Back in 2013, Wired called innovation the most overused word in America, and things haven’t exactly improved since then. On the contrary, the large scale corporate obsession with innovation has only gotten more intense (a quick search on Google Trends proves this).

Of course, there’s a reason for this obsession: as research from Credit Suisse has proven, companies that don’t innovate see their lifespan shrink dramatically. Even Wired had to admit back in 2013 that innovation is not just overused, it is also the most important word in business today.

But how do you get a company to innovate? Where does innovation come from? A recent study by American researchers offers some insight.

Don’t rely on a genius CEO

While we tend to associate innovative companies with charismatic and innovative CEOs like Steve Jobs and Elon Musk, as companies expand in size the executive suite can no longer be the sole source of innovation.

In fact, the study shows that top management on its own has little impact on the ability of companies to innovate. The researchers note: “on average, managers’ ability to innovate is not a major determinant of innovation productivity.”

Then what is?

The researchers suggest that some companies are successful and visionary not because they are led by some “all-knowing, godlike visionary who made great decisions, had great charisma, and led with great authority”, but because of “underlying processes and fundamental dynamics.”

For top management, this reframes the innovation challenge from a creative one (“how do I innovate this company?”) to a management challenge (“how do I make this company more innovative?”).

The path to innovation then, is to change the culture and the dynamics of the company so that it becomes more innovative. And you can achieve that by creating processes that allow innovation to happen.

Putting the ‘management’ back in innovation management

All this should be reassuring to managers at well-run, stable companies. While stability and process are sometimes depicted as the enemy of innovation, they ensure that innovation efforts are sustainable and lead to the creation of revenue.

This observation about the importance of process and change management also matches our own experience. Specifically, we see that successful innovation programs owe a lot to a solid and common sense alignment between business functions.

I would highlight the following areas where companies need to make particularly sure that the business functions are aligned:

  1. The first is the link between innovation and budgeting. Financial planning must be aligned with innovation initiatives to guarantee that the projects can be properly incorporated into the budget. We often see companies who have set up great innovation programs that engage and excite their workforce, but fall flat because there’s no budget dedicated to pursuing the promising ideas.
  2. The second is that innovation should be part of people’s objectives. That means HR should cooperate with innovation teams and management to align reward schemes and performance review processes with employee innovation goals. This sends a signal to the entire company that everyone is responsible for making innovation happen.
  3. Lastly, make room for creativity in the planning. Companies should give people the space and time to innovate. You can’t expect your team to innovate on top of a full (or more than full) workload. Constant busy work kills creativity.

And finally, maybe skip this year’s hackathon

After reading this, maybe you might rethink the plan to organize a hackathon this year.

Hackathons are often great fun, and one-off innovation bursts can work. But innovation initiatives which aren’t rooted in the culture need to be rebooted constantly. It can even backfire when employees get cynical about the show of innovation at the company (and after that, back to business as usual).

Meanwhile, it soaks up valuable resources, and without the necessary processes in place to pursue the ideas, results will most probably be disappointing.

Conclusion

To create a sustainable innovation engine, organizations must first focus on putting in place the processes that allow innovation to happen. Only when the necessary processes are in place does it make sense to start thinking about hackathons and other idea generation initiatives.