Approaches to innovation are becoming more sophisticated and deliberate. It is no longer a ‘once a year’ whiteboard brainstorming activity with lots of post-it notes; rather, organisations that innovate successfully are more calculated and scientific with the strategies they deploy and the methods and capabilities they use. Against this backdrop, the ability to include diversity of thought to innovation-related problems will help to set leading organisations apart.

In order to canvas a range of views on this emerging area, Peter Corbett and Simon Pelletier, Directors in Deloitte Consulting spoke with 3 thought leaders: Fiona Tschaut, Program Manager and Innovation Curator from the Michael Crouch Centre for Innovation (MCIC) at the University of New South Wales (UNSW); Alex Morris a Leader at Monitor, Deloitte’s Innovation Think Tank – Doblin and Juliet Bourke, Diversity and Inclusion Leader at Deloitte Australia. This article addresses four ideas that emerged from these interviews:

  1. Create a shared definition
  2. Define the innovation context
  3. Integrate diversity of thinking into innovation theory
  4. Infuse diversity of thinking into innovation practice.

 

  1. Creating a shared definition of innovation and diversity of thinking

In order to move diversity and its role in innovation forward, it is important to create shared definitions of innovation as well as diversity of thinking. Doblin, a global thought leader on innovation theory for 30 years and a part of Monitor Deloitte, defines innovation in this way:

“The creation of new, either to the market or the world, viable value for customers and or the enterprise through a business offering, ideally going beyond products to platforms, business models and customer experiences. The act of innovation (innovating) requires organisations to identify the problems that matter and move through them to deliver elegant solutions.”(“Ten Types of Innovation”, Keeley, Pikkel, Quinn, Walters)

Juliet Bourke says that a shared definition of diversity of thinking is much harder to pin down. Indeed one of the reasons she recently published “Which two heads are better than one?” is because she found that:

“(W)hile many might agree at an intellectual level that diversity of thinking enhances group performance, very few can put their finger on why it works or how to achieve it with any degree of specificity. Indeed few can even agree on what creates diversity of thinking – is it a maverick in a group? Is it people from minorities? Is it, as touted by books and films about the Enigma codebreakers of Bletchley Park, the coming together of team members from different educational disciplines or backgrounds?”[i]

Juliet now defines diversity of thinking in two ways:

  1. Diversity of perspective – how people perceive or see an issue. Understanding what drives diversity of perspective helps to ensure that the way a situation or problem is defined is broad – that, collectively, the group sees the full picture.
  2. Diversity of approach – the mental frameworks people use to solve problems once they have been defined.

Putting these together – innovation and diversity of thinking – a helpful definition is:

“Deriving value from people’s different perspectives and problem solving approaches by facilitating participation in identifying innovation problems and solution development.”

  1. The innovation context

Innovation methodologies have advanced in last 30 years, moving from less structured methods to more deliberate and scientific approaches. Innovations can be built up systematically. Doing so increases your odds of success exponentially. Setting an intention around innovation efforts helps answer the question “what to innovate?” This intent falls in one of three archetypes:

  1. Sustaining (incremental changes to existing products or inroads into new markets)
  2. Adjacent (leveraging something the organisation does well into a new space) or
  3. Breakthrough innovations (creating new offers or new businesses to serve markets and customer needs that may not yet exist).

At Doblin, research and experience indicates that successful innovators balance their intent with 10% effort on breakthrough, 20% on adjacent and 70% on core innovation. Seventy percent of the long-term returns on innovation investment come from transformational bets.

Achieving this balance and level of return comes with many challenges – one of which is bringing diversity of thinking into each archetype.

  1. Integrating diversity of thinking into innovation theory

Sustaining innovation is focused on making incremental changes to existing products or incremental inroads in new markets – think new methods of product delivery, engagement models or better design. To sustain innovation, organisations tend to adopt an ‘innovate in the core’ model, creating a separate internal innovation function: a ‘continuous improvement’ team performed in an innovation ‘lab’ or ‘garage’. This function usually attracts high performing people who are seconded to other teams to help solve a challenge or opportunity.

This model is generally challenging from a diversity of thinking perspective. “Clearly where there are significant recruitment biases and lack of breadth in the source of team members you will likely see weaker diversity in thinking” says Bourke, further “where the environment has attracted a single profile of employee you can find that the working environment is not conducive to an inclusive ideation process.”

Adjacent innovation leverages something the company does well into a new product category, business model or market. When developing adjacent innovations organisations adopt ecosystem approaches (“incubators” or “accelerators”) in their innovation function by partnering with developers and the start-up community to identify and launch new ideas. In this model, the organisation provides access to its existing capabilities (e.g. mentors, infrastructure, and capital) and looks to leverage a hybrid team to drive innovation value.

These models can be exciting and generate great energy around an innovation opportunity but they have challenges. Re-integration of the new business into the existing business to achieve scale is the single biggest challenge for this model of innovation closely followed by the ability to find and mobilise a balanced set of capability. For example, there are instances in Australian organisations where a more diverse and inclusive innovation environment, in which internal functions were able to effectively contribute, would have gone a long way to preventing future reintegration issues.

Breakthrough or transformational innovation creates new offers or businesses to serve markets and customer needs that may not exist. Whilst this is the ‘nirvana’ objective of all innovation efforts, there is an increasing prevalence of external or venture capital style innovation models designed to meet this challenge. This involves establishing a venture capital or investment fund that identifies potential investment or acquisition start-ups. Some recent examples include Westpac’s ReInventureii and CBA’s recent acquisition of Take Your Money Anywhere (TYME)iii, both investments have been positioned by bank executives as part of a focus on building their innovation capability.

Investing in a business that is a potential threat to an organisation’s market is not new; what is new is that organisations are increasingly looking to combine or harvest intellectual property or capability from their acquisitions to combine or enhance their own innovation efforts. This approach is challenging from a diversity perspective as investment decisions are usually the domain of a select few which impacts the diversity of prospective investments and consequently the breadth of thinking that is brought to the table.

  1. Infusing diversity of thinking and inclusion into innovation practices

Alex Morris and Fiona Tschaut offer two perspectives on how diversity of thinking is being infused into innovation practices. Alex Morris a leader in the Doblin practice in Toronto typically works with corporations looking to improve their return on innovation investment. Alex says: “Diversity of thought in innovation is best structured around the ‘Balanced Breakthrough’ model with perspectives of Desirability (input from customer), Viability (the business model) and Feasibility (engineers, technologists, operations) represented”. Being conscious of the biases of individuals and teams involved in the innovation process on these three lenses alone leads to better innovation outcomes. Morris says “this basic structure ensures innovation efforts don’t just end up being a solution looking for a problem or a neat design which can’t be built”.

This model can then be applied to the innovation capability organisations are drawing on. Morris continues “increasingly we are seeing organisations look at their designer to engineer ratio or identify people who are able to represent more than one area of the Balanced Breakthrough model”. For example, in a 2015 report Silicon Valley Venture Capital firm KPCBiv (Kleiner, Perkins, Culfield & Byer) titled “Design in Tech”, the author John Maeda notes, from a survey of Silicon Valley early stage start-ups, that the designer to engineer ratio has improved dramatically in recent years from 1:30 to 1:4, signifying a greater awareness of the role of diversity of thought in new business.

Inclusion also plays a role in the innovation efforts Alex has been involved in “we are often working with organisations to be more inclusive in their innovation approaches by involving the right perspectives at the right time to get the best innovation outcomes”. He cites an example of a major bank which re-engineered its mortgage product innovation process to involve customer test groups during concept design, build and launch to bolster desirability assumptions prior to in market testing and launch.

An alternative or complementary approach to structured innovation is to take a design-driven or passive approach to diversity of thinking and inclusion. This approach looks at potential obstacles to and solves them through the innovation program design. This approach is being used at MCIC at UNSW. The MCIC is a non-faculty aligned innovation program with state of the art facilities, mentoring and support services for student innovators. Fiona Tschaut, Program Manager says “part of our remit in fostering innovation at the university is about ensuring diverse contribution from the whole of the student population… this means not only students from across disciplines, but also different interest groups”.

“Given our program is purely voluntary, we needed to design elements of the platform to deliberately enable the broadest possible population of contributors”. Metrics are at the core. For the MCIC the preliminary metrics specifically relate to the size and breadth of the innovation community. Through the program build they developed characteristics designed to drive diversity of participants. Elements like access hours; they now open 10am-10pm with aspirations to go 24/7 and engagement programs; ‘Wearable Fashion-hacks’ and ‘Waffle Wednesdays’ are run to provide a safe, first point of engagement for potential participants from less obvious student cohorts.

Fiona says that “leadership and the introduction of structure to this community needs to be carefully considered in order to avoid introducing bias”, she observes “a consistently structured approach or even consistently explicit design challenges can make the centre less appealing for some groups”. To address this she references ‘invisible facilitation’ techniques that the team deploy to engage the community. These include more subtle factors like curating the environment and the activities to drive desired outcomes. “For some groups we change the titles of the books that are presented on the shelves around the working areas to stimulate thinking in certain directions.”

Conclusion

Innovation is leaving the experimental lab. It is no longer an empty brainstorming agenda; rather it is a program of work performed deliberately, reliably and repeatedly. Contemporaneously, diversity of thinking, biases and inclusion are emerging as a new area of disciplined exploration. Combining innovation and diversity of thinking seems like a natural pairing; however the two worlds are only recently being connected.

Starting with clear definitions, this article has provided ideas about areas of integration. Building on innovation theory, this article provides nascent examples of how diversity of thinking is being infused into innovation practice – both in the corporate environment and in the classroom. Going forward, our prediction is that one of the major differentiators in innovation will be organisations’ ability to bring diversity and inclusion into the innovation agenda.

In the next instalment on D&I in Innovation we will continue to explore how diversity and inclusion is being measured and offer up a checklist for D&I in innovation in your organisation

For more information, contact:

Peter Corbett (pcorbett@deloitte.com.au) or Simon Pelletier (sipelletier@deloitte.com.au)

i Bourke, J., (2016) Which two heads are better than one?  How diverse teams create breakthrough ideas and make smarter decisions, AICD, px.

ii http://reinventure.com.au/westpac/

iii http://www.afr.com/business/banking-and-finance/financial-services/tyme-on-commonwealth-banks-side-as-it-expands-global-reach-20150211-13c19h

iv http://www.kpcb.com/blog/design-in-tech-report-2015