Why Most Companies Fail to Create an Innovation Mindset
Why Most Companies Fail to Create an Innovation Mindset

Through his extensive research and practice, Jeremie Brecheisen, Senior Managing Consultant at Gallup, has discovered what works when it comes to creating an innovation mindset – and what doesn’t.

In an interview with MERIT, Jeremie shared some troubling facts about agility and innovation today. Dysfunctional management and misguided culture change are stifling companies’ potential to innovate. Below, Jeremie explains why attempts to become more innovative often fail, and what strategies are proven in practice to make a difference.


You can hear Jeremie and other leading experts at the MERIT Annual Summit in Seville on 5- 6 February 2020.


Why do you think managerial practices are broken, and how should they change?

We know the practice of management is broken because, after 20 years of focusing on employee engagement, the numbers haven’t budged. The world’s engagement is not changing despite the billions of dollars spent on culture.

We know the practice of management is broken because world GDP per capita has been dropping for the last 50 years regardless of political leadership. Leadership success in growing companies has mainly come from M&A (Mergers and Acquisitions) and not actual organic growth. The number of companies on the New York Stock Exchange has been cut in half in the last twenty years. Managers are failing to inspire new ideas, stronger performance, and real growth.

The reason the practice of management is broken is because organisations’ philosophy of management is broken. The top two ways of becoming manager, according to Gallup research, include being a high performer in an individual contributor role (the best salesperson becomes the sales manager) and tenure in the role/company. In both cases, promotions are rewards, where the high performer deserves the opportunity, or the tenured professional deserves to have their turn at the top.

However, Gallup’s research shows that while 1 in 10 people have the talent to manage, only 18% of managers currently have high manager talent. We choose the wrong people because our philosophy of why someone should become a manager is all wrong. Management is a responsibility, not a reward. The best players don’t always make the best coaches. Long tenure may be due to their excellence as an individual contributor and means very little about being a great manager.


What is the number one mistake you see companies make on the way to becoming more innovative?

They start in the wrong place and underinvest in the right place. They always start with structure and systems. They always underinvest in mindset and managers. Poor mindsets and bad managers will squander your great structures and systems, while great mindsets will bust through systems and structures that get in the way of agility.


Are some kinds of organisational structures more effective than others, or does organisational structure really not matter?

Gallup looked at how employees in Europe and the USA felt about their company’s mindset and its systems to respond quickly to business needs. Traditional structures, matrixed structures, and even partly-matrixed structures showed little difference in shaping how employees felt about their organisation. On the other hand, things like inter-departmental collaboration and speed of decision making were much more predictive of people feeling like their company’s mindset and systems were agile enough to respond quickly to the market. Another thing that differentiated the scores was how often their manager gave them meaningful feedback. Daily feedback was the most effective, followed by weekly, with the worst being yearly or less.

So, does that mean structure doesn’t matter? Not necessarily. Agile structures have been proven by many studies to drive a number of critical outcomes. It does mean that structure alone will not fix poor mindsets or broken systems. Reorganising the company around agile principles by itself will not create an agile culture. There are many cultures which are extremely agile and their structures are quite traditional. Now, structure plus the right mindset and the right systems will likely matter quite a bit more.


If you could dispel one misconception about agility and innovation mindset, what would it be?

The missed opportunity. What do I mean by that?

Someone with a more hopeful bias could see the agile transformation opportunity as a way to get rid of a broken practice, and go from bad managers to agile teams.

They might have read Gallup's research and found the vast majority of managers are not good at their jobs, the practice of management has been in a deadly holding pattern for the last 20 years, very few of them even have the talent or potential to be great, and that leaders are not any better.

Maybe we should be applauding approaches to break the pattern.

When it comes to agility transformation, rather than underinvesting in mindset and managers, they could be aggressive about getting rid of a system that's not working and not changing. Disrupt everything you can about this manager role which is blocking great performance and putting people's well-being at risk.

The agile disruption:

1. Manager selection. Don't select managers: put people in charge of choosing their own managers, but double down by giving them tools to do it with objectivity.

2. Development. A few managers are developing their teams according to our findings and so put teams in charge of their own development, but to double down, give them the resources and training to do it.

3. Performance Management. There are more bosses than coaches, so double down by getting rid of bosses who will never become coaches and hire agile coaches from the start.


To get more hard-hitting, fact-based advice from Jeremie, you can hear his talk at the MERIT Annual Summit in Seville on 5-6 February 2020.