What Is ‘Innovation Theater’? A Definition, and How to Avoid It

Traditional businesses that want a place in the future must meet the trends and technologies that will define it. But that means making meaningful changes, not just shiny, surface-level ones. Too often these innovation initiatives end up as innovation theater.

Innovation theater is any innovation initiative that is done to signal that innovation is happening but that doesn’t have significant business impact. These initiatives are often accompanied by large press releases with little tangible detail.

It’s all too easy for incumbent businesses to talk the cutting-edge talk and showcase innovation pursuits to seem more pioneering. It’s now common to read press releases about AI, automation, and blockchain being woven into corporate processes. All the fanfare, however, fails to yield real change, let alone “disruption.”

Effective corporate innovation goes far beyond laying a trendy, tech-savvy veneer on top of operations. You must decide what long-term innovative initiatives you’ll wager on, carefully choose the right path and purpose, and understand the threats and the opportunities that platforms represent for your niche.

How Attempts at Corporate Innovation Often Fall Flat

Most operational team members don’t want to engage in innovation theather. So how does innovation theater happen?  As Steve Blank recently described in HBR, large companies too often focus on checking all the boxes in their top-down processes rather than improving the results — what they actually make, how they serve customers, and the prescribed means they take to achieve those ends.

This approach focuses on going through the process of “innovation” rather than achieving results. Here at Applico, we’ve observed and documented several reasons why these efforts often come to naught.

One is that corporate innovation tends to start off with a shallow focus, thus yielding only incremental improvements while promising more. Some business units are digitized or streamlined in the process. But the methods are half-measures compared to what groundbreaking disruption needs (and what executive teams often suggest they’re really after).

Another downfall of innovation is the lack of autonomy, which results from the risk aversion that’s deeply baked into the M.O. of many large enterprises. Many companies – after scaling up on repeatable, familiar processes and routines – aren’t ready to put their brand and way of life at risk. So they approach innovation with a tight grip on the reins.

Such was the case with Walmart’s first stab at building a marketplace to compete with Amazon. It handpicked sellers to protect its brand, but did so to the detriment of any growth prospects or potential network effects.

Finally, many companies lack the cultural ethos that top tech entrepreneurs embrace: the need to fail fast and continue iterating towards product/market fit. For big enterprises that are naturally resistant to change, that much experimentation can feel dangerous. Combined with strict oversight, it’s hard to attract the know-how to put real disruption in motion.

These things all amount to a stage play that closes up on opening night. To avoid putting on innovation theatre and achieve the real thing, there’s a better way.

First, it is important to sharpen your focus on the best opportunities to capture. Second, you should understand why the platform business model bears such promise for businesses that commit to it, and peril for those that don’t.

Narrow the Focus

A clear intrinsic advantage of most large businesses is a sizable amount of capital. That makes it very easy to generate activity and try lots of things in the name of innovation. But this can waste money and get you nowhere fast.

On the other hand, when executive teams narrow the focus, they can start to see where the most leverageable opportunities lie and determine the impact of their desired innovation efforts. Following are some of the questions to ask.

  • Which corporate innovation paths make the most sense? It could be a corporate accelerator or internal incubator. It could start by exploring the landscape of ideas and talent inside startup networks. Or it could mean working with a corporate venture studio to stand up some customized, well-oiled venture building machinery.
  • What manual hacks will prove the viability of innovation efforts early on? What can be done in a hands-on manner, quickly and without fancy tech, to validate the idea before you pour lots of money and time into it?
  • What would the measurable outcome of AI, automation, or machine learning (or your favorite buzzword) be? Perhaps none of these trends are worth going after “just because,” but strategically adding one or a few could be accretive.
  • What growth strategy best fits current processes and future directions? Should you build, buy, partner, or invest to fill the gap and gain the edge you’re missing?
  • What should you say NO to? Which of the many options should you ignore from the get-go so you can focus instead on the most promising opportunities?

Answering these will clarify what results are most important, and the most sensible ways to get there.


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