Innovation in a 2x2 matrix.

Innovation. Ingenuity.  Ideation.  I’m not sure what it’s like in other industries, but in the tech industry (where I’ve spent pretty much my entire 25-year career) and in the technology groups within other industry companies, there is never a shortage of new ideas.  Tech companies are constantly trying to out-think and out-innovate their competition.  They are constantly looking at new technologies to adopt or incorporate into their businesses or product lines.  I’m not talking about continuous improvement – always looking for ways to incrementally improve what they already do – I’m talking about brand new…green field…blue ocean…white space…thinking.  And, from this thinking comes ideas and concepts followed by proposals and pitches and project plans and then, in some cases, followed by funding and a green light or gate approval – whatever the processes may be. 

On the flip side, since time, energy, and money are all limited resources, very often projects need to be killed or shut down.  The opportunity just doesn’t seem as big as it did when the project was originally approved…or maybe market conditions changed…or maybe, as is often the case, the assumptions that were baked into the original proposal weren’t accurate.  So, we have two independent dynamics at play here – the level of effort required to approve new initiatives and the level of effort required to kill initiatives.  So, let’s create a 2x2 matrix to explore this a bit further. 

Let’s start with the bottom left. Hard to approve and hard to kill.

These companies haven’t figured out how to innovate.  They are old, tired, and any “green field” projects they do have going on are likely stuck in a rut.  They take too long to try new things so that by the time they do approve a new initiative, they are so invested in it being successful, killing it is akin to killing a core line of business.  These companies usually stagnate until a competitor wakes them out of their comfortable slumber.

Moving to the bottom right.  Hard to approve and easy to kill. 

To be honest, I don’t think I’ve ever been in a company like this.  I suspect there are examples out there, but I would have to imagine that a company that is overly-analytical about approving funding for something, but extremely quick and efficient to kill projects that are not showing signs of promise, would be cash rich, but innovation poor.

Top left.  Easy to approve and hard to kill.

Ah, yes…this is where I believe the majority of tech companies live.  They know they need to innovate and move quickly, so they approach new investments and new projects with a risk-taking mentality.  Quick analysis followed by a healthy dose of “gut” and ideas and projects can get started.  Especially since starting projects that you consider risky or speculative doesn’t usually require too much investment up front; these companies often take a “let’s dip our toe in the pool” approach, let’s build a prototype or an MVP (Minimally Viable Product).  But, once something has started and people are working on it, no one wants to declare something a failure.  A failed project has to be because of a failed team working on it, right?  Wrong…but that is often the feeling inside these large organizations.  As a result, lots of projects keep plodding forward that should have been killed a long time ago.  It’s like a zombie apocalypse – undead projects wreaking havoc on innocent employees.  So, does the company slow down approving of and investing in new projects because they recognize they have too much on their plate?  Heavens no!  That would be heresy.  So, you end up with a company that is scattered and spread way too thin over a potentially ridiculously long list of projects.  This is also what happens when a company doesn’t have a clearly articulated strategy to inform the types of projects it should pursue.  (Strategy is all about knowing what to say no to.)

And finally, we get to the top right.  Easy to approve and easy to kill. 

This is the ideal state…where everyone wants to be.  Companies that can sustain extended periods of time in this quadrant are nimble, fast, and very innovative.  They are unafraid to take risks and unashamed to declare something a failure.  They experiment constantly and focus on getting better at identifying a success earlier and earlier.  Because the sooner they can identify something is or isn’t going to work, the more efficient they can be at innovating.