The Hierarchy of Needs for Corporate Innovation

Most of us are familiar with Maslow’s Hierarchy of Needs. The theory on psychological health is now almost 70 years purpose rather than just profit, in stark contrast to prior generations, a testament to having already met their other needs.

Maslow’s Hierarchy of Needs

One could draw parallels between this hierarchy and the hierarchy of needs when it comes to innovation within a large company.

Let’s dig a little deeper into what I’ll dub the Hierarchy of Needs for Corporate Innovation.

APPEARANCE:

Typically, organistions and senior executives tend to first respond to the obvious need to innovate (but the lack of vision or guidance) by calling town hall meetings and making bold proclomations of their employees to “go forth and innovate”. Unfortunately, little is done to build an environment where people can actually do this.

Examples:

• Senior executives visit Silicon Valley
• The word “innovation” litters annual reports and corporate publications but isn’t embeded into any genuine strategies
• Keynotes are delivered on innovation by external speakers
• Senior executives call for the workforce to “be bold and innovate” without creating an environment to support these behaviours

AWARENESS:

This step is all about improving executive and employee awareness and planting seeds for a mindset and cultural shift across the organisation. Helping people understand whythe organisation needs to innovate and what innovation actually is.

Examples:

• Idea contests and hackathons that tend to focus more on engaging employees and showing them a different approach to business and product development (as opposed to tangible revenue generating outcomes)

CAPABILITY:

This is when organisations actually invests in building a capability to actually deliver tangible, revenue-generating outcomes.

Examples:

• Training employees in innovation theory and methodologies such as human-centred design, the lean startup and agile (GE has trained over 5,000 employees in the lean startup)
• Systems, resources, values and processes are created or re-designed to support innovation behaviours and the culture that underpins it
• Idea contest and hackathons with a focus on outcomes (such as problem, solution and business model validation), not just inputs, are performed
• Innovation outposts and incubators are established

DEFEND:

The organisation focuses on defending its existing turf through a mix of incremental Horizon 1 innovation and to a lesser extent, adjacent Horizon 2 innovation (the latter teeters between defensive and growth attributes). Stretch the existing S-curve as far as it’ll go.

This might also involve investment in and acquisitions of startups and emerging technologies.

Examples:

• Improving the performance of existing products and services
• Netflix protecting its turf by creating its own TV shows and feature films
• UberEATS applying its technology to the delivery of food

GROW:

The elusive pinnacle. The organisation successfully discovers and commercialises disruptive Horizon 3 innovation and builds entirely new markets or replaces existing ones, fostering the development of a defensible next S curve rather than simply stretching the existing one.

Organisations that get this right can re-invent their entire business models.

Examples:

• Amazon reinventing itself from just an online bookstore to digital media consumption and being the number one cloud infrastructure provider.
• Apple developing the iPad and creating an entirely new market

Each stage serves a purpose of some sort — what’s important is that we don’t confuse level 1 inputs with the ability to create level 5 outputs.

In many ways, given that cultural transformation is no easy feat, progressing through the different stages from acceptance onwards makes a lot of sense, so long as that progression is done with senior executive buy-in, budget and a genuine commitment to embrace ambiguity and learn along the way.

Where is your organisation in the hierarchy? Is it in appearance pretending to be in growth or is it genuinely making an effort to build a culture, environment and capability to explore and deliver adjacent and disruptive innovation?