March 2017 | 

Need More Innovation? Rely on Process, not Creative Genius

Need More Innovation

For most organizations, innovation is treated as a mysterious, highly creative process — with the emphasis on creative. The pervasive myth says you need at least one genius to come up with a groundbreaking idea (or three). That leads to spending money trying to hire out-the-box thinkers, identify them internally, or bring in innovation consultants, and then hoping for the best. More often than not, those hopes are never realized.

Instead, say Wharton professors Christian Terwiesch and Karl Ulrich, organizations with strong, reliable innovation cultures focus internally on process. Terwiesch, co-director of Wharton’s Mack Institute for Innovation Management, says you can drive sustained innovation using structured methods. “We developed a process that you can start using immediately, and teach to others in your organization. Once you have it in place, everyone who has a great idea can move it forward. That process will in turn lead to your developing a more innovative culture.”

In the new five-day program Mastering Innovation: From Idea to Value Creation, held on Wharton’s San Francisco campus, participants learn what Ulrich calls an “architecture for innovation.” Ulrich, who is vice dean of entrepreneurship and innovation at Wharton, explains, “We look at it on two levels. The first is on the level of the individual problem solver. How do you generate ideas and encourage creativity? The second is an organization-wide view. We look at the challenges in developing a system in which a collection of ideas can be identified, developed, and commercialized.”

The two levels come together in an Innovation Tournament. Developed by Terwiesch and Ulrich, the tournament is launched online before the program begins, with participants pitching and crowdsourcing ideas with one another. Terwiesch explains, “When we meet in San Francisco on Sunday, we are ready to roll. Participants have already ‘met’ and begun working together. We narrow down their ideas and build teams around them. Then, we work on commercializing those ideas as far as possible in five days.”

With the emphasis on active learning, Mastering Innovation is more workshop than classroom-based experience. “It’s not about lectures or case studies,” says Terwiesch. “We closely mimic the challenges you face at work, bringing them into the classroom so the distinction between theory and practice dissolves. Our focus is on helping innovation leaders launch and manage a process that helps them execute on great ideas, unique insights, and new solutions.”

For the participants, those challenges — and opportunities — can come from a need for either internal or external innovation. Ulrich explains, “Instead of meeting a need that arises in the outside world, such as a gap in customer experiences, internal innovation meets internal challenges, such as better manufacturing processes or more efficient service. Although they’re often thought of as vastly different, the approaches to internal and external innovation are almost identical, and you can use the same process to meet both.”

While innovation remains risky — any new endeavor brings with it a degree of uncertainty — managing the process well can mitigate some of that risk. Ulrich says a key tool in the program, “lean innovation,” actively addresses innovation investment. “You don't have to put up millions of dollars in an opportunity in order to reveal a lot of information about the likelihood that it will actually deliver value.” During Mastering Innovation, he and Terwiesch help participants run low-cost experiments to help them make better decisions about which opportunities to pursue and which to terminate.

Ultimately, he says, the success of the program lies in how well participants are able to change the way their organizations innovate. “You don’t need to be the next Elon Musk. Most organizations need to focus on and get the most out of their current business, their current customers, and their immediately adjacent business opportunities.” At Wharton, that means instead of hoping for a creative spark of genius, depend on a process.