Tuesday, December 29, 2009

What Innovators Need

I was listening today to a story about the demise of Tower Records.  At one time Tower Records was the place to find new music.  The stores were jammed with CDs and knowledgeable clerks who could turn you on to new music.  The story said that Tower was damaged by the ability to download music, but interestingly also pointed out that two-thirds of all music bought in 2009 was on a CD format.  Tower closed in 2006, so most likely the proportion of music sold on CDs was even higher then.  What happened to Tower?  Is it possible to draw conclusions on the failure of Tower Records about innovation?

The radio article concluded that as Tower expanded, it wasn't able to attract and retain passionate employees who cared about music.  This is one of the aspects of Tower Records that made it unique.  As Tower Records lost the ability to create an interesting "place" for people who loved music, it began to compete with the Big Box stores.  Why seek out a Tower Records if you can get a lower price at Big Box store?  The reason that people went to Tower was for the insights, the community and the selection.  Take away some of those features and Tower seemed a big stale, and overpriced.

Tower lost a sense of passion about music, and with that it lost a sense of "place".  Then, its purpose was less obvious.  When these factors, passion, purpose and place, became fuzzy or were simply abandoned, Tower Records had no real distinction over the music section at Wal-Mart.  After all, what differentiates a commodity?  Music on CDs is a commodity, and Wal-Mart and the Big Box stores are good at inventory management and cost reduction.  But try to find someone at the Wal-Mart music section who knows the difference between the Whigs and the Afghan Whigs.

Innovators, too, need these factors to succeed.  When innovators have a specific purpose, their work is aligned with the needs of the organization, and is in synch with corporate strategy.  When innovation isn't in alignment with an organization's needs and goals, it seems mindless and lacks value.  A clearly stated purpose for innovation is crucial, and without it innovators will struggle.  I've written previously about the need for passionate people in an innovation effort.  Simply lining up a team and pointing them to a necessary goal may work for many corporate initiatives, but it won't for innovation.  There are simply too many challenges and risks associated with innovation.  Innovation needs passionate, committed people who have a clear purpose.

Finally, innovation will succeed when it has a "place".  This term is a bit trickier to define.  In the case of Tower Records, "place" meant community - you knew that music was valued and appreciated, and you'd interact with others who had the same insights and interests at Tower.  From an innovation point of view, a "place" can be a physical location - an innovation lab, where people are encouraged to think creatively.  It could be a virtual place using software to encourage interaction, like Dell's IdeaStorm site.  Or "place" could suggest a community or social networking site to encourage innovators to interact.  Regardless, what is important is the ability to mix and mingle with people who share a common goal, methods and philosophy.

If these three factors - a clear purpose, passionate people and a sense of place - are available for an innovation team, then the chances of success are much greater.  If any of these aren't available, then innovation will lag, since all of the ingredients are important.  Passionate people with a purpose still need physical and virtual "places.  Passionate people with a "place" need a clear purpose.  And few innovations are ever launched by people who lack passion, regardless of their purpose or place.
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posted by Jeffrey Phillips at 5:46 AM


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