Mining Underground Innovation

It is hard to stop innovators from innovating — as we can see from the long history of skunkworks and unofficial side projects among R&D staff members.1 Consider Tetsuya Mizoguchi, an executive in Toshiba’s mainframe computing division, who was convinced that there was an emerging demand for lightweight, portable PCs at a time when all such devices were large desktop machines. After management rejected the idea, he went underground to develop the first laptop computer — positioning Toshiba as a leader in the new category when it debuted in 1985.2 Laptops now outsell desktops by more than 4 to 1.

In our research at Ford Motor Co., we surveyed employees in R&D and found that from 2018 to 2021, 45% had developed projects without a manager’s consent.3 Workers have a variety of reasons for doing this work out of sight. From earlier research, we know that underground innovators may want to defer discussion until they can present their best case or avoid the pressure that comes from managers demanding results.4 We learned that employees sometimes prefer a shortcut to solving problems encountered at work, don’t want to spend time getting permission, or are simply driven by curiosity and determined to push past constraints — even if they aren’t being paid for the work.

Many R&D managers view underground projects as harmless and potentially beneficial and thus do not object to them as long as employees are meeting their formal responsibilities.5 After all, these innovations are often a good match with the organization’s interests and cost relatively little to develop.

However, if the organization is to take advantage of these activities, the fruits of these projects must surface at some point, as Mizoguchi’s did. Unfortunately, our research shows that this does not happen consistently. Managers need to better understand what different kinds of innovations to look out for and introduce mechanisms that make them more visible.

What Motivates Underground Innovation

Unsanctioned innovation projects fall loosely into three types: missionary, user, or explorer projects. (See “Three Types of Underground Innovator.”) While it’s largely innovators’ motivations that differentiate them, they also may employ different resources and collaborators and involve different levels of effort to disseminate the innovation. Some types tend to remain invisible, as we’ll explain.

Missionary projects are initiated to change a product or company practice. Innovators who engage in missionary projects have the company’s interests in mind, and so they often bring their work forward, but not until they feel that the time is right.6 They may be convinced that their innovation is exactly what the company needs. Employees with missionary projects are highly confident about their judgment and sometimes keep working on a project even when directed to stop — a phenomenon known as creative deviance.7 They may keep their idea secret until they have a convincing prototype and have mustered informal support from colleagues, rather than offering a rough idea early and seeing it get shot down. Others may prefer to work in secrecy until they have a full proof of concept, to ensure that they get full credit for their idea.

R&D workers with missionary projects often involve others along the way. They secure informal help to develop the innovation and to improve the odds of gaining support and ultimately acceptance — much like intrapreneurs and innovation champions whose work is out in the open. They are typically very aware of internal politics and adept at avoiding roadblocks. Some bypass their team leaders and bring ideas directly to senior management. Missionary innovators are always keen on mobilizing allies to create a favorable decision climate. For example, some in our sample at Ford obtained support from the head of their organization’s intellectual property office to create rapid prototypes of an open-source platform as a workaround to potential roadblocks they faced in various work tasks and processes. This innovation (OpenXC) was ultimately adopted across the organization.

Employees in missionary projects are effective bootstrappers. Like all underground innovators, they work during slack time, but they also acquire extra resources from the organization. For example, one individual in our study positioned his project to apply for an internal crowdsourcing challenge in order to obtain extra time and budget to continue working on his innovation — even though the challenge was meant to surface only ideas, not projects in development. Others persuaded colleagues to spend their slack time on their project or consciously planned their prototyping during holiday breaks, when testing facilities were more available. Finally, we frequently encountered projects that were kept on the back burner to await a favorable funding climate.

Given the innovator’s motivation to make an impact on the organization, eventually missionary projects will be communicated — and they consequently have better adoption rates than other kinds of underground innovation.

User projects are developed to solve an individual or work team problem. Many R&D workers see problems and decide to find a way to make a task or process easier, more efficient, or more effective. Their focus is more personal — for example, automating production of a required weekly report or a testing routine. These innovators’ priority is not adoption by others but rather to alleviate their own problems or gain new functionalities for themselves.8

Underground user projects are often developed with the help of others, but only for the sake of prototyping solutions; such projects’ developers are more secretive, and they involve fewer people than are pulled in on missionary projects. User innovators mainly draw on existing slack resources, some of which they carve out of their formal projects by doing a more efficient job.

User projects can be of value to colleagues facing similar problems, but their developers generally lack incentives to reveal and share their work. Some are concerned that broad acceptance by the organization will lead to others “improving” their solution to meet company standards, with the result being that it no longer solves the original problem. Others simply want to avoid the hassle of supporting their colleagues’ use of the tool and being bugged for enhancements. In rare cases, people fear blowback from their managers for spending time on unsanctioned work.

Underground user projects have been observed by other researchers as well. In a telecom business, 31 out of 71 R&D workers were found to have personal pet projects. Most addressed their own work challenges, but only a few were submitted to the company’s suggestion system.9 In a study of police and military workers in Denmark, lack of support for innovation in general even led underground user innovators whose projects had improved their safety at work to keep their solutions hidden.10

We found that when user projects did spread, it was mostly to local colleagues. Adoption happened after chance encounters, such as when colleagues observed the innovation being applied or when the innovator ran into colleagues facing similar problems. This literally happened during coffee or lunch breaks: User innovators were more likely to share their innovation when they heard colleagues complaining about problems that their solution addressed.

Explorer projects emerge from a passion to seek new frontiers. Many R&D workers have a great affinity for and an interest in their field of expertise and keep tinkering to break through current technological constraints or to apply their work to bigger societal problems. Explorer-type R&D workers enjoy innovation as a hobby. They gain fulfillment from learning new skills, demonstrating their expertise, and interacting with like-minded others. We encountered many who considered innovation to be part of their social identity. They wished to be known for their competencies to move technology forward and develop new applications, striving for a reputation as an excellent engineer or inventor. Being deeply passionate, many of them claimed that they would keep working on their projects even if they weren’t paid to. Not surprisingly, they extended their projects into their leisure time: Some had workshops at home or spent their own funds to create prototypes.

Underground explorer projects can be done alone or with enthusiasts in the same field. Collaborators are comrades, some of whom may be quite geographically remote. For example, we observed a team focused on virtual reality applications who were dispersed across the globe, but we also encountered a group of enthusiasts working together locally to develop a luxurious minibus. Underground explorer innovators resemble company employees who are main contributors to open-source software projects, often without the consent of their managers. For this group of contributors, reputation, meeting like-minded others, and enjoyment of the innovation process are well-known motivators.11

Explorer projects can be highly relevant to the innovator’s company. They may result in new patents, processes, or product components. There are also indirect benefits, given that employees with explorer projects may develop new capabilities that extend current technological limits. These R&D employees, we observed, are most up to date with recent developments in their field of interest. They are often also recognized experts within the company, and the knowledge they obtain from underground innovation increases absorptive capacity — the organization’s ability to identify, assimilate, and deploy new knowledge.12 For R&D workers with explorer projects, underground innovation is an important factor in choosing to remain at the company.

When it comes to project dissemination, R&D workers with explorer projects typically make a moderate effort. They take pride in being seen as a good engineer or inventor, so they show their innovations to others inside — and sometimes outside — the company, not to push for implementation as in missionary projects, but to signal that they are capable experts. They do not persist in pushing for acceptance, but rather hope that others will take over.

Because they typically reveal their work to like-minded others but not to managers who might see potential and champion the innovation, their solutions are adopted less frequently than both missionary and user projects. This is because user projects address urgent and specific needs, while explorer projects are often more broadly applicable and spring from a more long-term outlook.

Surfacing Underground Innovations

Underground projects must become visible at some point if organizations are to take full advantage of them. Many companies have an idea management system where employees can suggest ideas that emerge outside of regular R&D and innovation processes.13 However, these systems typically uncover rough concepts rather than fleshed-out innovations. Suggestion systems also assume that employees will proactively submit ideas. We recommend designing and implementing new, more appropriate mechanisms in order to reveal prototypes and solutions that have been developed out of sight.

Employees with missionary projects respond best to a system that focuses on value creation for the whole company and invites the contributions of heroic intrapreneurs or champions — identities that appeal to this type of innovator. They are motivated to come aboveground by the promise of resources for continued development, support from decision makers, and opportunities for career growth. (For example, Mizoguchi went on to become a senior corporate vice president and general manager of Toshiba’s PC business.) Hence, the suggestion system should provide a pathway to resources (time, money, influence), key decision makers, and facilities to continue as a formal R&D project. After submitting a project, R&D workers usually want to remain actively involved as champion or project manager and receive full credit and recognition in the form of career advancement.

Systems that are tailored to missionary projects will most resemble the innovation infrastructure that many multinational companies already have in place. Internal incubators and innovation challenges assume that the organization has proactive workers who are willing to take charge of implementation once their ideas are approved. A prominent difference is that missionary projects are usually further along in their development. When such projects surface, it is important that decision makers are receptive, not punitive, if innovators have already taken their work further than they would have preferred. For example, an internal challenge seeking ideas for new last-mile logistics solutions accepted a missionary project that had already gone far beyond ideation. The workers involved had developed an electric-powered bike that could be folded and stored in a van, for use by businesses that deliver goods in crowded areas.14

Because user projects are more likely to be reported to management when their developers think they have potential value to others, a suggestion system should address pragmatic problem solvers in its communications. Invitations to reveal innovations should ask for personal fixes that are worth sharing — which will help user innovators reflect on the broader applicability of their solutions. User innovators may respond to appeals to altruistically help colleagues, or to save other people from spending time solving the same problem. Offering financial incentives can encourage all types of underground innovators to show their work in the absence of better incentives.

It should be very easy to submit user projects, given that bureaucratic procedures discourage user innovators. Also, because underground projects are generally developed with others, it should be possible to nominate solutions owned by colleagues who may not recognize the broader potential of their innovations. User innovators generally do not want to remain actively involved with diffusion of their ideas. The system should facilitate matchmaking with adopters who will adopt the innovation for personal use or take charge and improve its design so that it can become an official method, tool, or process.

R&D workers with explorer projects will be most responsive to a system that is designed to encourage exploration of new technological frontiers and knowledge sharing for long-term benefit. Because these workers wish to be regarded as highly capable engineers or inventors, it’s important that messaging about and from the system addresses this persona.

For explorer innovators, the main incentive is recognition — which can be realized by giving them awards, incorporating their contributions in best practices, including them in networking events and ceremonies, and featuring them in internal media coverage. We observed that some explorer innovators who revealed their work to the internal patent office regarded a positive evaluation as a form of recognition. They also enjoyed being given a consultative role as an expert in the project’s ongoing development. In the short run, explorer innovations expand the organization’s knowledge base and keep employees motivated, but to be taken forward, others must be involved.

Harvesting Underground Innovation

Whatever approach you take to soliciting underground innovations, it’s important to dedicate resources to evaluating submissions and developing the best ones. Consider the following in establishing your process:

• Label your initiative an innovation marketplace and invite submissions of only prototypes and developed solutions, to distinguish it from company systems meant to capture ideas. It must be about innovations that have been developed beyond rough concepts, as the purpose is detecting and spreading innovations.
• Keep the initial submission process lightweight. Allow underground innovators to begin with just a short description; if the project seems appropriate, the reviewer can engage with the innovator for a full description or prototype. Allow colleagues to nominate others’ underground projects.
• Choose reviewers from different levels and functions (from the shop floor to senior management) so that someone who is close to the problem being solved can be assigned to review the submission.
• Maintain a personal touch. Do not allow an online platform to get the reputation of being the place where submissions go to die. Review submissions promptly, and personally engage with the submitter as soon as possible; this is especially key for user and explorer projects. Listen carefully to innovators’ preferences and expectations.
• Involve experts, potential adopters, and champions in a second-round review. This usually involves decision makers as well, but not exclusively. Reviewers at this stage assess potential value to the company, its R&D portfolio, or some of its workers. They may also give feedback to improve the innovation, or offer help to mobilize resources and do appropriate matchmaking. Especially for user and explorer projects, it is paramount that other people get involved as codevelopers or adopters.
• Determine what additional resources are needed to develop the idea. In many cases, there will be no immediate adoption, only knowledge sharing via internal media or a platform. The submission may also be forwarded to the internal patent office.
• Mobilize a mix of incentives. Beyond resources for continued development and the recognition described above, these may include opportunities to pitch innovations to senior management, financial rewards, or allowances to attend conferences. Active listening during the submission process should reveal what kind of incentives work best for particular underground innovators.

Underground projects by R&D employees are a valuable source of innovation if this work can be made visible — but are missed opportunities for the organization if they are not. Importantly, we found no evidence that employees engaged in underground projects at the expense of their assigned tasks or that the activity was misaligned with their organizations’ strategic priorities.

Missionary projects initiated by heroic intrapreneurs who initially worked under the radar do often come to light, but value created by user or explorer projects is easily overlooked. Capturing it may require new processes and resources as we have detailed here — investments that should pay off not only in tangible benefits associated with particular solutions, but also in a greater ability to absorb new external knowledge, increased employee retention, and a stronger culture of experimentation and personal initiative.