From Stanford social Innovation Review
Every year, hundreds of new innovation books are published with well-meaning and intriguing recommendations for managers and organizations. They tout such innovation success factors as a risk-taking culture, inspired leadership, and openness to outside ideas.
An increasingly impatient social sector sees innovation as the holy grail of progress. This impatience stems in part from the perception that decades of traditional global development efforts are lost years, with billions of dollars spent and too little to show for them. The scale of poverty-related challenges and the growing levels of global inequality drive a sense of urgency and a frustration with old development recipes. These challenges—this crisis, if you will—have legitimized a collective quest for new solutions—innovations!
With the focus on innovation has come a tendency to adopt the language of markets and business, such as social ventures, hybrid business models, and impact investing. But while the innovation language has been adopted, the existing organizational and managerial knowledge base on innovation has remained largely unengaged. Applied studies tend to treat innovation primarily as an outcome and therefore imply that social innovation occurs when desired outcomes such as positive social change can be observed.
Meanwhile, organizations that are the main locus of innovation activities are mostly treated as a black box and we know little about how social innovation develops within these organizations.
Moreover, although much social innovation research has explored the entrepreneurial establishment of new social organizations, much less is known about the ability of already established organizations to innovate continuously. This is an important white space—because significant funds have become available for innovation, but the ability of smaller, younger organizations to absorb large funds is limited.
Generating impact also depends on the ability of organizations to operate and innovate at the scale of the underlying social problems. The capacity of established organizations to keep innovating, therefore, is central to understanding the link between innovation and social progress.
In a recent project with the Rockefeller Foundation,1 we explored what enables organizational capacity for continuous innovation in established social sector organizations that operate at an efficient scale delivering products and services. We undertook a literature review of the mainstream organizational and management literature on this topic, and we were amazed by both the magnitude of this research
stream and the insights we gained.
First, we found that both long-term evidence from studies of social sector organizations and recent empirical evidence challenge the mantra that more innovation is better.
Second, we found that many of the assumptions about innovations in the social sector may be misleading. And third, we discovered that pushing innovation can stifle progress just as much as it can enable it.
No Easy Answers from Innovation Research
Thousands of scholarly and practitioner papers were published on innovation in the last two decades alone. Although our knowledge of many organizational and contextual aspects of innovation has grown tremendously, meta-reviews synthesizing innovation studies consistently lament the fragmented nature of innovation research.
“The most consistent theme found in the organizational innovation literature is that its research results have been inconsistent,” stated one researcher, and it is “low in explanatory power and thus offers little guidance to practitioners.”2 This does not mean that the literature is irrelevant. Rather, it means that we need to question how we use this knowledge to inform practice. Easy recipes in the form of “three steps to better innovation,” often at the core of popular innovation books, are not justified, no matter how tempting they may be or how plausible they may sound.
Innovation is a complex process and depends on the unique constellation of many organizational and external factors in a particular context. Serious engagement with existing organizational theories and knowledge requires that we deal with innovation in all its complexity, and case by case. Likewise, understanding or promoting innovation in organizations should force us to reflect not only on the potential factors that might make innovation work, but also on the many negative organizational and contextual factors that prevent innovation or the realization of its expected outcomes.
From our in-depth review of the literature, we became concerned that widely held assumptions about social innovation are not grounded in established theoretical perspectives and may be misleading. We believe three oversights contribute to a tendency to concurrently overrate and undervalue innovation and to downplay
the difficulties of enabling innovation in social sector organizations.
First, innovation is often perceived as a development shortcut; thus innovation becomes overrated. The tremendous value that is created by incremental improvements of the core, routine activities of social sector organizations gets sidelined. Therefore pushing innovation at the expense of strengthening more routine activities may actually destroy rather than create value.
Second, innovation in social sector organizations often has little external impact to show when it is enacted in unpredictable environments. Even proven innovations often fail when transferred to a different context. Yet the cumulative learning from failures may be tremendously valuable in understanding how a particular context ticks. This potentially builds and strengthens an organization’s capacity for productive innovation over time. In other words, if we evaluate innovation primarily by its outcome in the form of external impact, we may undervalue the positive internal organizational impact that comes from learning from failed innovation.
Third, the hoped-for success factors for innovation that researchers and consultants have identified ignore the power of negative organizational factors, such as bad leadership, dysfunctional teams, and overambitious production goals.
These pathologies can make the implementation of innovations nearly impossible. Consequently, a naive trust in innovation success factors leads to underappreciating the difficulties of making organizations more innovative, and it may generate innovation failures by pushing the wrong factors.