Wharton@Work

December 2020 | 

Innovating in a Crisis: Lessons for 2021 and Beyond

Innovating in a Crisis: Lessons for 2021 and Beyond

Sudden disruptions can have their advantages. Faced with the possibility of catastrophic loss, many leaders and their organizations have exhibited remarkable resiliency and resourcefulness as they cope with the pandemic. In fact, 2020 has seen a wave of innovation efforts across industries, driving growth, productivity, and, notably, the quest for a vaccine.

But with the emergence of a “new normal,” as is expected in 2021, will agile, less risk-averse innovation practices continue? Or will organizations revert to their old innovation-stifling ways? As explored in Wharton@Work last month, making positive change stick requires deliberate effort. Processes developed on the fly must be codified and shared. Decades of research and entrepreneurial experience by Wharton professors Christian Terwiesch and Karl Ulrich show that organizations with innovation prowess have already done this: Instead of waiting for a stroke of genius, they put in place processes that guide them in continuously generating, evaluating, and developing great ideas.

Terwiesch, co-director with Ulrich of Mastering Innovation: Strategy, Process, and Tools, a five-day live virtual program, says many firms had to overcome an innovation crisis of sorts during the pandemic. As the need arose for quick, transformative change, the methods they relied on either became considerably more difficult or couldn’t work at all. Those include a dependence on resident innovators’ “a-ha” moments (rarities even in the best of times) and on large, often off-site, brainstorming sessions that generate a profusion of out-of-the-box ideas of questionable quality (“There’s a reason they’re called ‘out-of-the-box,’” quips Terwiesch).

To supplant these less-than-ideal methods, Terwiesch and Ulrich developed a comprehensive process for igniting and maintaining innovation within any organization. They are now sharing it online in Mastering Innovation, putting participants squarely in the middle of that process. It begins with two sessions held before the cohort meets in the classroom in which they engage in a virtual “Innovation Tournament,” exploring their workplace challenges and submitting ideas for innovative solutions in small groups.

Ulrich says the tournament serves two purposes: It is “a tool that participants will learn and can begin using right away in their workplace. But it also represents a microcosm of the innovation process within an organization. By immersing them in an Innovation Tournament, we recreate that process and then use the experience for the basis of discussions. It tees up the key challenges they will face in managing innovation in real companies.”

Innovation Tournaments are the subject of a book by Terwiesch and Ulrich, and they have been teaching them to executives and MBA students for more than 10 years. “They help to generate more and better ideas, improve evaluation mechanisms, and get more variants in the process,” says Terwiesch. “The latter is a common trap, and the hardest to pull off. Many firms limit or even eliminate too much diversity because they want to control the process. We are anchored to what we know and what we’ve done before, and like to fire in the same direction.”

Leading Innovation

A theme of the program is the role of the “innovation manager,” who leads the process rather than contributing to it. “It’s not the leaders’ job to have great ideas,” says Terwiesch. “It is their job to provide an architecture for innovation. Managers who are charged with sourcing and developing their firm’s next groundbreaking innovation, no matter their industry, face many of the same hurdles. They struggle to gather more and better ideas — ideally ones that go beyond what the firm has considered before — and to more effectively evaluate those ideas to ensure that the best ones receive the attention and resources needed to succeed.”

Successful innovation leaders involve people who have not previously been involved, or who were deliberately excluded. Innovation Tournaments that led to groundbreaking advances in health care delivery, for example, solicited ideas from nurses and frontline caregivers instead of those with more power in their organizations. The program includes specific classroom exercises that can be replicated by participants in the workplace to both expand participation and elicit more creative ideas from the same people.

Leaders are also charged with identifying a competitive direction for the firm’s innovation efforts — one that will guide them in anticipating or meeting the needs of the marketplace. In terms of technology, Terwiesch says it’s important to note the distinction between companies like Amazon and Uber, who used the internet and mobile technology to disrupt and overtake entire industries, and WebMD and Coursera, which haven’t put physicians or universities out of business. “In Mastering Innovation, participants will learn to understand the competitive dynamics of factors such as technologies, enabling them to identify future competitive threats as well as to generate internal opportunities for growth,” Terwiesch says.

Terwiesch adds, “Ultimately, the success of the program is determined by how you change your work when you get back. It’s not about lectures or case studies. It’s about actively creating experiences that closely mimic the problems you face at work. The distinction between theory and practice gets blown away.”