Why Companies Do ‘Innovation Theater’ Instead of actual Innovation

By Steve Blank

Disruption today is more than just changes in technology, or channel, or competitors—it’s all of them, all at once. And these forces are completely reshaping both commerce and defense. As large organizations face continuous disruption, they’ve recognized that existing strategy and organizational structures aren’t nimble enough to access and mobilize the innovative talent and technology they need.

Over time, as organizations grow, they become risk averse. The process people dominate management, and the product people end up reporting to them. If the company is large enough it will look to the government and regulators as the first line of defense against innovative competition, and they’ll use regulations and lawsuits to keep out new entrants with more innovative business models.

The result of monopolist behavior is that innovation in that sector dies—until technology/consumer behavior passes it by. By then the company has lost the ability to compete.

Often the first plan for innovation is to hire management consultants, who break out their 20th-century playbook. The result is organizational theater. At the same time, companies and government agencies typically adopt innovation activities (hackathons, design thinking classes, workshops and the like) that result in “innovation theater.” These activities shape and build culture, but they don’t win marketplace wars.

Finally, companies and government agencies realize that the processes and metrics they put in place are obstacles to innovation. Efforts to reform and recast these are well meaning, but without an overall innovation strategy it’s like building sand castles on the beach. The result is process theater.

Companies and government agencies are not able to access and mobilize the innovative talent and technology they need to meet these challenges. The very processes that made them successful impede them. We can build a mind-set, culture and process to fix this.

Steve Blank is an adjunct professor at Stanford University, a senior fellow at Columbia University and a lecturer at the University of California, Berkeley.

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