Front End Day Two May 24 2:30
We've just completed the second day of the Front End of Innovation event. Over lunch we had Michael Treacy speak on innovation discipline. One of the things he said that I found particularly compelling was the idea of the cost of failure.
In the US, the cost of failure tends to be fairly high, psychologically and in monetary terms. It can cost a fair amount of money to shepherd a new idea through an organization and have it fail in the marketplace. However, in China and India, the cost of failure is relatively low. The cost to design and develop an idea in these countries is significantly lower, so we can expect to see much more brute force innovation from these countries.
If the cost of failure is high, then the processes for innovation in more developed countries needs to be much better. Since it's expensive to fail, at least in mid-size and larger organizations, these firms need better innovation process and discipline.
Another point he made I'd like to expand on another time is who is capable of innovation. We don't let marketing create and publish our financials, so why should "anyone" be part of an innovation initiative? Shouldn't we require these people to get educated or trained? I have a number of thoughts about that topic that will be the point of another post.
Finally, like a lot of us, Treacy wonders about the many different definitions of innovation. Do the people within your organization hold the same definition for innovation? He suggested a definition:
Significant improvement along the main parameters of customer value
Some of Treacy's concepts from my perspective were too engineering and "MBA" focused. There needs to be some room for ideation and insight. His presentation really focused on a very rigorous approach using tools that financial analysts could love, but I found it very product centric.
More later
In the US, the cost of failure tends to be fairly high, psychologically and in monetary terms. It can cost a fair amount of money to shepherd a new idea through an organization and have it fail in the marketplace. However, in China and India, the cost of failure is relatively low. The cost to design and develop an idea in these countries is significantly lower, so we can expect to see much more brute force innovation from these countries.
If the cost of failure is high, then the processes for innovation in more developed countries needs to be much better. Since it's expensive to fail, at least in mid-size and larger organizations, these firms need better innovation process and discipline.
Another point he made I'd like to expand on another time is who is capable of innovation. We don't let marketing create and publish our financials, so why should "anyone" be part of an innovation initiative? Shouldn't we require these people to get educated or trained? I have a number of thoughts about that topic that will be the point of another post.
Finally, like a lot of us, Treacy wonders about the many different definitions of innovation. Do the people within your organization hold the same definition for innovation? He suggested a definition:
Significant improvement along the main parameters of customer value
Some of Treacy's concepts from my perspective were too engineering and "MBA" focused. There needs to be some room for ideation and insight. His presentation really focused on a very rigorous approach using tools that financial analysts could love, but I found it very product centric.
More later
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3 Comments:
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