Innovation Doesn't Happen On Schedule

When I think about the most valuable ideas I encountered at work, I struggle to list any that happened during scheduled ideation meetings. Instead, they subtly appear in every other moment except the one they’re created for. In the kitchen. In the hallway when talking about something else. Or at a gym. Never when it’s expected.

And the expectation is usually as follows: let’s organise a meeting, perform a brainstorming session, and list out next steps with directly responsible individuals assigned. The format itself leaves little room for failure or unexpected discoveries. Any result from such a session is perceived as a success. No result, on the other hand, is far from being perceived as acceptable. This is further complicated by budgeting pressures with a tendency to bet safely in order to secure positive end-of-year results. In consequence, the organisation is far away from innovation.

This happens when two opposite approaches are mixed up: exploitation and exploration. The first one benefits from rigid planning and well-defined processes as it’s about following proven paths. This is how profitable organisations usually operate. They optimise effectiveness and predictability in processes, because it directly impacts their profits.

Yet, in order to stay competitive in the market, they should experiment with unfamiliar paths that influence how decisions are made. In exploration, there is much more uncertainty and a higher failure rate, while there is a better chance of earning substantially more than they do today. This mode is mostly followed by startups which are looking for their product-market fit. Learning by doing and making many mistakes works better in this environment than focusing on optimisation.

The problem is that organisations often expect exploration to behave like exploitation. Exploration is turned into a deliverable in the form of a list of ideas, next steps, owners and a deadline. But exploration needs uncertainty and real-world feedback loops to make learning possible. It also needs space for things that don’t work and for ideas that don’t have an obvious use yet.

In 1968, a scientist named Spencer Silver attempted to develop an extra strong adhesive at 3M. By doing so, he created a “low-tack”, pressure-sensitive adhesive instead. For the next 5 years, he tried to find a use case within the organisation with no success. For that reason, his colleagues called him Mr. Persistent. The use case appeared unexpectedly when his colleague Art Fry came up with the idea to use it to anchor his bookmark in his hymn book. Today, yellowish Post-it Notes are used everywhere across the globe.

This story is widely known for the persistence of the adhesive creator and a bit of luck that there was someone around who figured out the purpose of the invention. Yet, it’s worth noticing that the organisation’s structure really helped too. No one stopped him from looking for opportunities outside his core job and the organisation was prepared to push it forward when the chance occurred. When Art Fry found the use case, he could spend 15% of his time making a sellable product out of the invention. It’s easy to imagine what would happen if the rule weren’t rooted in the culture.

The idea came up unexpectedly. Yet, the organisation created the conditions in which the idea could survive long enough for a use case to emerge.

By organisational ambidexterity – exploitation and exploration in balance – organisations can benefit from both. While developing their core products and optimising them, they can also experiment with new directions by doing and failing. It’s important to keep them genuinely separate, though. Processes in an exploitation phase don’t align with those in an exploration phase, and vice versa.

3M’s permitted bootlegging programme and its 15% rule, which encouraged bottom-up projects, inspired Google to introduce its famous 20% rule. During this time, lots of external products were developed, including Google AdSense or Google News.

Besides a contextual model where individuals independently divide their time between operations and innovations, there are also two other approaches which were successfully adopted by major companies.

Xerox created a separate entity dedicated to innovation while keeping the primary organisation focused on its core products. In this way, objectives could be logically separated and individuals could focus entirely on their work. Xerox PARC became a source of many groundbreaking technologies, such as the GUI and the computer mouse. Apple, on the other hand, was particularly good at turning unfamiliar technologies into products people wanted to use. Xerox struggled to turn many of PARC’s innovations into successful commercial products, because upper management didn’t understand their value.

Finally, there is an external innovation model followed by companies such as Microsoft and Meta, which invest in or acquire external companies to stay competitive. Microsoft invested early in OpenAI. Meta acquired Instagram and WhatsApp, which became primary products within its portfolio.

These are different ways of solving the same problem: protecting exploration from the processes designed for exploitation. Whether it happens through individual freedom, separated entities or external acquisitions, the organisation needs to create a path for something novel to become part of its future.

When great ideas emerge unexpectedly, it’s important to have an environment that can turn them into successful products. While market timing or ideas themselves are difficult to predict, organisations can do a lot with their culture to become innovative.

You cannot schedule a valuable idea. You can only make sure your organisation is ready when one appears.