Innovation vs Transformation

- a 2 minute read

Innovation vs Transformation

Many large enterprises are struggling to reconcile social, economic and technological disruption. Disruptive businesses dominate entire sectors before the incumbents even know what’s happening. As a response to this new world, they create “innovation labs” and “transformation units”.

In many businesses I’ve known, they whisper “Innovation” and “Transformation” in the same breath. My experience is that, many business conflate the two in problematic ways.

What I find, is that businesses see transformation units as a necessary evil. It’s a way of dealing with corporate inertia or siloed thinking. Rather than call it ‘transformation’ it should be a process practice. Every business needs a process practice, in the same way it needs an accountant or a lawyer.

In contrast, businesses love the idea of an ‘innovation lab’. It sounds cool, and will produce the third leg to prop-up a struggling enterprise. Senior people justify the expense and risk of running such a project by citing such abstract benefits as:

  • “Cutting through the bureaucracy”
  • “Exploring new ways of working”
  • “Creating valuable new businesses”

If a business needs to “cut through bureaucracy” or “explore new ways of working” an innovation lab is unlikely to help. If it does help, then that lab is going to be more concerned with ways of working than “creating valuable businesses”.

I’ve seen enterprises pour millions into innovation labs without success. Mainly because they’re failing to address their fundamental issues. Or, they create labs that operate so far outside the realms of the business, they may as well be separate entities anyway.

Most innovation labs will not produce new unicorn businesses. Often because they’re focussed on helping transform the parent enterprise. Most will fail to produce anything at all. In many cases, innovation labs fail to innovate and fail to transform the business.

If a business has a successful process practice, they won’t need an innovation lab for long. They won’t need an arms-length body that operates outside the norm, because innovation will be the norm.