This piece first appeared as an interview in an LBB article
Lilian Tse and Michaeljon Alexander-Scott, co-founders of Thread - a digital business innovation consultancy, write about the dangers of innovation theatre and the four key features of true innovation
Innovation theatre is easily defined: it’s everything that looks like innovation from the outset yet doesn’t create lasting impact on an organisation. We’ve all seen a bit of innovation theatre - usually dressed in jeans and crisp T-shirts, armed with stacks of post-its and the latest industry buzzwords (metaverse, anyone?) - purporting to have a silver bullet to the evergreen business challenges faced by large incumbents. But how many of those sticky notes ever make it off the board and into the real world?
Yet innovation is more important than ever. Recent findings show that 63% of CFOs see new products and services as the most important factor for rebuilding and growing post covid. In contrast, only 6% of executives report feeling satisfied with their firm’s innovation efforts. Why the disconnect? While most people chase innovation, what they actually get is innovation theatre. The two may look similar, but the results they deliver couldn’t be further apart.
True innovation doesn’t have to be complicated, or sparkly. It can come in many different shapes and sizes, whether you’re innovating a process, a new product or a business model. Regardless of the type, at Thread, we define real innovation as ‘the creation of value through original solutions to meaningful problems’. If we’re not creating value for businesses and their stakeholders, including their customers, then it’s a vanity project. If we’re not looking for original solutions, then we’re optimising - not innovating. And if we’re not focused on meaningful problems then we have no north star to guide the initiative, which is a recipe to burn cash.
So, what differentiates innovation theatre from true innovation? We think there are four key features to watch out for.
The four key features of true innovation
1) True innovation is about remixing, not inventing.
Corporate innovation is not rocket science – we’re not sending anyone into space, and we don’t need to invent anything the world hasn’t seen before. Mundane as it might seem, we’re focused on creating lasting impact for the business and its customers
So while it strokes the ego to imagine ourselves at the forefront of an industry dreaming up new things no-one has ever thought of, the reality is most successful innovations are a remix of things that already exist.
TikTok is a great mash-up of already existing products, technology, and cultural insights. US lip-syncing app Musical.ly – popular with tween and teen girls – was acquired by Chinese firm Bytedance, rebranded TikTok, and augmented with a broader set of features popular in China. Then it was combined with the backend algorithm of the internet giant to create the world’s most efficient matchmaker between content and consumers.
When we worked with a Silicon Valley tech company to explore how to design for a future of Augmented Reality, at first glance it seemed like we’d have to chart a completely new path. But it quickly became apparent that those designing for AR had lots to learn from architects, interior designers, and theme park planners, who all have deep expertise in creating 3D environments.
This idea that innovation is a remix is a dirty little secret of the industry – so many innovators want to start with a blue sky and a blank sheet of paper, but that route is more expensive, more time consuming, and less likely to succeed.
2) True innovation is about organisational empathy as much as customer empathy.
Getting bold ideas through an organisation is often more difficult than designing and building them, yet it is often an aspect neglected at the expense of innovation theatre.
We’re passionate believers in the importance of putting the human at the heart of the innovation process. An organisation is made up of real people - the clients, stakeholders and gatekeepers that need to fund the innovation and eventually run the new product, service, or business, with priorities, fears, and anxieties of their own, as well as hard-won insights from years on the frontline. Too often these people are ignored and seen as inconvenient blockers and nay-sayers, rather than a core part of the solution.
A client recently told us, “It’s often easier to put in another meeting than make a decision.”
As an innovator, you’re in the business of building confidence to make bold decisions. This is made all the more difficult by the fact that these decisions invariably require debate, input, and agreement by a diverse group of stakeholders that typically work in silos. You will meet resistance and you will need to be politically savvy – this is a feature of corporate innovation, not a bug.
So it’s made even harder by approaches that focus solely on the exciting new product and service, without giving as much attention to managing stakeholders and helping clients navigate the approvals, stage-gates, and politics of a large organisation.
3) True innovation is just as likely to be about new business models as new technologies.
While new technologies grab the headlines, it’s business models that deliver real value. The most compelling innovations in recent years have been all about an integrated new value proposition, commercial model, and distribution strategy, rather than radically new technologies.
The reason Netflix beat Blockbuster was not the use of new tech, it was a new business model: no late fees, subscription rather than pay-per-film, and straight to your door delivery. Netflix then innovated on their business model yet again with a streaming service. Even sectors that are heavily tech-based, such as gaming, have seen just as much innovation around the business model as around technology: think of free-to-play games with in-game purchasing like Fortnite and Roblox – a totally different business model to paying £40-50 for a title – one of the core reasons they have scaled so quickly.
It remains much easier to rush to the latest technology and hope it’s going to solve all problems - it’s shiny, sexy, and simple to PR.
In contrast, reinventing your business model is more difficult. It requires coordination and decision-making across multiple departments to get right, and a high degree of internal communication to assuage fears over cannibalisation of existing revenue streams, the loss of jobs, or the loss of an existing power base within an organisation. In the long run, however, this is more likely to deliver value.
4) True innovation recognises that launch is just the start.
Your job as an innovator is to learn as much as possible as fast and cheaply as possible – and you learn the most after launch when data is plentiful and much more reliable.
Instagram was first known as Burb, a place for users to check-in to their favourite destinations; Pinterest was an e-commerce site called Tote, while YouTube was a video dating site. It took live feedback in the form of real users interacting with a real product for the teams to work out what customers really wanted (or didn’t want).
True innovation recognises the need, and plans for, post-launch pivot and adaption. It’s impossible to know ahead of time how customers will react in a real market, that’s why experiments testing market demand beat research asking for opinions and intentions.
Still, too many consultants and clients spend too much of the budget upfront, gold-plating prototypes and building towards a big shiny launch, leaving very little for the post-launch period when it’ll most be needed to act on real market data. A soft launch may be less sexy but having the budget and data to help you learn and pivot is more likely to lead to long-term success.
As you can probably tell, true innovation is quite pragmatic in nature. Though it may sometimes lack a sexy exterior, it more than makes up for in results. After all, the longevity and success of true innovation is ultimately what most companies are looking for.