In the information age, innovation is king. We see disruptions coming up even faster than 10 years ago, and more and more industries get soaked into this suction of renewal. Take, for example, the automotive industry, where 10 years ago we were smiling at weirdos such as Tesla, not to mention these funny Chinese copycats. These times are over: Tesla built 1.3m cars in 2022, and the market share even in car-country Germany rose above 3% in Q1.2023, more than car giant Toyota. This was not because Teslas are just better, it was because they build driving entertainment systems rather than chairs on wheels. On top of this, with their fresh thinking and low-cost production methods, the Chinese manufacturers will change the international automotive market again, and sustainably. This is disruption at work, and this effect will catch one industry after the other.

As a consequence, companies need to get on the market with new products quicker, need to be able to change characteristics flexibly and match customer needs more precisely. Innovation management is becoming more and more important. And yet, especially established companies – even with a track record of innovating in the past – find it more and more difficult to manage innovation effectively. 

And – as this is an article series on female leadership – there is a special emphasis on what role female leadership plays in innovation management. “Emotional intelligence is important for giving people the psychological safety that they can experiment”, says Annemie Ress in a podcast. She has been advising companies for more than 10 years on innovation and change management. Annemie and the author share some hints on successful innovation management – particularly for established and larger corporations. Sometimes this feels like making the elephant dance.

1. Embrace disruption and face your fears

Disruption will be an inevitable element of many industries. The typical psychological reactions to this are known: first, you deny the threat, then you get into emotions that stem from fear: anger, bargaining and depression/despair. “Fear of the unknown, fear of change”, Annemie adds. Finally you accept it and act. The moment when fear kicks in is the one that is decisive here whether you fall back into old habits, and rely on your successful past, or if you switch the gear to get ready and embrace the disruption. Embracing in this case means, to fully get aware that a disruption might destroy your business model. This creates the energy that you need to question all your paradigms, come up with entirely new ideas, and actually counter the disruption with your own innovation. To acknowledge your own weakness, is actually a strength. Build up and embrace this capability, because it is the basis for success.

2. Become your customer Number One: your biggest friend and harshest critic

There are many things in large corporations that make it hard to innovate. However, there is one good news: you can afford to become your own first customer, even a good one. Make sure that you deploy your own innovation as close to the core of your company as possible, and that you use your customer experience intensively in quantifying the market and improving your product. This way, you can become a good friend by not letting your teams down, but relentlessly supporting them on the way of making the products really good. And you should be your harshest critic: even more so relentlessly pointing out the weak spots, but also the strengths, and making proposals how to improve the product.

3. What customers want vs what customers need

From the introduction of the iPhone in 2007 we learned a very important lesson: sometimes it’s not about what the customers want, but what they need. In this case, nobody asked Steve Jobs to create a universal device that can do phone calls, messaging, and Internet browsing. However, he assumed the needs of many customers to combine the so-far distributed functions from different devices into a single one. This way, Apple created a completely new product category called the smartphone. 

This is the kind of disruption that we will see in many industries. Consequently,  whenever possible try to detect not what the customers want, but what they need and where you can really solve an urgent pain point or strong desire. Rather than to start with asking the customers for their current wishes, think first about what the disruptive technology could be that the customers are really eager to buy. Once you have the first prototype, you can get it out for testing with customers, and from then on customer feedback is crucial.

Besides the customer’s wishes bias, there is also a confirmation bias regarding existing products. This bias means that people believe what they’ve done in the past is what they should do in the future as well. That might be right for many instances and cases, but when it comes to disruption this is a thinking trap. It’s good to ask someone in your team to identify these kinds of biases and spell them out honestly, so that the team can revisit their thinking and adapt.

4. Fail fast and learn rigorously

It is usually better to try out some bold ideas, create a first prototype of them, and rigorously kill the ones that don’t fly. For this, the company needs to have a good error and learning culture. This simply means to regard the error as the most beautiful option to learn. Hence, as it is important to make some errors, enough to learn about the disruption, the potential in your customer needs, and the best way to address them. Create some nice rituals around learnings: organize “fuck-up” parties, share the learnings in webinars, create wikis, and in any case, regard it as a positive and valuable contribution to the company.

5. Put a little fence around innovation

Innovation can be seen as a small plant. It needs water, sunlight, fresh air, and other things. At the same time, corporate cultures are more like deserts: they usually serve a single type of plant – in this case succulents – but are quite an hazardous environment for any other kind of plants. “Put a little fence around it and allow it to grow”, Annemie recommends, so that they can experiment in an atmosphere of psychological safety. This can be a special team set up with more freedom and a more loose reporting line.

6. Link innovation to the core business – create skin in the game

However, if you put them completely outside of your ecosystem, that might have a detrimental effect as well. It might be seen as a competitor that the company will simply attack. To avoid such allergic reactions, it is important to always keep a strong link to the established organization. Ways to doing that are, for example, the following:

• rotating people in and out on a temporary basis,
• making some opinion leaders of the established organization sponsors of the new teams,
• creating dual leadership models with people from the new and the established organization,
• preparing bilateral contracts between the two worlds that specify what kind of services will be provided from one to the other

This way, there is enough independence for the innovation team, but at the same time, the established organization can also contribute to the innovative products.

7. Build change upon existing culture (not desired new)

Sometimes new innovation teams try to copy lots of organizational features from innovation leaders in their industry. For example, “in my organization I copied the idea of Google to give every employee the freedom to use 20% of the time for their own pet project”, says Marcus. However, “this failed miserably; the reason was very simple: if you just take one element of a culture and plug it into a completely different culture, it will be eaten by breakfast”, he adds. 

What is important, though, is not to try to mimic or copy cultural elements from different innovative companies, but build your own innovation culture on top of the existing culture. That might sound easier said than done. However, the existing culture has one hidden valuable asset: its resilience to dysfunctional situations. Every large organization has some dysfunctions, and despite this, they still work well. The question is, what is happening in the organizational culture that compensates for the malfunctioning of the existing organization and processes. This is a force that you can use for building innovation as well. To take an example, “I’ve seen a company where the leadership team was not doing a good job of providing guidance and strategic decision making. Still, the company performed well. What was happening is that on the operational level the informal discussion groups were meeting at the coffee machines and discussing how to best move on, without having a strong clear strategic guidance. This means, the organization has a huge untapped potential of operational decision makers that de facto were creating a strategy”, Marcus shares.

Find out what this hidden asset is and build upon it.

8. Live the change visibly. Bury old habits visibly. Repeat. 

If you want to infuse a certain change to organizational culture, there are a lot of things that are required, but likely the most important one is role modeling. So if you want your employees to become more entrepreneurial, you as a leader need to be more entrepreneurial. Only once you have shown different behaviors, you can expect that others will mimic your actions. Then it is important to set up empowerment structures, budgets, projects portfolios, and so on. 

Role modeling always means doing something clearly different than before, and doing it visibly for every employee. The mistake that is often done is to collect the leadership team into a closed room, spend a multi-day workshop on – say – a new strategy, and then come out and just share the contents. The potential in your action was the way of how the strategy would come together, not that there is a strategy at the end. Hence it is important to be much more transparent, than in the past, live the change visibly and also be clear what old habits you have buried.

9. Is it time for an internal disruption?

Many companies believe that you can create disruptive products on the basis of non-disruptive, organizational structures. And sometimes, seldomly, this can actually work. But oftentimes you need to think bigger, i.e., need to change the structures of the organization as well. Just a few ideas to think about:

• Creating teams across different functions,
• Empowering teams by giving them a ring fenced innovation area, where nobody from outside can intervene
• Establishing clear contracts between the old and the new worlds that are much more market oriented,
• Introducing two-week sprints, where you design your products in an iterative way
• Establishing decision and coordination teams that are composed of people from the operational level rather than managers
• Rethinking managers‘ roles, as being the best moderators and coaches in the organization, and making managers with great expertise experts that counsel the teams.

What does this all have to do with female leaders? For all the above, there is one very important element consistently visible: the human factor. Coming up with new ideas, having the courage to question the existing paradigms, reaching out to people that you didn’t often work with in the past, this all requires an atmosphere of openness, flat structures, and emotional intelligence. These are all the qualifications that oftentimes females female leaders bring to life when they are part of leadership teams. Annemie observed that “most female leaders have more of an openness for failing”

Hence, in all of the above, it is wise to make sure a high amount of female and other diverse leaders are in the teams. At the same time, the team composition, as such, is not sufficient. It is also important to manage the different diverse backgrounds actively in all design, decision making, planning and implementation processes so that the full potential of diversity can come to life. This is how you can make the elephant dance.