Every organization I get asked to help these days seems to realize that innovation is required on their part to survive and thrive in this age of constant change. Their challenge to me is how to integrate innovation into the thinking and process of every team, and measure the “risk versus reward” of resources expended. They also want to know how they stack up to competitors.

Unfortunately, there are other organizations that still don’t see the need to innovate. Typically, these companies are relishing prior successes, as did Blockbuster and Kodak in their heyday, or are totally risk-averse, as is the case with many mature businesses and government entities. I’m convinced these won’t change until the pain level gets high enough, and that may be too late.

I’ve always recommend a self-assessment of where you and your organization are along the innovation spectrum, and I was pleased to see a realistic proficiency scale in a recent book, “Seeing Around Corners,” by Rita McGrath. She is a longtime professor at Columbia Business School, best-selling author, and is considered by many to be an expert on innovation and growth.

Here is a paraphrased summary of the eight-level scale she offers, with my own insights and experience added, for your consideration in starting your own self-assessment and move up:

1. Extreme bias toward status quo as the right way. The focus at this level, primarily in companies that have a long history of success, usually in very stable markets, is to continue sustaining and exploiting existing advantages. Innovation seems risky and unattractive. I see this often in highly regulated markets, and ones driven by bureaucrats.

2. Desire to improve and innovate exists in islands. At this level, I see sporadic efforts by lower level leaders and small groups to introduce some innovative thinking in an otherwise conservative organization. There may be a lot of talk and activity, some initial workshops, boot camps, and visits to Silicon Valley, but there is no sustained support.

3. Episodic innovative activity from a key sponsor. In these companies, you will see more sustained innovative activity, but little organization-wide recognition of innovation as a discipline. Typically efforts are dependent on a key sponsor and are fragile. A change of key executives, a setback, or a challenge in the core business, and they disappear.

4. Opportunistic innovation driven by senior leaders. While innovative practices are still not a central part of the corporate agenda, they are used to go after ideas for growth that are highlighted by competitors and market evolution. Resources are allocated across multiple business units, but the bulk of the organization still prioritizes the “day job.”

5. Sustained executive sponsorship with funding. Here we see the first early-stage corporate governance of innovation, with funding and processes for innovation as separate activities from business as usual. This requires dedicated resources of both time and money. The result is an emerging proficiency, and recognition of the potential.

6. Maturing proficiency with innovation metrics. At this level, innovation becomes an important part of executive compensation and promotion discussions. Here we see an increased utilization of tools, training, and connections across organizational silos, extending to external sources of ideas. Teams have a set of repeatable best practices.

7. Strategic empowered innovation publicly articulated. At this stage, the CEO and executive team declares that innovation is being integrated into the company’s central defining mission. Innovation becomes a basic part of the company culture, and a critical mass of employees recognize their role in the process, and feel empowered to innovate.

   In many cases, this new focus on innovation has the potential to kill your “cash cow.” The former Blackberry CEO, for example, admits that he hesitated on innovation, and is now struggling to remake Blackberry for survival as an enterprise security software company.

8. Organization cited for “best practices” in innovation. Here corporate commitment of innovation at all levels creates a portfolio of wins, as well as cadres of highly skilled practitioners. The organization is heralded as an example for others, and stakeholders reward the growth potential with a higher valuation and increased investment funding.

In all cases, remember that building innovation proficiency and moving up a level or two is an organizational learning endeavor, and learning does not happen instantly. It takes time and effort, and usually requires a painful reminder that something has changed in the market, jeopardizing the business if action is not taken. Your challenge is to see an inflection point before it is too late.

Marty Zwilling

*** First published on Inc.com on 3/10/2023 ***