Friday, August 06, 2010

Why is consistent innovation so difficult?

I've been wracking my brain for weeks now, trying to figure out why something that should be relatively easy seems so difficult.  Why is consistent innovation so difficult for most companies?  After all, most organizations are built on sustaining business models and processes.  The strength of many organizations is their operating processes, which have become well oiled and perfected over time.

If a core strength or capability of most businesses is sustaining and maintaining well defined processes, then you'd think that creating and sustaining an innovation process should be a no-brainer.  Doing something once is difficult, and doing something periodically is haphazard.  This is the real challenge of innovation - most firms don't do it frequently enough or use consistent enough models to create a well honed innovation process.  Those that innovate several times and then find their attention drawn elsewhere stop just short of the tipping point that leads to a consistent, sustainable innovation process.

Isn't it interesting that most businesses hold well defined processes in high esteem?  They seek consistency, lack of variability and well-established workflow to cut down on costs, overhead and complexity.  Yet when they consider innovation, it is rarely as a consistent effort or process, but in reaction to a life threatening event, and considered at best a one-time effort, not worthy of process development and definition.  Just by declaring the development of a process too time consuming and difficult, the management team declares that innovation isn't as valuable as other processes.  If innovation were as important as other business functions, then clearly it would have a well defined process just like all the others, especially given the fact that we compensate and reward people to work within the stated processes.

In my experience, when it comes to doing new things, many businesses find it easy to start new initiatives but hard to replicate them.  In contrast, once some new product, service or offering finds its way into the machinery of existing processes, they are hard to ever terminate.  So we build barriers and make it difficult to create new things, and build barriers to terminating products and services that have lived well beyond their usefulness.

Note that it isn't the case that firms have a difficult time creating consistent, sustainable processes and products.  Quite the opposite.  Most firms have a significant number of sustained products and processes that people understand, support and enable.  The interesting challenge is where innovation is concerned.  If we can state that innovation can be developed and sustained like any other business process, and clearly firms can sustain other processes, then what's the barrier to sustained innovation?

I think it has to do with strategic commitment.  Clearly most organizations have plenty of ideas and plenty of proactive and reactive opportunities.  They also sustain processes that are important to the operation and/or revenue of the business.  So innovation either isn't considered pertinent, doesn't appear to drive revenue or improve effectiveness, or is simply lost in the moment to moment decision making of corporate executives. 

Which is interesting, because every successful innovator seems to drive more revenue, and drive more differentiation than other firms in their industry.  So I'm left with the fact that executives are far too often hot and cold and hot again about innovation, and that means a consistent innovation process, which requires commitment and exercise over time, can't be sustained.
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posted by Jeffrey Phillips at 12:04 PM

3 Comments:

Anonymous David Locke said...

Continuous, sustaining innovation should be a repeatable process. Why that doesn't happen? Mismanagement?

Discontinuous innovation is not repeatable. It is done in startups precisely because the things that make a sustaining business successful will kill these innovations.

All non-follower companies, and these are few, build a market, build a business, build a technology, build a portfolio of products on that technology, and then migrate across the technology adoption lifecyle. As they migrate, the change to suit their incoming market. Once they are serving that market well, they can no longer serve their former market. This happens again and again.

As they migrate across the adoption lifcycle, they, as an organization, forgets. They lay people off, or people leave, because they no longer fit. They bring in new capabilities that erase the former ones, the ones that fit the earlier market. They change the offer.

The organization seems continuous, but really it is only smooth. It is really a smooth illusion projected by its discrete underlying infrastructure. This is what they cannot get back. This is what they cannot repeat, so discontinuous innovation demands and requires separation.

Managers are taught to leverage economies of scale, but for discontinuous innovations, there are no economies of scale--at least in an firm organized in the standard ways.

So yes, as long as scale, now, and efficiency define managerial competence, innovation will fail.

2:03 PM  
Anonymous Business Innovation said...

Jeffery,

Your suggestion that innovation is a process that can be managed like any other process is well said. I agree. I think the problem with inconsistent innovation comes from two sources.

First, even an innovation process that is well-managed will yield innovations at uneven intervals. So the company can have an innovation process with little variation (in control) and have no significant innovations as a result. We must remember that just because a firm uses an innovation process, it does not mean the company will get any certain number of innovations at any certain point in time.

Second, innovations are a bit interactive. One innovation leads to another. So we would expect innovations to be clustered and uneven. This is particularly true when companies create enabling innovations--those innovations that must be in place before another can be developed.

Overall, it seems important for companies to manage their innovation processes however, it is not clear to me why innovation needs to be consistent. I suspect the total contribution of innovations is more important than the distribution of innovations.

2:42 PM  
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8:33 PM  

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