Three Questions that Kill Innovation

A big insurance company I’m familiar with wants to create a radical new future, so it has committed significant resources to large-scale innovation. Unfortunately, the board and executive committee are asking the innovation team all the wrong questions.

Here are three common, yet toxic, questions that are guaranteed to kill innovation:

1. “What is the return on investment?” It’s way too early to know what the ROI will be, so the innovation team will either make up an answer or throw buckets of speculative financial data at the question and hope no one notices that it isn’t answering the question.

2. “Can you prove your case and back it up with hard data?” Ask this question and the innovation team will put all its energy into the wrong areas. The team will try hard to extrapolate numbers from market trends and past experiences, rather than thinking about customers, innovative ideas and new paradigms.

3. “Are you meeting your milestones?” This question forces innovation teams to abandon any controversial ideas they might have and return to what they already know. The team might get something done, but it won’t be innovative.

Fortunately, there are some great alternative questions you can ask to both give you insight into what your innovators are doing and help them thrive:

1. “What hard and soft capabilities are you building?” Innovators create new capabilities as they work. These may be soft: being more comfortable with ambiguity, gathering better customer insights or developing fruitful alliances with business partners. Or they may be hard, technical capabilities, such as developing new technologies around social media. Neither hard nor soft capabilities will yield any immediate financial benefits, but they will later on.

2. ''What value are you creating for stakeholders?" People like to buy products and services from happy employees – especially in service industries. Long before a business case starts to crystallise, asking this question can help you determine whether your project is creating value for your people and your customers.

3. ''What are you learning?" Whenever innovators try something new, they discover what works and what doesn’t. They might not win over a new market segment with their latest invention – but they’ll certainly gain invaluable insights.

(Tony Golsby-Smith is the founder and CEO of 2nd Road, a business design and transformation firm headquartered in Sydney)

© 2011 Harvard Business Publishing