Friday, June 02, 2006

Kissing Frogs and Picking Horses

There are several schools of thought around the best "methods" to build a culture for innovation in your business. By this I am not talking about processes or tools, just the simple cultural expectations about how innovation should "work". For example, some would advocate a fail fast, fail frequently approach. This is what I call Kissing Frogs, from the "you've got to kiss a lot of frogs to find a prince." Another approach is to hand select a few ideas or concepts and place much larger bets. This approach is like betting on horses at a racetrack.

What's realistic in most businesses? Since most firms aren't greenfields, there are established norms, expectations, procedures and teams. Innovation must work within those constraints if it is to be sustainable. Otherwise it will be considered a strange off-shoot with its own goals and metrics. These constraints exist and must be factored in to the way your team approaches innovation.

In many organizations, the kissing frogs approach is hampered by the rules and expectations around starting many projects. While Dean Kamen and Thomas Edision can explore, and fail at, many different ideas and concepts and quickly move to another, this approach can be very difficult in a larger, established business that requires project justification, cost centers, senior management signoff and so forth. Even in businesses where failure is tolerated, it is hard to rapidly move from a failure to an entirely new concept or project.

That leads us to the "picking horses" approach. Since the culture of larger organizations is all about risk reduction, many ideas get thrown out before they are considered, and only certain ideas even get into the race. Then, based on the previous performance of ideas in a category or from a specific sponsor, big bets are made on just a few ideas. In this instance, in for a dollar, in for a dime. The fixed costs associated with starting a project mean that you should shoot for a larger return.

The problem with the "picking horses" approach is that only ideas that have some track record or champions that have some track record will be selected. We are accepting all of the constraints the business presents and eliminating many possible options. This approach is probably OK for incremental innovation, but by definition will knock out any disruptive innovations, since there's no track record. The picking horses approach also significantly limits the funnel of new ideas and the people who can work on those ideas.

Now, if we can get our cultures to move towards the kissing frogs approach, we'll have more ideas that progress down the innovation process. Of course, we'll also have more failures. For a long time the Japanese electronics manufacturers followed this approach in Japan. To visit Japan was to see hundreds of electronics devices that were experiments or small batches that for one reason or another the manufacturers decided not to place into large scale production. The purpose of these was to get a new feature or application into customers' hands and to learn from the experience.

I think there should be a happy medium. Few businesses can sustain a true "kissing frogs" approach once they reach a certain size and critical mass. There's just too much overhead, expectation and infrastructure to manage to create lots of small projects, each with little probability of success. However, limiting the pool of ideas and people who can work on them simply because the organization's culture can't adapt certainly doesn't make sense either.

I recognize this is a somewhat simple dicotomy I've used as a strawman. What other approaches are you aware of to encourage innovation in a culture?
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posted by Jeffrey Phillips at 9:54 AM

5 Comments:

Anonymous Dave Bayless said...

What if "horse picking" organizations were to collaborate with "frog kissing" organizations? It's not a new idea, of course. Old-school R&D organizations such as Bell Labs and Xerox PARC famously kissed frogs, while other organizations placed bets on the most promising inventions. Similarly, venture capitalists and angel investors fund parallel experiments in technologies and business models, some of which become acquisition candidates for the Cisco's of the world. When industry clockspeed is low-to-moderate, it can make sense to enclose frog kissing and horse picking within the same organizational boundary. As Henry Chesbrough and others have observed, when industry clockspeed increases, inter-organizational collaboration starts to make sense. For some organizations, it might make sense to run a test to see whether an integrated or modular approach works best for them.

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