In today’s fast-paced, hyper-competitive business environment, innovation is no longer a luxury; it’s a necessity. The future of your organization, team, and even your role hinges on developing novel business models and value propositions. It is a critical determinant of long-term success; to overlook it is to risk obsolescence. But how can you identify if your organization is genuinely committed to fostering innovation? Two pivotal questions serve as a litmus test.

The Empowerment Quotient: Are You Free to Explore, Experiment, and Fail?

The first and foremost question is: Are you empowered to explore, experiment, and fail? The innovation cycle isn’t linear but iterative, fraught with obstacles, detours, and, yes, failures. It’s about venturing into the unknown, necessitating a culture that tolerates and embraces failure as a stepping stone toward success.

The Anatomy of Failure in Innovation

Contrary to popular belief, failure in innovation isn’t indicative of incompetence or inefficacy. Instead, it’s an essential component of the learning process, a crucible in which hypotheses are tested, models are refined, and insights are gleaned. If your organization’s culture stigmatizes failure, it effectively suffocates innovation. Employees won’t venture beyond their comfort zones or tackle ambitious projects, fearing repercussions for unsuccessful attempts.

The Portfolio Approach to Innovation

Alex Osterwalder, a well-known thought leader in the innovation space, underscores the importance of adopting a portfolio approach to innovation. In this paradigm, you start with many project teams, each devoted to investigating new business models and value propositions. Over time, the focus narrows as projects lacking sufficient viability evidence are gradually retired. This allows for the reallocation of resources to more promising avenues.

The key takeaway is this: If a team doesn’t gather enough evidence to support further investment, it isn’t disbanded or deemed a failure. Instead, the team is encouraged to redirect its creativity toward new ideas.

Cultural Imperatives

So, how do you take stock? If your organization lacks a cultural ethos that makes room for exploration, experimentation, and constructive failure, it’s fair to say that innovation isn’t a priority. Such a culture is not about paying lip service to innovation but integrating it into the very DNA of the organization.

The Legal Navigator: Is There a Dedicated Expert?

The second question to probe is somewhat unconventional but equally revealing: Do you have a legal person dedicated to innovation? The answer can offer significant insights into your organization’s commitment to innovation.

The Old Guard: Legal as a Barrier

In the infancy of corporate innovation, the legal and compliance departments were often considered hindrances, not enablers. They were seen as the gatekeepers whose primary function was to say ‘no’ to anything that seemed risky or uncharted. The rationale was straightforward: Their roles were designed to minimize organizational risk, and innovation is, by its nature, fraught with uncertainties.

The Paradigm Shift: Legal as a Partner

Fast forward to today, and the dynamics have radically changed. Innovation is now recognized as a distinct professional discipline akin to accountancy, engineering, etc. This professionalization necessitates the integration of legal experts into the innovation ecosystem.

Legal and compliance teams aren’t merely the organizational watchdogs tasked with flagging and averting risks. They are strategic partners who work hand-in-glove with innovation units to chart new business territories responsibly. Their roles are twofold: To ensure that the organization stays within the confines of laws and regulations while enabling the safe pursuit of groundbreaking opportunities.

The 1,000-Person Rule

For organizations with a headcount exceeding 1,000, having a legal professional 100% committed to innovation is indispensable. If your organization doesn’t meet this criterion, it is likely not prioritizing innovation as it should.

Concluding Thoughts

To recap, assessing your organization’s commitment to innovation involves addressing two essential questions: Are you empowered to explore, experiment, and fail? And do you have a legal person wholly dedicated to innovation? If the answer to either of these questions is ‘no,’ it may be time for a strategic reevaluation.

Innovation isn’t an ad-hoc activity or a one-off project; it’s a long-term strategic commitment permeating all an organisation’s layers. To succeed in this ever-changing world, it’s imperative to integrate innovation into your core business strategies, foster an environment conducive to creative experimentation, and build collaborative partnerships across departments, including legal.

In doing so, you will unlock unparalleled growth opportunities and future-proof your organization, making it agile, resilient, and innovative.

This article from Strategzer inspired this article. 

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By Andrew Constable MBA, LSSBB

Keywords: Business Strategy, Innovation, Leadership