37. Expected Value - Chapter 14

In this episode we explore chapter fourteen from metrics to mindsets. Thus far in the story we have seen that the numbers look great. XV across the portfolio was strong. Strategic fit profiles were improving, kill decisions were happening faster, reallocations were smooth. On paper, Freya's innovation system was working exactly as designed. And yet something felt off. 

In this episode we explore what happens when an innovation system starts to become a performance, when confidence scores are given without doing the work, when learning is claimed without reflection, and when people walk through the beautiful structure you've built like it's a museum, admiring it but not living it.

 We'll follow Freya and Axel as they shift the focus from metrics to mindsets, recentering everything on real challenges that matter, using AI as a cultural sense-making tool, identifying cultural lead users who already embody the behaviors you want, and rewiring rituals so the organization celebrates realized value, not just innovation activity. 

If you've ever felt your dashboards look great, but your innovation culture is quietly drifting, this chapter is for you. It is about turning your system back into a tool, restoring truth over theatre, and closing the gap between expected and realized value.

Transcript

SPEAKER_02: 0:00

What's a birth?

SPEAKER_00: 0:01

Uh uh uh uh What's a Barthin U Welcome to the next chapter of Expected Value Today we explore chapter fourteen from metrics to mindsets Thus far in the story we have seen that the numbers look great. XV across the portfolio was strong. Strategic fit profiles were improving, kill decisions were happening faster, reallocations were smooth. On paper, Freya's innovation system was working exactly as designed. And yet something felt off. In this episode we explore what happens when an innovation system starts to become a performance, when confidence scores are given without doing the work, when learning is claimed without reflection, and when people walk through the beautiful structure you've built like it's a museum, admiring it but not living it. We'll follow Freya and Axel as they shift the focus from metrics to mindsets, recentering everything on real challenges that matter, using AI as a cultural sense-making tool, identifying cultural lead users who already embody the behaviors you want, and rewiring rituals so the organization celebrates realized value, not just innovation activity. If you've ever felt your dashboards look great, but your innovation culture is quietly drifting, this chapter is for you. It is about turning your system back into a tool, restoring truth over theatre, and closing the gap between expected and realized value. The numbers were good, and that's what made it so frustrating. The X V portfolio was balanced, the strategic fit profiles were improving, kill velocity was up, reallocations were happening smoothly, confidence deltas were being tracked and discussed. By every signal Freya had worked so hard to build, the system was humming. But something felt off. It started as a whisper, a meeting where no one challenged a bad idea, a showcase where credit didn't land on the people who did the real work, a slide that claimed learning from a project that had been quietly buried without a single review. Then a message from Axel. Think we're drifting a bit. Can we talk? They met that evening on the rooftop of the building, a little known spot with a view over the river. Axel brought two cans of sparkling water and a stack of sticky notes. I'm not saying the system's broken, he said. It's not. But something's happening underneath it. Freya didn't say anything, just looked out at the water. It's like we built this incredible structure, he continued, and now people are walking through it like a museum, admiring it, referring to it, but not living it. Freya sighed. I saw someone last week give a project a 0.8 confidence score, she said. And when I asked why it wasn't higher, they said because we haven't done the research yet. But then they didn't do the research. Axel looked at her. The number became the thing. She nodded. Not the thinking behind it, just the score. That night Freya wrote one sentence at the top of her notebook. When a system becomes a performance, it stops being a tool. She stared at it for a while, then added another line. We don't need more data. We need more truth. This wasn't merely an implementation issue. The technical infrastructure of expected value, strategic fit, governance, and learning loops they'd so carefully constructed was sound. The problem was deeper. The human element that breathed life into these frameworks was showing signs of erosion.

SPEAKER_03: 4:30

Challenge-driven mindsets, the missing core.

SPEAKER_00: 4:36

As Freya reflected on what was happening, she realized the drift wasn't just about metrics, it was about purpose. The challenge-driven approach that had been so central to their innovation philosophy from the beginning was slowly being reduced to a box ticking exercise rather than a genuine focus on solving important problems. We started by focusing on challenges that mattered, she told Axel, but somehow that's slipping into the background. The challenges have become abstract references rather than genuine drivers. This insight led them to what they called a challenge recentering effort, a deliberate initiative to reconnect every aspect of the innovation system to the core business challenges they were trying to solve. Before we even look at metrics or processes, Freya explained to her team, we need to bring the challenges back to the center of our conversations. Every discussion should start with what problem are we solving and why does it matter? This recentering took several forms. Challenge visibility transformed how initiatives were discussed and reviewed. Rather than starting with solution descriptions or progress metrics, every discussion began with a clear articulation of the challenge being addressed and its importance to the business. Challenge ownership shifted responsibility from innovation teams to challenge sponsors, business leaders who owned the problems being solved. This created natural accountability for ensuring innovations actually addressed real business needs rather than becoming self-contained projects. Challenge evolution acknowledged that understanding of problems often develops as solutions are explored. Teams were encouraged to regularly revisit and refine their challenge definitions based on what they were learning, rather than treating them as fixed starting points. The metrics and processes are important, Freya told the governance board, but they only have meaning when they're in service of solving challenges that matter. We need to make the challenges visceral again, not abstract. This refocusing created a more authentic relationship with the innovation system. When teams reconnected with the core problems they were trying to solve, the metrics became meaningful again, not as performances to be managed, but as signals about progress toward addressing important challenges. When people are genuinely motivated by the challenges, Axel observed, they use the system because it helps them solve those challenges, not because they're required to follow a process. This approach directly built upon the challenge-driven innovation principles they'd established early in their journey. It wasn't about introducing something new, but about reigniting the fundamental purpose that had made their system powerful in the first place.

SPEAKER_03: 7:34

The cultural immune system.

SPEAKER_00: 8:17

Another. We're asking for stretch ideas but rewarding safe ones. And then Lucy, quietly. We still present, we don't reflect. Freya wrote everything down, not to track it, just to see it. What they were describing wasn't resistance to the innovation performance system itself. It was something more subtle, a kind of cultural immune response to change, even positive change. The organization's existing patterns of behavior were quietly reasserting themselves, not through direct opposition, but through subtle reinterpretation of the new approaches. This wasn't surprising. Cultural systems are self-protecting and self-perpetuating. They absorb new elements by translating them into familiar patterns, often in ways that neutralize their transformative potential. Freya recognized that they had built the technical infrastructure of innovation performance, the frameworks, metrics, and processes, but hadn't fully addressed the cultural infrastructure that would sustain it. And without that cultural foundation, even the best system would gradually be hollowed out from within, becoming form without substance. This phenomenon paralleled what they'd observed when first introducing the expected value system. The initial resistance hadn't come from disagreement with the core concepts, but from the organization's natural tendency to transform new ideas into familiar patterns. Just as they'd seen with the measurement systems in earlier stages, the cultural dimension required its own deliberate strategy.

SPEAKER_03: 9:58

The lead user approach to cultural change.

SPEAKER_00: 10:04

As Freya pondered how to address the cultural drift, she realized that the same lead user approach they had applied to innovation could be valuable for cultural change as well. Rather than trying to transform the entire organization's mindset at once, she could identify and support the cultural lead users, individuals who naturally embodied the values and behaviors she was trying to foster. Every organization has people who already operate with the mindsets we're trying to build, she explained to Axel. They might not use our terminology or frameworks, but they naturally think in terms of evidence-based confidence, learning value, and honest assessment. Working with the HR team, Freya developed a cultural lead user network, specifically focused on identifying and connecting these individuals across the organization. The approach included several key elements. Pattern recognition identified employees who consistently demonstrated the desired behaviors, speaking candidly about uncertainty, designing deliberate learning experiments, making evidence-based decisions, and sharing insights generously with others. Peer learning exchanges brought these cultural lead users together to share their approaches and perspectives. Rather than formal training, these were facilitated conversations where natural practices could be articulated and shared. Story capture documented specific examples of how these individuals approach situations differently. These stories weren't presented as heroic narratives, but as practical illustrations of alternative mindsets in action. Informal influence mapping identified the social and professional networks these individuals influenced, creating visibility into how their approaches might naturally spread through the organization. We're not trying to create cultural change from the top down, Freya told the Governance Board. We're trying to identify where the culture we want already exists and help it spread naturally. This approach transformed how the organization thought about cultural change, not as something imposed by leadership, but as something cultivated from existing seeds within the organization. It created authentic models of the desired mindsets that others could learn from and adapt to their own contexts. The most powerful cultural influences aren't official programs or statements, Axel observed. They're the everyday example set by respected colleagues who naturally operate in ways others find valuable. This method directly applied the lead user innovation theory they'd incorporated into their confidence assessment framework. Just as they'd learned to identify lead users who encountered future needs earlier and more intensely than the mainstream market, they now sought out cultural lead users who naturally practiced the mindsets that would eventually need to become mainstream within the organization.

SPEAKER_03: 13:14

The mindset mirror.

SPEAKER_00: 13:18

They called it the mindset mirror. For two weeks they suspended every portfolio update, no XV reviews, no fit scoring, no reallocation meetings. Instead, they ran reflection circles, anonymous surveys, fireside chats, one-on-ones. They invited people who'd never felt included before, asked leaders to describe in their own words what innovation meant to them, what they feared, what they believed was rewarded. Patterns emerged. The first was what Axel called the certainty reflex. Despite all the language about confidence levels and learning, people still felt immense pressure to be right, to have the answer rather than to find it. This pressure wasn't coming from Freya or the innovation system itself, it was coming from deep organizational conditioning that equated leadership with certainty and questions with weakness. The second pattern was the attribution gap. Innovation successes were celebrated, but rarely in ways that accurately recognized how they happened, the pivots, the failures, the unexpected insights that actually shaped the outcome. This created a distorted picture of innovation as a linear, predictable process rather than the messy, iterative journey it really was. The third pattern was the invisible reward system. While the formal innovation metrics valued learning and adaptation, the informal rewards promotion, recognition, status still flowed primarily to those associated with visible successes regardless of process quality. This created a disconnect between what was measured and what was truly valued. These patterns weren't unique to Freya's organization, they were expressions of deeper cultural assumptions about value, success, and performance that exist in most established companies, and they couldn't be addressed through more metrics or clearer processes, they required a fundamental shift in mindset. These cultural patterns directly impacted the organization's ability to move from expected to realize value, as discussed in their earlier work. When teams felt pressure to project certainty rather than acknowledge reality, implementation barriers were hidden until they became crises. When attribution was distorted, the wrong lessons were learned and repeated. And when the invisible reward system contradicted formal metrics, people optimized for advancement rather than outcome. The supply chain optimization project provided a stark example. On paper, it had shown steady confidence growth and strong strategic fit. But the mindset mirror revealed that team members had been reluctant to raise concerns about integration challenges, fearing they would be seen as not team players. The result was a last minute implementation crisis that could have been avoided through earlier, honest assessment.

SPEAKER_03: 16:38

AI as a cultural sense making tool.

SPEAKER_00: 16:44

As Freya worked to understand the cultural dynamics affecting the innovation system, she recognized an opportunity to leverage artificial intelligence as a sense-making tool, a way to identify subtle patterns in organizational behavior that might be invisible to even the most attentive human observer. AI can help us see the unwritten rules that shape how people actually engage with our system, she explained to Axel. It can identify patterns in language, behavior, and decision making that reveal the real cultural dynamics at play. Working with the technology team, they developed several AI-powered cultural intelligence approaches. Communication pattern analysis examined how innovation was discussed across different contexts, formal presentations, informal conversations, internal messaging platforms, and documentation. It revealed subtle but significant shifts in language that indicated how the system was being translated and sometimes transformed as it moved through the organization. Decision pattern recognition identified how actual decisions diverged from the formal processes, showing where unofficial practices were creating parallel systems alongside the official one. It detected, for instance, that many teams were running unofficial pre-reviews before formal governance sessions, effectively creating a shadow approval process. Social network mapping tracked how innovation conversations and decisions flowed through the organization, identifying informal influencers and gatekeepers who shaped how the system was interpreted and applied, regardless of their formal roles. Cultural contradiction detection highlighted disconnects between stated values and actual practices, such as when learning from failure was publicly celebrated, but teams that experienced setbacks saw subtle but real reputational damage. This approach transformed how Freya thought about cultural interventions. Rather than trying to push new mindsets from the top down, she could identify where specific cultural patterns were creating friction with the innovation system and address those specific dynamics. The most effective cultural change isn't generic, Axel observed. It's precisely targeted at the actual patterns that are shaping behavior, not the ones we assume are there. This cultural application of AI represented a natural evolution from their earlier uses of artificial intelligence in the expected value system. While they had previously used AI to enhance confidence calibration, pattern recognition, and portfolio optimization, this new application focused on the human layer that made those technical tools effective. The team established clear ethical boundaries for this work. All analysis was conducted on aggregated, anonymized data with full transparency about what was being examined and why. They committed to using these insights only for creating more effective cultural support. Never for individual evaluation or as part of performance reviews. This ethical stance was critical for maintaining trust and ensuring the AI served as a genuine learning tool rather than a surveillance mechanism. From truth telling to truth seeking language mattered. Fail fast sounded flippant. Learn out loud resonated. Recognition mattered. Innovation awards were all going to final launches. Nothing for learnings, pivots, or great experiments that died with insight. Time mattered. Innovation felt squeezed. There was never room to think. Freya didn't fix it overnight, but she did something more powerful. She named it. She created a short internal memo called Innovation Isn't a Process. Just five paragraphs, no numbers. It said we built a system to help us choose better. But innovation doesn't live in a dashboard. It lives in the courage to be wrong and the clarity to say so. It lives in shared language, shared belief, and shared ownership. We can measure what matters, but only if what matters still gets spoken. They shared it internally, not as a mandate, as a marker. Something shifted. The memo wasn't about implementation or frameworks or metrics. It was about the human side of innovation, the courage required to confront uncertainty honestly, the vulnerability needed to share incomplete understanding, the discipline to follow evidence rather than preference. It acknowledged that behind every number, every assessment, every decision was a person trying to navigate complex trade-offs with limited information. That the technical system of innovation performance rested on a foundation of human judgment and human communication. Most importantly, it signaled a shift from truth telling to truth seeking, from having the right answers to asking the right questions, from performing innovation to practicing it. This subtle reframing created space for a different kind of conversation, one where uncertainty wasn't a weakness to be hidden, but a reality to be explored, where learning didn't need to be packaged as success to be valuable, where the quality of thinking mattered as much as the outcome it produced. Not everyone embraced this shift immediately. Some leaders, particularly those who had risen through demonstrated certainty and quick answers, found the emphasis on questions and exploration uncomfortable. Freya worked with these leaders individually, acknowledging their discomfort while helping them see how this approach ultimately led to better outcomes, even if it felt less definitive in the moment. The procurement team's experience with their automation initiative provided a powerful example of this transformation. When early testing revealed unexpected complexity, the team initially tried to downplay the issues, fearing their project would be killed. But in the new environment of truth seeking, they instead shared their concerns openly. Rather than punishment, they received additional support, expertise, and a revised timeline. The result was a stronger solution that actually delivered more value than originally projected, precisely because the early challenges had been addressed honestly rather than hidden.

SPEAKER_03: 23:46

Open innovation culture, embracing external perspectives.

SPEAKER_00: 23:53

As Freya worked to reshape the organization's innovation mindset, she recognized that insularity was part of the problem. The same cultural patterns that affected how people engage with the innovation system also limited their openness to external perspectives and solutions. Cultural change isn't just about how we think internally, she explained to the governance board. It's also about how permeable our boundaries are to outside thinking and approaches. Working with external partners, Freya developed what she called open mindset initiatives, deliberate efforts to expose the organization to different ways of thinking, about innovation, evidence, and value, these included. Cross-industry learning exchanges brought together teams from different organizations and sectors facing similar challenges. Rather than simply sharing solutions, these exchanges focused on sharing thought processes, decision approaches, and evidence standards. Innovation immersion experiences embedded team members in organizations with fundamentally different innovation cultures, from startups to scientific research labs to artistic collectives. These weren't just observation visits, but active participation experiences designed to create perspective shifts. External challenge networks connected teams with diverse external experts who could provide alternative perspectives on their work. Unlike traditional advisory boards, these networks were deliberately composed to challenge dominant thinking patterns rather than reinforce them. Distributed problem solving communities engaged external solvers not just in finding solutions, but in reframing problems and approaches. These communities brought fresh perspectives to how challenges were understood and addressed, not just to specific technical solutions. Open innovation isn't just about finding external solutions, Freya told her team. It's about opening our thinking to fundamentally different approaches and perspectives. This openness to external viewpoints created a powerful counterbalance to the organization's natural tendency toward cultural insulation. It provided constant exposure to alternative ways of thinking that challenged established patterns and prevented the innovation system from becoming a self-referential echo chamber. Some of the most valuable cultural influences come from outside our industry entirely, Axel observed. They help us see our own assumptions and patterns that have become so familiar we no longer notice them. This cultural dimension of open innovation built directly upon their previous work with open talent and inaccentive solver networks. But rather than simply accessing external solutions, they were now accessing external mindsets, different ways of thinking about evidence, value, and confidence that could enhance their own approaches. The partnership with a research hospital proved particularly transformative. Their clinical trial processes required a level of evidence rigor and ethical consideration beyond what Freya's team had imagined. By understanding how the hospital's teams built confidence in life critical innovations, Freya's organization gained new perspectives on what true evidence-based decision making could look like in their own context.

SPEAKER_03: 27:34

Beyond metrics, the value realization focus.

SPEAKER_00: 27:42

As Freya worked to shift the organization's innovation mindset, she recognized that a critical dimension was missing from many discussions, a genuine focus on value realization. Despite all the sophisticated metrics and frameworks, conversations rarely centered on the fundamental question of how innovations would actually deliver value in practice. We've become very good at assessing expected value through the XV model, she explained to the Governance Board, but we don't spend enough time discussing how that value will be realized once innovations are implemented. This insight led to a deliberate effort to shift the innovation conversation from metrics focused to value focused, from discussing how initiatives scored to how they would create tangible impact. This shift included several key elements. Value pathway visualization transformed how initiatives were presented and discussed. Rather than focusing primarily on X V scores or confidence assessments, teams were asked to clearly articulate and visualize the specific path through which their innovations would create value, the causal chain from implementation to impact. Value barrier identification shifted risk discussions from generic concerns to specific obstacles that might prevent value realization. Teams were encouraged to proactively identify and address the particular barriers that had historically prevented similar innovations from delivering their expected value. Value capture planning became a required element of all innovation proposals. Teams needed to explain not just what value might be created, but how it would be measured, tracked, and captured to ensure it didn't dissipate after implementation. Value realization reviews supplemented traditional project postmortems. These structured assessments examined the gap between expected and realized value, focusing on understanding why some innovations delivered more or less value than anticipated. We need to be as disciplined about value realization as we are about idea revaluation, Freya told her team. The most elegant innovation system is meaningless if it doesn't ultimately deliver tangible value to the business. This value centered approach created a much more grounded innovation conversation, one that connected directly to business outcomes rather than innovation processes. It shifted the cultural emphasis from sophisticated assessment to practical impact, from scoring ideas well to ensuring they actually delivered. In the end, what matters isn't how well we measure innovation, Axel observed. It's how effectively we create value through innovation. That's the mindset that needs to permeate everything we do. This focus on value realization connected directly to their work with the table of justice and retrospective learning. By examining past decisions through the lens of value delivery rather than just decision quality, they strengthened the feedback loop from implementation back to evaluation, creating a continuous learning cycle across the entire innovation journey.

SPEAKER_03: 31:08

Designing cultural interventions.

SPEAKER_00: 31:13

Over the next few months, Freya's team redesigned their rituals. Every kill decision came with a short reflection shared in a monthly lessons earned forum. Confidence scores had to be justified with a narrative, not just a number. Innovation reviews included a moment of gratitude, who helped, who stretched, who challenged the thinking. They ran storytelling sessions not just of success, but of learning. Axel even launched a quarterly honest metric session where the team surfaced moments when data failed, was misread, or led them astray and what they did about it. It wasn't therapy, it was culture. These interventions weren't random, they were deliberately designed to address the specific cultural patterns that were undermining the innovation performance system. The Lessons Earned Forum tackled the attribution gap by creating space to honestly discuss how innovation actually happened, including the setbacks, surprises and sideways movements that traditional success stories often omit. The name itself was significant, shifting from lessons learned, passive, past tense, to lessons earned, active, achievement oriented. The narrative requirement for confidence scores addressed the certainty reflex by forcing explicit articulation of the thinking behind the numbers. This made it harder to game the system and easier to identify when intuition and evidence were misaligned. The gratitude practice tackled the invisible reward system by publicly recognizing contributions that might otherwise go unacknowledged, particularly those that improve decision quality rather than just decision outcomes. The storytelling sessions and honest metrics forums normalize the reality of innovation work, that it involves uncertainty, misinterpretation, and course correction as natural elements rather than exceptional failures. Together, these interventions created what Axel called cultural infrastructure, the habits, language, and shared experiences that would sustain the innovation's performance system even as tools and frameworks evolved. These cultural interventions evolved differently across the S-curve stages they had identified in their portfolio work. For innovations in the emergence phase, interventions emphasized psychological safety and learning velocity. In acceleration they focused on cross-functional coordination and implementation handoffs. For maturity phase initiatives, the emphasis shifted to continuous improvement and knowledge transfer. This differentiated approach recognized that cultural needs varied as much as metrics across the innovation life cycle. To measure the impact of these cultural changes, the team developed a simple but effective tracking system. Before each major meeting, they asked participants to anonymously rate the psychological safety, truth-seeking behavior, and value focus on a one-to-five scale. These cultural vital signs gave them quantitative feedback on whether their interventions were creating the desired environment, allowing them to adjust their approach based on evidence rather than impression. The language of performance language shapes reality, and innovation language was often dominated by opposing extremes, either breathless hype about disruptive breakthroughs or clinical dissection of incremental improvements. Freya recognized that sustainable innovation performance required a different vocabulary, one that could honor both ambition and discipline, both creativity and rigor. She worked with the team to develop what they called performance language for innovation. Instead of innovation success, they talked about innovation effectiveness, acknowledging that value creation comes in many forms, not just spectacular wins. Instead of failure, they discussed invalidated hypotheses, recognizing that disproving an assumption is a form of progress, not a setback. Instead of confidence, they sometimes used evidence strength, shifting focus from personal certainty to objective support. Instead of saying an idea was killed, they might say it was archived or suspended, acknowledging that timing and context influence viability as much as the idea itself. This wasn't euphemistic rebranding, it was precise language that better reflected the reality of innovation work. The words themselves created mental space for nuanced thinking about performance, thinking that wasn't binary, success or failure, but continuous, more effective or less effective. The language also incorporated time horizons more explicitly. Ideas weren't simply good or bad, they were ready or not yet ready, aligned with current capabilities, or requiring capability development. This temporal dimension recognized that innovation value is context dependent. What doesn't fit today might be essential tomorrow. Over time, this performance language spread beyond the innovation team, influencing how leaders throughout the organization discussed uncertainty, learning, and value creation. It became part of the company's cultural vocabulary, a shared way of making sense of the complex, nonlinear work of innovation. This language transformation wasn't universally embraced at first. Some leaders felt it was too nuanced, preferring the clarity of binary assessments. But when a major regulatory shift suddenly made a previously killed project highly relevant, the fact that it had been suspended rather than eliminated proved critically valuable. The team was able to rapidly revive and adapt the work, reaching market months ahead of competitors. This tangible benefit of nuanced language helped convince even the most skeptical leaders of its value. Celebrating value realization, not just innovation activity. As Freya worked to transform the organization's innovation mindset, she recognized that their celebration practices were still focused primarily on innovation activities rather than value realization. Teams were recognized for launching innovations, but rarely for ensuring those innovations delivered their expected value. We need to shift our recognition rituals from celebrating activity to celebrating impact, she explained to the leadership team. The moment deserving of greatest recognition isn't when an innovation launches, but when it delivers measurable value. Working with the communications and HR teams, Freya developed value realization rituals, structured celebration practices focused specifically on value delivery rather than innovation launches. These included value milestone celebrations that marked significant points in an innovation's value delivery journey, the first$100,000 in realized value, reaching breakeven on investment, exceeding value projections, or successful scaling to new contexts. Value journey stories captured and shared the full narrative of how value was created, from initial concept through implementation challenges to actual impact. Unlike traditional success stories that often glossed over difficulties, these narratives honestly portrayed the complex nonlinear path to value realization. Value contribution recognition acknowledged all those who contributed to successful value delivery, including implementation teams, change management specialists, and operational staff who made innovations work in practice, not just the original innovation creators. Value learning reviews celebrated not just value delivered, but insights gained about how value is created, captured, and scaled. These structured reflections turned individual value. Delivery experiences into organizational learning that could improve future value realization. What we celebrate signals what we truly value, Freya told her team. If we want a mindset focused on realized value rather than innovation activity, our recognition practices need to reflect that priority. This shift in celebration focus created powerful reinforcement for the value-centered mindset Freya was trying to foster. When people saw colleagues being publicly recognized specifically for delivering measurable value rather than just launching innovations, it naturally shifted attention toward the outcomes that truly mattered. Recognition isn't just about appreciation, Axel observed. It's one of our most powerful tools for shaping organizational focus and behavior. This celebration shift wasn't without resistance. The marketing team in particular had invested heavily in launch events as key moments for both internal and external communication. Rather than eliminate these, Freya worked with them to evolve the events to include both the launch celebration and a clear articulation of the value journey to come, with commitments to future value milestone celebrations. This preserved their important role while shifting the emphasis toward ultimate impact.

SPEAKER_03: 41:24

Leaders as cultural signals.

SPEAKER_00: 41:30

Freya understood that her own behavior sent powerful signals about what really mattered. Formal metrics and processes could be undermined or reinforced by her daily actions, especially in moments of pressure or ambiguity. She began deliberately modeling the mindset she wanted to see in others. When a promising idea showed declining confidence, she openly discussed the evidence rather than defending the original hypothesis. When she was uncertain about a recommendation, she acknowledged the limits of her understanding rather than projecting false certainty. When an initiative succeeded through a different path than expected, she highlighted the learning journey rather than just celebrating the outcome. These weren't grand gestures, they were everyday moments that demonstrated innovation performance in practice, showing that it was possible to be both ambitious and honest, both demanding and realistic. Perhaps most importantly, Freya began sharing her own vulnerabilities more openly. In one portfolio review, she acknowledged a pattern in her decision making. I notice I tend to overinvest in technical solutions when the real barriers are often organizational. That's a bias I'm working on. This level of self-reflection created permission for others to examine their own thinking patterns, to see themselves not just as decision makers but as decision improvers, constantly refining how they navigate uncertainty and complexity. Other leaders began following this example. David, once the skeptical CFO, now occasionally shared his own struggles with balancing prudent resource management against innovation potential. I'm learning that my risk threshold might be calibrated for a world that no longer exists, he admitted in one governance meeting. These leader behaviors weren't secondary to the innovation performance system. They were primary, the living embodiment of the mindsets that made the metrics meaningful. David's evolution was particularly significant. In many ways, his journey from sceptic to advocate mirrored the broader transformation the entire book chronicles. He had moved from asking what's the value of all this, to actively demonstrating the vulnerability and learning orientation that made the system work. His willingness to acknowledge his evolving thinking about risk, uncertainty, and investment criteria created powerful permission for other leaders to embrace similar growth. External partners and clients began noticing the cultural shift as well. During a joint review with a key customer, their head of procurement remarked, What impresses me isn't just your solutions, but how your teams talk about them. There's a confidence that comes from honest assessment rather than over-promising. We trust your perspectives because you're clear about what you know and what you're still learning.

SPEAKER_03: 44:37

Opening the innovation ecosystem from control to orchestration.

SPEAKER_00: 44:45

As Freya worked to transform the organization's innovation mindset, she recognized that a fundamental shift was needed in how they thought about innovation boundaries and control. The current approach still treated innovation as something the organization owned and directed rather than something it participated in and influenced. The most innovative organizations don't just use open innovation tools, she explained to the executive team. They fundamentally shift how they think about their role in innovation ecosystems, from controlling to orchestrating. Working with external partners, Freya developed what she called the open ecosystem mindset, a deliberate shift from treating innovation as an internal capability to seeing it as a collaborative network that extended beyond organizational boundaries. This mindset shift included several key elements. Challenge broadcasting replaced solution secrecy. Rather than keeping innovation challenges internal to protect competitive advantage, the organization began selectively sharing key challenges with trusted external networks, recognizing that the benefits of diverse solution approaches outweighed the risks of transparency. Permeable boundaries transformed how ideas and talent flowed. The organization became more deliberate about creating pathways for external ideas to enter and internal ideas to be developed externally when appropriate, acknowledging that the best home for an innovation might not always be inside the company. Shared value frameworks replaced winner-takes all approaches. When working with external partners, the organization developed more sophisticated models for sharing both the risks and rewards of innovation, creating sustainable collaboration rather than transactional relationships. Ecosystem influence supplemented direct control. Leaders began to see their role as shaping innovation ecosystems through influence, standards and platforms, not just directing internal innovation activities. Open innovation isn't just about finding solutions elsewhere, Freya told her team. It's about fundamentally rethinking our relationship with the broader innovation ecosystem, seeing ourselves as participants rather than controllers. This mindset shift created a much more expansive view of innovation possibilities. It moved the organization from a scarcity mentality where innovation depended primarily on internal resources to an abundance perspective where value could be created through orchestrating much larger networks of talents, ideas, and capabilities. The most innovative organizations don't try to do everything themselves, Axel observed. They focus on what they do best and build networks that complement their strengths. That's not just a tactical choice, it's a fundamental mindset about how innovation happens. This open ecosystem approach built directly upon their earlier work with open innovation and open talent, creating the cultural foundation needed to fully realize the potential of those practices. It complemented their technical approach to working with external solvers by addressing the psychological barriers of not invented here thinking and ownership protectiveness that often undermined the value of external collaborations.

SPEAKER_03: 48:29

The trust equation.

SPEAKER_00: 48:32

One morning, Freya received a slack message from a junior product analyst she barely knew. Hey, just wanted to say thanks. I saw my work get killed last quarter. And it sucked. But last week we used what I learned to land a new client. I've never been more proud of something that didn't ship. Freya saved the message. She knew the system wasn't perfect, it didn't need to be. It needed to be alive. This message represented something powerful, what Axel had started calling the trust equation in innovation performance. For the system to work, people needed to trust that. One, honest assessment wouldn't be punished. Two, good process would be valued regardless of outcome. Three, learning would be reused, not wasted. Four, their contribution would be recognized beyond simple success or failure. When these trust conditions were met, people engaged with the innovation performance system authentically rather than performatively. They shared real confidence levels rather than inflated ones. They pursued meaningful learning rather than superficial activity. They made decisions based on evidence rather than politics. The product analyst experience showed the trust equation in action. Despite the disappointment of seeing their work killed, they witnessed their learning being valued and reused. This created a powerful reinforcement loop, making them more likely to engage honestly with the innovation system in the future. This virtuous cycle where trust enables honesty, honesty improves decisions, and better decisions build more trust was the engine of sustainable innovation performance. It couldn't be mandated or installed. It had to be cultivated through consistent experience over time. The trust equation wasn't universally successful immediately. Some team members had been burned by previous initiatives that had promised to value learning but ultimately still rewarded only success. Freya recognized this would take time to overcome. Rather than trying to convince these skeptics with words, she focused on creating experiences that demonstrated the new reality. When an experienced engineer finally shared a genuine concern that had been bothering him for months, the team's positive response and subsequent reorientation of the project created a powerful proof point that the trust equation actually worked in practice. Connecting value mindsets to value realization. As the mindset shift took hold across the organization, Freya began to see a direct connection between cultural changes and improved value realization. The more authentic the engagement with the innovation system became, the more effectively innovations delivered their expected value after implementation. There's a direct line between how we think about innovation and how much value we actually create from it, she explained to the Governance Board. When people engage with a system authentically rather than performatively, we see much higher conversion rates from expected to realized value. This connection manifested in several observable patterns. Earlier risk identification emerged naturally when teams felt safe discussing uncertainties honestly. When people weren't pressured to project false confidence, they surfaced potential implementation barriers much earlier, allowing for proactive mitigation rather than reactive crisis management. More realistic value projections resulted from genuine confidence assessments. Teams became neither overly optimistic nor unnecessarily conservative in their value estimates, leading to more accurate planning and resource allocation. Smoother implementation handoffs occurred when the full innovation journey was valued rather than just the creative front end. When implementation teams were recognized as critical value creators rather than mere executors, transitions became more collaborative and effective. More persistent optimization continued after initial launch. When value realization rather than just innovation launch was celebrated, teams remained engaged in refining and improving solutions to maximize their impact over time. The mindset shift isn't just making our innovation process more honest and authentic, Freya told the executive team. It's directly increasing how much value we realize from our innovation investments. This connection between cultural change and value creation provided powerful reinforcement for the mindset transformation. It demonstrated that the shift wasn't just about culture for culture's sake, but about creating tangible business impact through a more authentic approach to innovation. The right mindsets don't just make innovation more meaningful, Axel observed, they make it more valuable. The Customer Service AI Assistance Initiative provided a powerful example of this connection. After some initial success, the project had struggled with adoption. Under the old culture, the team would have defended their implementation and blamed users for resistance. In the new truth-seeking environment, they instead engaged deeply with the customer service representatives, discovering that the AI was solving the wrong problems. This honest assessment led to a significant pivot that ultimately delivered 40% more value than original projections by focusing on what mattered most to both employees and customers.

SPEAKER_03: 54:30

From process to practice.

SPEAKER_00: 54:35

As Freya reflected on their journey, she realized they had moved beyond implementing an innovation process to establishing an innovation practice. A process is something you follow, a practice is something you develop. A process aims for consistency. A practice strives for mastery. A process can be copied. A practice must be cultivated. This shift from process to practice was evident in how people engaged with the innovation performance system. They weren't just completing required assessments or following prescribed steps. They were developing judgment, building pattern recognition, and refining their ability to navigate uncertainty effectively. Team members increasingly customized the frameworks to fit specific contexts without losing their essential purpose. They adapted the language to resonate with different stakeholders while preserving the core concepts. They created specialized applications for unique challenges while maintaining consistent principles. The innovation performance system had become less like an operating manual and more like a craft, something people got better at through deliberate practice, reflection, and adaptation. It had the flexibility to evolve while maintaining its fundamental integrity. This practice oriented approach made the system more resilient to personnel changes, market shifts, and organizational restructuring. It didn't depend on specific people or conditions to function. It had become embedded in how the organization approached uncertainty, learning, and value creation. This evolution from process to practice directly paralleled the book's central journey from innovation theatre to innovation performance. Theatre follows a script, performance requires embodied understanding. Theatre seeks applause, performance seeks impact. Theatre ends when the curtain falls. Performance continues to evolve with each iteration. The ultimate evidence of this transition came when a new division leader joined the organization. Rather than requiring extensive training in the expected value system, she was able to absorb its principles naturally by participating in the practice. It's not that complicated, she observed after just a few weeks. You're just being honest about what you know, disciplined about learning what you don't, and focused on creating actual value rather than just activity. Everything else is just structure to support those principles.

SPEAKER_03: 57:24

The cultural integration point.

SPEAKER_00: 57:29

And by that measure, something profound had shifted. Innovation's performance wasn't a separate initiative or specialized approach anymore. It had begun merging with how the organization thought about performance overall. Strategic discussions naturally incorporated confidence assessments alongside traditional forecasts. Resource allocation processes considered learning velocity alongside financial metrics. Success narratives included honest accounts of the messy path to value creation rather than sanitized versions of linear progress. This integration didn't mean abandoning specialized innovation frameworks or metrics, but it did mean those tools were increasingly seen as applications of deeper principles rather than exceptional approaches for unusual circumstances. One afternoon, Freya and Axel stood on the same rooftop where months earlier they had diagnosed the system's cultural drift. This time they weren't troubleshooting, they were reflecting. We're not done, are we? Axel asked, looking out at the river. Freya smiled. I think we're just beginning. The metrics were only ever step one. And what's step two? I'm not sure there is a step two exactly, she replied. It's more like expanding circles. The principles we've built for innovation are starting to influence strategy conversations, operational decisions. Even how HR thinks about talent development. Axel nodded. From innovation performance to organizational intelligence. Something like that, Freya agreed. The distinction between innovation activities and business activities is blurring, and that's exactly as it should be. As they watched the light change on the water, Freya felt a quiet sense of achievement, not the satisfaction of a completed project, but the deeper contentment of having started something that would continue to evolve long after her direct involvement. Innovation performance was becoming organizational performance, a more sophisticated, reality based way of navigating complexity and uncertainty wherever it appeared. And in a world where complexity and uncertainty were increasing in every domain, that wasn't just an innovation advantage, it was a strategic imperative.

SPEAKER_03: 1:00:01

TLDR.

SPEAKER_00: 1:00:04

When metrics become performances rather than tools, innovation systems lose their power. Freya discovers her team is going through the motions rather than embodying the principles, giving confidence scores without doing the research, claiming learning without reflection, and avoiding difficult conversations. By recentering on the original challenges being solved, leveraging AI for cultural sense making, identifying cultural lead users who naturally embody desired mindsets, and shifting celebrations from activity to realized value, she revitalizes the cultural foundation that makes the technical system meaningful. This cultural transformation directly accelerates value realization by creating more honest risk assessment, realistic projections, and persistent optimization beyond initial launch.