into “analysis paralysis.”
- Establish criteria for prioritizing opportunities. Most of our organizations will not have a problem developing ideas, but what are the criteria for selecting ideas to take through to commercialization? Criteria could include customer benefit/problem solving, competitive advantage, size of the prize, timing (how fast can we be?), gateway potential (is it a first step to developing additional opportunities?), barriers to be overcome, and so on.
Many in the development community would look at this list and say we have a long way to go. The question is how to get from here to there. Once again, we can take some hints from the private sector. To promote internal entrepreneurship, our organizations need to build a lean innovation architecture that enables fast decision making. Bureaucratic processes that mimic our reactive culture (RFPs and RFAs, proposals and grant applications, lengthy reviews) may have a place for some purposes, but will not likely promote the game-changing innovation we need.
Mechanisms like Shell’s GameChanger hub and/or distributed innovation hubs in the field will be key to success. Quick-turnaround tools like “sandpits,” to come up with ideas in a week’s time and then roll them out quickly, are another option. IBM’s IdeaJam, a crowdsourcing process to rapidly capture ideas across the organization, is also an interesting model. Idea bars, bureaucracy buster awards, innovation marketplaces, IdeaBoxes, launchpads—whatever the mechanisms we choose, our goal should be a continuous process as opposed to relying on one-off challenges or competitions, with pathways in place to take new concepts all the way through to implementation. We want to avoid “innovation islands” that fizzle and die after an initial phase of excitement.
One thing is clear: it will not be possible to shift our organizations toward the kind of mindsets required for innovation by assigning one person to the task. We need to build an innovation ecosystem within and across our organizations, starting with a core team endorsed by top-tier leadership. This team should cut across organizational, functional, hierarchical, and geographic silos, with an emphasis on people in the field.
If we are to reinvent development, we need to remember the old adage, “physician, heal thyself.” We need to build a new generation of self-critical organizations—public and private, for-profit and non-profit—that are willing and able to disrupt themselves, now and continuously into the future. Anything less and we may be left in the dust by new players on the development scene, and deservedly so. Worse, we may find ourselves a decade from now still wondering how to deliver on the same grand challenges we face today.