Debunking Innovation Myths: Avoid Overrated Innovation Methods and Create Real Value

In this insightful post, we explore how popular innovation methods can hurt your innovation efforts. You will discover six underrated innovation methods that can help you succeed and four overrated ones with questionable value.

We interview industry expert Magnus Penker of Innovation360 about choosing the right innovation methods and closing the ever-increasing innovation readiness gap. Read on to learn more about the tools and methods that can help with that. A VIEW OF INNOVATION METHODS – 6 UNDERRATED AND 4 OVERRATED

In a world that feels like a volatile cocktail of war, financial instability, global climate collapse and persistent poverty, it’s clear that the challenges we face are far from solved. Despite urgent initiatives like Scientific-Based Targets and global commitments to the 17 UN Sustainable Development Goals, many organizations continue to fall short.

Innovation Methods

A fair number of these organizations that fall short do so simply due to a lack of aspiration. About 19 % of the organizations in the InnoSurvey® database (populated with more than 10,000 organizations in 105 countries) simply do not have high aspirations for innovation. Those organizations will inevitably, maybe not this year or next but eventually, die. But more than 80% of the organizations do have high aspirations for innovation. Why is it then so that the gap between ’wanting to innovate’ and ‘succeeding with innovation’ grows yearly (BCG 2024)?  I’d argue that one of the explanations is that we’re succumbing to myths. Myths about silver bullets which promise to solve all your needs with a blanket innovation method, prioritizing trendy methods over science-based practices and continuously changing the methods by each issue of HBR. The problem with this ‘tug of war’ ad nauseum is that it hurts innovation output. From my point of view, working side-by-side with a lot of the world’s largest organizations, I see this every day. “Do you have a template for how to drive radical innovation in the manufacturing industry?” is unfortunately a more common phrase than I’d want to credit Homo sapiens (wise human) for. And so is thinking that the executives have the answers to ‘the next big thing’. The truth in my experience is that innovation – this critical concept that stand between your organization’s long-term survival and its sliding into oblivion –  requires critical thinking and an inclusive collaborative environment that are sharing a goal and are motivated to reach it together.

The 2024 Nobel Prize in Economic Sciences, awarded to Daron Acemoglu, Simon Johnson, and James Robinson, highlights how inclusive institutions foster innovation and long-term prosperity. Their research shows that countries with inclusive political and economic systems create environments where innovation thrives, driving sustainable growth. In contrast, extractive institutions that concentrate power stifle innovation and lead to stagnation. Their work underscores the importance of institutional reforms to foster innovation and reduce global inequality. Just as countries with inclusive institutions thrive, organizations must start with organizational context a key element of the, embrace inclusivity, root-cause thinking, and defining what value creation means for all stakeholders to drive long-term success. These elements are also guiding elements in the new ISO 56001 document (Innovation360 predicts more than 250,000 certified organizations by 2030: read here) However, despite the clear advantages of inclusivity, many organizations struggle to put these principles into practice, and the gap between innovation aspirations and readiness continues to grow.

This disconnect is evident in BCG’s June 2024 report, which revealed that while 83% of executives are prioritizing innovation, only 3% feel their organizations are truly ‘ready.’ Alarmingly, this readiness has dropped from 20% just two years ago, highlighting a growing challenge: it’s not enough to want to innovate – creating the right environment for it is where most organizations fall short.

Figure 1. BCG Innovation Readiness Gap

A June 2024 report from Boston Consulting Group suggests that while organizations place ever higher priority on innovation they are increasingly ‘unready’ to deliver innovation.

This suggests two important questions:

  • What can leaders do to improve readiness if you oversee your organization’s innovation results?
  • Is systematic, inclusive innovation just wishful thinking or an attainable goal?

To better shape the answers, I recently sat down with Magnus Penker, thought leader and CEO of Innovation360 to discuss his perspectives. Innovation360 is one of the world’s leading innovation management consulting firms. Underpinning our discussion was the recent 2024 Gartner Hype Cycle report for Innovation Activities.

Gartner is a highly regarded institution in which many executives seek inspiration in forming their innovation process. The Gartner Hype Cycle report discusses over 30 innovation methods at various “maturities” in their hype cycle. With that as base, we discuss 12 prominent innovation methods and I asked Magnus for his perspectives.  Below you’ll find his view on whether they are “Overrated,” “Underrated,” or “Misunderstood,” and why.

I found the insights from this discussion eye-opening and hope that a clearer guidance to these commonly used methos can prove valuable in assisting organizations to become better-functioning innovation vehicles.  Figure 2 summarizes these ratings below.

Figure 2. Summary of Innovation Methods and their respective ‘rating’

Overrated Innovation Methods

Hackathons

“Honestly, it’s more cost-effective to bring in a comedian,” says Magnus, as he critiques the widespread use of hackathons. Although popular, these events often lack long-term impact, resulting in ideas that remain in limbo without practical implementation. “The problem,” Magnus argues, “is that people come into hackathons without real context, and then they leave the hackathon and forget they participated, and no one is accountable for the results.” Innovation work must be tied to the strategy and real, impactful problems for which the organization is relevant. Hackathons, with their typical 1-3-day format, are more of a theater to entertain people than to verify the problem and generate validated solutions. To drive sustainable, balanced innovation, you need to include innovation method non-linear ideation. This allows changes to the original problem to be solved, typically conducted over a longer time frame, at least a few weeks, and clustering of many ideas to find suitable ones to begin experimenting on.

Sharktank-Style Competitions

Penker’s view on these popular TV-style competitions is blunt. “They’re more beneficial for the sharks than for anyone else. It’s entertaining, but as a serious innovation tool, it’s meaningless.” The reason why it doesn’t work? Magnus claims it is because “no one simply knows (…like the sharks are supposed) that much to be able to predict the future”.

Chief Innovation Officer (CIO)

While the CIO role is gaining prominence, Magnus believes most companies approach it the wrong way. “Too many CIOs are more like ambassadors than actual drivers of innovation,” he argues. The high turnover in these roles reflects that most CIOs lack real authority, resources, or teams to lead meaningful change.

Idea Management Tools

When Innovation360 started, it experimented and subscribed to several leading idea management tools and quickly found them lacking. According to Magnus, these tools often become “black holes” where ideas go to die, similar to the old-school idea box, which leads to demotivation rather than innovation. “No one is looking in the box,” he explains, “and even in the odd chance someone has ‘the great idea’ which rarely happens, they wouldn’t be willing to give it away for free.” You need a process tool to guide you from discovery to commercialization.
Our ideation tool, Ideation360, has now through many iterations evolved into Transformation 360, a holistic Innovation Management Platform which we believe will provide a fundamental puzzle piece for enterprise innovation (read more about it here).
However, Transformation360 is no different, Magnus says, in that it will not survive as a standalone tool. “If a client calls me and asks to subscribe to Transformation360 without a plan, process or a system that it fits into, I simply won’t sell. I won’t sell it because I know it won’t work and I do care for my clients and their success. Ultimately, I know it’s bad business for us to sell things that won’t work in the harsh reality.”

Underrated Innovation Methods

Virtual Innovation Labs

Magnus sees enormous potential in virtual innovation labs as an innovation method but warns against if simply setting up the environment as enough. “Without structure and a clear process, these labs won’t lead to real innovation,” he cautions. Magnus compares this to companies’ mistakes during the agile movement, where freedom without structure led to chaos. “Clarity is the key,” he emphasizes. “You need to set clear goals and give people the freedom and coaching to achieve the goals. This is the same process the famous filmmaker Ingmar Bergman would structure his creative process around.”

Prototyping

Magnus is particularly fond of Prototyping when it is part of a system, an end-end process.  “When tied to hypotheses and used within a systematic framework of using the prototypes to inform your hypotheses, it can be extremely valuable, cost-effective and motivating,” he explains. However, isolated from a structured process, it is as ineffective as any other standalone tool.

LEGO® Serious Play

LEGO® Serious Play is a favorite at Innovation360. LEGO® can help teams think more creatively and foster collaboration. Magnus stresses that when used in the right context it really has a purpose —such as a hands-on way of prototyping to unleash creativity — or even in board meetings to facilitate decision-making!

Scenario Planning

According to Magnus, scenario planning is an essential innovation method for exploring future opportunities. “Executives often feel they should have all the answers,” he notes, “but the reality is that scenario planning helps organizations identify key challenges and opportunities, setting the stage for more radical innovation”.

The key here is to bucket challenges in the known and the unknown, and furthermore in high vs low impact. Where there are ‘known impactful’ challenges, these should be launched immediately within the relevant business unit. (You can read more about scenario planning here: https://innovation360.com/take-control-of-the-future-using-scenario-analysis/)

“Stop the debating and just get to it. If you realize a few weeks down the road that it was the wrong avenue, then have feedback loops to stop it. This will be much more effective than the typical 6-month debate whether to go or not go”.

And as for challenges in the ‘unknown’, Magnus argues, organizations should only consider challenges that are ‘highly impactful’. “Exploring the unknown with small problems simply doesn’t make sense. They should be nasty, high-impact problems, and when you combine that with simultaneously exploring known impactful problems, you will risk-mitigate and always reap the benefits of today’s business and stay one step ahead of the S-curve over your competitors.

Open Innovation

While open innovation is often hailed as the future, Magnus highlights the critical need for an IP strategy. “IP is a significant barrier,” he says, “and without a clear strategy, open innovation can become a liability rather than a strength.”

Misunderstood Innovation Methods

Design Thinking

Penker agrees that design thinking can be powerful, but only when applied to situations with something tangible—an “artifact”—to work with.“If you’re operating in highly uncertain environments where you don’t yet know what you’re aiming for, design thinking can actually stifle creativity,” he warns.

Design thinking is useful in Horizon 1-2 (from the Innovation Horizon framework by Bahghai & Coley), but ‘by design’ is impossible when you are working with radical Horizon 3 innovation.

Lean Startup

Magnus sees Lean Startup as a promising method but just like design thinking it works best when working with Horizon 1-2.  Furthermore, he explains that Its success hinges on context and how it’s applied. It can be invaluable when paired with a structured process and hypothesis-driven exploration. However, deploying Lean Startup without a larger system often leads to underwhelming results.

Minimum Viable Innovation System (MVIS) – (Both Underrated and Misunderstood)

Magnus contends that the concept of MVIS is highly interesting. Innovation 360 has typically referred to it as “pockets” or “fractal designs” within an organization that can replicate innovative processes from a small to large scale. He stresses that many organizations fail to understand the full potential of this idea, focusing too much on launching large-scale solutions when smaller, replicable systems can often drive innovation more effectively.

Across all these innovation methods, Penker stresses one essential truth: innovation activity must be part of a larger process tied to a clear vision.

“Without a structured process and a clear vision, these activities are like free radicals floating in the universe,” he concludes. While many of these innovation methods have merit, the key is how they fit within the broader system. Too often, organizations adopt innovative methods in a semi-panic environment, hoping they will solve all their problems. But when used thoughtfully and systematically like puzzle pieces into a cohesive picture, most of these techniques can have a time and place to drive real innovation. This is also the main purpose behind our latest book: ‘Innovation by Design: Innovation Management Systems for Global Impact, which I co-authored with Gerry Purcell.”