Friday, March 26, 2010

Why "top down" innovation is difficult

As a person who works with a number of firms attempting to improve innovation capabilities, I am constantly astonished by the disconnect between what senior executives say they want and what actually gets done in most businesses, at least within the context of innovation.  As they say in government, the president proposes and Congress disposes.  Most executives I interact with say they want innovation, but the force of their desire and the clarity of their vision doesn't translate down to the people who will actually do the work.  I think there are at least three reasons for this.

First, most senior executives aren't innovators themselves.  Most senior executives grew through the organization and moved up by being effective stewards of the company's funds, resource and culture. Most of them were respectful of the history of the company and the brands.  They progressed by doing things well, and doing things efficiently.  Few senior executives in most organizations got to their posts by being demonstrably different.  In fact we create celebrities of the CEOs like Jobs from Apple or Branson from Virgin who are really different CEOs, who shook up an industry or market.  Since most senior executives weren't innovators and didn't obtain their jobs because of innovation, they don't really understand what's required when they say they want "innovation".  If your CEO or senior executive team is asking for innovation from the organization and you believe they haven't defined what they really want, stop waiting for the definition.  Like pornography they'll know it when they see it and not before, and will probably struggle giving you a definition.  If you decide to respond, simply write down your objectives and how you think that aligns to corporate strategy and start innovating.  Most likely your model will be adopted.

Second, since most executives are keepers of the culture, and in many cases creatures of the culture, they don't understand the amount of change necessary to move a company that's been focused on effectiveness, efficiency, cost cutting and minimizing errors or mistakes to a company that embraces innovation.  The biggest barrier to innovation isn't "creativity" or generating ideas or the ability to spot new opportunities.  The biggest barrier to innovation is cultural inertia and fear.  After years of very clear communication about effectiveness, lean, cost cutting and so forth, it requires a lot of trust and change to shift to an innovation posture, and cultures like battleships turn slowly.  Since most executives don't have long tenures, cultural change sounds like a Bataan death march, and those requirements are ignored, misunderstood or swept under the rug.  Even executives who understand the need for cultural change in support of innovation blanch at the work involved.  If you decide to start innovating in your product group or business unit, don't wait for the organizational cultural change.  You know what needs to happen, so create your own "local" cultural in your product line or business unit that embraces innovation.  You'll give yourself enough rope to succeed, or to hang yourself.  Either way it's a decision.

Third, most executives are driven by the quarterly drumbeat of the market, and therefore many don't have patience to examine and understand longer term goals and strategy.  Innovation, especially the disruptive innovation that everyone wants, is by its very nature a longer term effort.  So, while organizations talk about "white space" and executives demand "disruptive breakthroughs" many of them don't have the stomach for the longer term effort and don't understand the investment involved.  Trend spotting and scenario planning isn't hard, it just requires a commitment to doing the work and understanding what the future may hold.  Most firms don't do this well, if at all.  Strange to think that the one place we are all heading is the one place most firms don't do a good job of understanding.  For most executives the future, especially anything more than 5 years out, is simply unknowable and perhaps beyond their expected tenure, so why try?  If you want to innovate, you've got to piece together views of the future beyond the annual plan.  Most organizations have a product development cycle greater than 18 months, so a three to four year look into the future on a regular basis should be automatic, but it's not.

Fourth, some innovation programs assume that executives should be the ones to generate the ideas, and the middle managers, product managers and so forth are the ones who should figure out how the ideas get implemented as new products.  With a few exceptions, I can't think of a worse way to run an innovation program.  Most senior executives are rarely in touch with the lives of their actual customers, and have little understanding about the challenges the customers are trying to solve or the new opportunities they have in their lives.  Most executives sit in meeting after meeting with other executives and never actually meet their customers or understand their lives.  Like the GM executives who only drove GM cars and never purchased their own gas, many executives are isolated from their customers and their customers' needs.  If you want to innovate, listen to the strategies being defined by the executive team and then go out and find out what customers really want and need, and align your ideas if possible to both requirements, giving more weight to the customers' needs.  The ultimate fulfillment of the Peter Principle is that the higher you climb in executive management, the further removed you are from what an average customer really wants.  This makes dictating the kinds of innovation necessary very difficult and results in vague requests for innovation. 

Finally, many organizations are so large that it is difficult to have a crisp statement of strategy or strategic intent.  Without clearly defined corporate goals and strategies, it becomes hard for innovators to decide which problems are more important and which ideas are valid.  In the absence of clear strategic and strategic direction, all ideas seem relevant.  In a large firm, innovation is all about resource allocation - picking the "best" ideas among a number of competing ideas.  Your executive team needs help here as well.  They want organic growth, differentiation or disruption, or some combination of those three things.  They need to know that innovation is a tool in service of these corporate goals, not a strategy in and of itself.  If you can help them identify and clarify the goals for the firm, then you can apply innovation as a tool to rapidly improve any of those three factors.  Strategic clarity is usually lacking, but executives don't understand why that is so important to innovators.

If you are still reading at this point, you may think that "bottom up" innovation is the only way to succeed, and for many firms I think that's probably right.  Having people who understand the need of the customer means being close to the customer or prospect, which is less likely to happen at senior levels.  It means more flexibility and risk taking, and having a longer term point of view, both less likely to happen at senior levels.  If these things are true, what can executives do to spawn innovation?

They can impact the culture through rewards and recognition.  They can understand their value in creating clear strategic goals and communicating those effectively. They can introduce tools, techniques and methodologies to help the innovators accomplish their goals.  They can introduce a common language and approach for innovation as tools for innovators to use.  They can encourage networking and interaction with other firms which will spawn many more new ideas.  They can introduce new tools to gain customer insight.  They can create new funding mechanisms beyond an annual plan.  In essence, they can become the cheerleaders, funders and toolbringers, which is really all they can do effectively.
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posted by Jeffrey Phillips at 5:36 AM 11 comments

Tuesday, March 23, 2010

Finding time to innovate

I've been in many corporate meetings that left me wondering where I could apply to get back the two hours I had just spent that were completely unproductive, so I am completely convinced that it is possible to lose time, or use it ineffectively in any organization.  But what's puzzling to me is the argument that I hear from many people that they need to "find" time to innovate, as if there are spare pockets of hours or days in hidden corners in their office, simply waiting to be discovered. 

Finding time to innovate is nonsensical, at several levels.  First, if an initiative is important to you or your management team, then those activities make it onto your calendar.  Second, if you are good at what you do, or are in demand from others, then they will place demands on your calendar to participate in their work or activities.  Third, once the calendar is full, it's hard to take on something new, and many of us allow our calendars to fill up with tactical, firefighting exercises that are urgent but not important.  Only then do many executives state that they simply "can't find the time" to innovate.

I would suggest that we reverse the order of placing items on the calendar.  If innovation is important, then time for innovation needs to go on the calendar.  This will provide evidence to those in your sphere of influence that you are placing an emphasis on creativity and innovation.  Where you put your time sends signals to those around you, and those that report to you.  Then, once you've anchored time in your calendar for important but perhaps not urgent tasks like innovation, you can then fill in the calendar with urgent but less important activities.  You simply won't find time to innovate - you have to set aside time to innovate.

Once you've set aside time to innovate, what should you do with that time?  Think expansively.  Identify and track trends.  Think about the future - five, seven, ten years in advance.  Anticipate market and environmental changes.  Draft a white paper that defines where you believe the market is going, and how to get there first.  Get out and interact with customers or potential customers.  Look for unarticulated or unmet needs you can satisfy.  Rethink your customer's experience.  Network with people in your industry and adjacent to your industry.  Exchange ideas with people on your team, or in other organizations. 

Sounds like fun, but doesn't look like work, is the complaint that's rattling around in your head.  And you are probably right.  This doesn't look like the work that gets done in your business, simply because everyone is focused on the here and now, the further and later is not being investigated, and can't be investigated or understood using the tools that look like work in most firms.

This has a cascading effect.  Since the effort involved in understanding innovation opportunities doesn't look like work, we find other urgent but less important things to fill our day.  Then, we are left with the conundrum that while innovation is important, we can't "find" time to innovate.  It's a vicious cycle, eventually leading to the failure to create new products and services, or to miss new market opportunities.  Then, what was urgent becomes even more urgent, and even less attention is paid to innovation.  Eventually everyone is working on next quarter's efficiency savings and no one is taking time to innovate.

This isn't a question about "finding" time to innovate - it's a challenge to balance near term demands of the business with strategic vision about the future of the business.  You can't make time, and it's our most valuable commodity.  You can strategically select where you spend your time, and by doing so send signals to others.  You make time to innovate by placing that time on your calendar before allowing the calendar to fill with other tasks and other work.
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posted by Jeffrey Phillips at 5:36 AM 2 comments

Friday, March 19, 2010

Innovators shackled by chains of their own making

I think there's a quote from someone famous that suggests that many people are shackled by chains of their own manufacture.  I didn't have the time or energy to research that quote, and it's possible I've simply made it up.  But the quote or statement is relevant to a number of people who want to innovate.  Too often we are bound not by impossible tasks or improbable ideas, but by limits we believe others are imposing on us, when often those limits don't exist.

I was speaking recently with a colleague who is a senior innovator in his firm.  For years his team had been told that "legal" wouldn't approve any new ideas, and it was useless to try to generate new product ideas, since they'd only be shot down by the legal team.  My friend, a bit bolder than the rest, suggested that they put this barrier to the test.  Rather than simply use this assumption as an excuse not to innovate, they decided to innovate and find out what would happen if they did present new ideas to legal.  Being a bit more intelligent and insightful than some of his colleagues, he also simply approached the "legal" team and asked what the roadblocks and barriers were likely to be for a new idea.  To his surprise, the "legal" team seemed interested and eager to work with him to advance new ideas.  His team, in fact his entire business unit, had been so certain for so long that legal would simply reject ideas that they had basically resigned themselves to not innovating.

I believe many organizations face this same problem.  Many executives want their teams to create interesting new products and services, since the organization needs organic growth, but many within the organization believe another business unit or function will block or reject their ideas, so what's the point of trying?  Whether that blocking factor is a person, or a business function, or an executive, many organizations have a bugaboo within their ranks that they believe will shoot down ideas.  And rather than confront the possible challenger, they simply use this "fact" as a reason not to innovate.  In fact it is probably one of the most acceptable reasons to fail to innovate, since "everybody knows" that group X will reject the idea.

Working in an agricultural organization we generated a lot of very interesting ideas for new products.  The teams seemed reticent to do much with the ideas however, so we investigated the problem.  In this organization all new products had to pass a "safety" inspection, and that group was "notorious" for rejecting ideas. So many in the organization had simply decided that rather than have their ideas rejected, they'd simply not innovate at all - to the point that anyone could literally "shoot down" an idea by simply saying "safety will reject the idea".

There is psychological research that supports this groupthink.  Years ago a scientist placed a number of monkeys in a cage with a tree, and a bunch of bananas in the top.  Anytime one of the monkeys tried to climb the tree to get the bananas, the monkey would receive a shock.  Pretty soon the monkeys were pulling back any monkey that even went near the tree.  The scientists then slowly removed the original monkeys and added new ones.  The remaining original monkeys didn't let the newcomers anywhere near the tree.  Eventually all of the original monkeys were removed, and the new monkeys were avoiding the tree, even though none of them had been shocked or tried to climb the tree.  They simply accepted the behavior as normal.

Many innovators are shackled by chains they make for themselves, or allow to be imposed on them.  The real breakthroughs happen when people reject the metaphorical chains of culture, or acceptance and start testing new ideas without fear of rejection.  Until your teams can eliminate the barriers to innovation that exist within their own expectations, and then remove barriers that actually exist within your culture, you'll simply accept the status quo.  And what you are likely to find is that the imagined barriers are much less formidable than you'd expect.
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posted by Jeffrey Phillips at 5:44 AM 2 comments

Wednesday, March 17, 2010

Help LG Design the Future

Increasingly, crowdsourcing and contests are used to gather insights and ideas from customers and prospects.  You can mind many contests where organizations will ask for your ideas.  LG, the electronics giant, is sponsoring its "Design the Future" contest for the second year in a row.  In this contest you have the opportunity to submit ideas for a new phone concept, and could win up to $20,000 if your idea is selected.

While crowdsourcing programs like Dell's Ideastorm allow you to submit ideas that may, or may not, become new products and services, the Design the Future contest will ensure that one lucky submitter will see their idea become a new product.  Check out the competition at this site.


Perhaps we'll see your idea in the new Iron Man 2 movie?

Good luck!
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posted by Jeffrey Phillips at 11:44 AM 11 comments

Monday, March 15, 2010

Innovation - Art, Science or both?

I'm a bit troubled by the fact that many people in corporate America seem to believe that innovation is a mystical art, rather than a set of skills and capabilities that many people can learn and implement.  I suppose around every complex problem solving process there seems to be a bit of magic, but at the core of all magic there's a simple set of rules.  It may take an Einstein to figure out the rules to relativity, but they are knowable, demonstrable and proveable.  So, too, are the processes, capabilities and skills behind innovation.

Another barrier to broader innovation deployment is the sense that innovation is an art - an intrinsic skill that you are either "born with" or not.  I, for one, am terrible at drawing.  I simply didn't receive an innate ability to depict people or landscapes from my parents.  I believe, though, if I tried to, I could become better at drawing using programs like Drawing on the Right Side of the Brain.  This program has radically improved the drawing ability for thousands of people, and demonstrates that even art can be learned through the careful application of basic principles.  I may never be a Van Gogh, but I can improve my drawing capabilities to a significant extent.  Why, then, do so many people believe they aren't "creative" or aren't "innovative" as if this is a binary decision?

I'm not going to argue that "anyone" can master innovation skills, any more than I'd care to argue that "anyone" can master relativity or will become a Van Gogh.  But it is also clearly the case that innovation is based on a number of tools and processes which can be learned, and is enabled through looking at a problem through a number of different perspectives, or imagining new perspectives, which is all that artists try to do.  Furthermore, everyone is creative.  Think back to your childhood when a cardboard box was a rocketship and a stick was a sword.  We are all creative, we simply allow corporate cultures and society's expectations to force our creativity into hiding.  One of the most instructive training activities we do at OVO is a prototyping exercise in which we ask our participants to prototype and defend to others an idea using nothing more than pipe cleaners, Play-Do, paper, crayons and found objects.  You'd be amazed at the creativity demonstrated when people know they'll be evaluated on their creativity!

So, the title of this post is really a set-up.  Innovation is a science with rules, processes and established tools that requires the participant to think like an artist.  The thinking requires new perspectives and the ability to imagine something new.  Therefore, innovation combines the tools and methods of both scientists and artists, but all of those skills can be learned.  If your organization wants or needs innovation to compete successfully, perhaps your team should start by examining the staff and its proclivities.  Most organizations are full of people who are steeped in orderly process and science, and they need the perspectives and imagination an artist can introduce.  Others have never been introduced to the tools and techniques that innovation has to offer, and need to learn those skills.  Simply starting an innovation effort with no training is almost certainly doomed to failure.
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posted by Jeffrey Phillips at 7:20 AM 2 comments

Tuesday, March 09, 2010

Innovation and the Future

It would seem logical that innovators would be concerned about the future, given that spotting new opportunities or markets before your competitors would provide an innovation advantage.  However I am constantly surprised by how little investigation there is in many firms about the future and the likely scenarios and outcomes.  I have to admit I'm a bit flummoxed by this lack of focus on the future.  Whether your firm is an innovator, or a fast follower, or is simply trying to get by, understanding the likely future provides insights that can make your firm more profitable and more competitive.

I guess there are at least four responses I get when we talk to firms about understanding the future.  They are, in increasing order of involvement and understanding:

  1. We'll simply wait for it to unfold.  The future is too complex and arbitrary and we'd rather react to real opportunities as they are validated than risk creating new products or services that may not unfold.
  2. We try to understand the future but we don't do much beyond extending our present day offerings and competitors.  We assume the future looks a lot like the present, and we plan for it in that way.
  3. We try to understand the future by examining trends and creating scenarios.  We aren't sure which scenarios are right, but we gain insights by constantly shifting the future trends.
  4. We try to dictate the future by creating new products that disrupt other markets.  Rather than understand trends, we try to create trends that shift the future to our favor.
I've witnessed all four strategies at play in different firms, even firms I'd consider innovative.  The majority of the firms I interact with usually practice strategy two - they forecast the future but it looks a lot like today.  They don't account for disruptions or sudden changes or new entrants, and are usually surprised by things they didn't think about or expect.  Many of these firms are starting to look at trend spotting and scenario planning as a worthwhile exercise.

That is a happy medium between doing little to nothing, and becoming the trend setter.  The fourth strategy is simply too daunting and risky for many firms, so the only option left is to start developing scenarios about alternative futures.  I like to call this the "low hanging fruit" of innovation.

It's low hanging fruit because much of the data you need to collect is readily available.  You don't have to be a CIA agent to gather intelligence about the future.  The government will tell you its plans.  There are a number of economists who will make predictions about the future.  It's possible your organization has a chief economist or purchases reports and analysis from an econometric firm.  You can get a lot of demographic and societal trends from a range of online sources, such as www.trendwatching.com or www.psfk.com.  Then you simply have to have the stamina to make sense of the trends by aggregating them and creating scenarios.  The data is out there. Now you simply have to have the right methodologies to assess the information and build credible scenarios.

A scenario is simply a story we tell ourselves about one alternative future.  The scenario is based on amplifying a selected set of trends and projecting those trends into a 5 to 10 year future.  Then we can create a story about that economy and its opportunities, challenges and problems, and then understand the implications for our business if the future unfolds in this manner.  Note that no one scenario will accurately predict the future, you should create several scenarios that emphasize different trends in different ways.

This effort doesn't require a lot of work, other than imagination, and can help you spot new opportunities, new markets or new threats to your existing business.  Given that the few things we know about the future are that it is more complex, approaching faster than ever, more global with fewer barriers, understanding something, anything about the future and acting on it now can only convey an advantage.

If you need help building a trend spotting and scenario planning model, contact OVO.  We can help.  If you'd like to read more about scenario planning, check out The Art of the Long View.  It is one of the best books on scenario planning and is a very easy to read book as well.
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posted by Jeffrey Phillips at 8:50 AM 2 comments

Monday, March 08, 2010

Learning innovation skills and best practices

There's a difference between knowing "about" innovation and having experience doing innovation.  Just as I don't compare myself to Lance Armstrong although we both ride bikes, there are skills and knowledge that are manifest in people who lead effective innovation programs that may not always be manifest in your organization.  These skills can be learned through training and through careful exercise within your organization, but it is dangerous to presume that people who have an interest in innovation possess the skills and best practices to carry out innovation efforts.  This was brought home to me in a meeting I attended recently.

I was at a meeting with a number of other people interested in innovation, and we were asked to brainstorm to help solve a particular problem.  A person who is an "innovation" leader in his company was asked to facilitate the brainstorming session.  An executive from the firm who was facing the problem gave a brief presentation on their challenge and needs, and then the facilitator asked for ideas.

The meeting quickly disintegrated because the challenge we were addressing was too large and poorly defined, and the timeframe too small.  While the challenge had been presented by the firm's CEO, it was unclear whether we were supposed to provide incremental or disruptive ideas, or merely validate a course the CEO identified in his presentation.  Additionally, no one had done a good job setting a scope - what to include in your thinking or what to leave out for the purposes of this session.  At one point one participant suggested that we couldn't generate ideas until we'd evaluated all the health care systems in all the major economic powers in the world.  Unfortunately we only had two hours.

So, we got off to a rocky start because the problem was poorly framed (not the facilitator's fault) and really had far too many interlocking and interchangeable parts (again, not his fault).  Also, we did not have a good understanding or framing of the scope - perhaps his fault, perhaps that of the sponsor. Even when the participants tried to extend the scope, the facilitator did not try to reframe the question.  Next, one participant, clearly a "Clarifier" from the Foursight model, kept asking clarifying questions rather than submitting ideas.  Being able to recognize a clarifier, and understand their needs, would have been helpful, but the facilitator also had failed to establish the rules of engagement.  Once we entered brainstorming, we should have been focused on generating ideas instead of asking questions.  Without a commonly held set of beliefs and rules, each person was participating in the session with their personal beliefs and rules.  Since we didn't set out a scope or an expected process or set of rules, there was no orderly process for generating ideas.

To give credit where it is due, the facilitator did "take off" his facilitator hat and contribute ideas, so he nimbly stepped into and out of the facilitator role, and did a good job capturing ideas.  This, though, in my mind was another signal that best practices weren't being followed.  It was clearly a struggle to write down ideas and to manage the group simultaneously.  Ideally we would have had a facilitator and a "scribe" to document the ideas.

This session led me to believe that many people conducting "idea generation" sessions in corporate America are doing more damage than good.  If this example is indicative of what happens everyday in most organizations, then idea generation and brainstorming deserves a negative rap - and many innovation leaders and teams need training on conducting and facilitating brainstorming and idea generation.

Here's what should have happened:

  1. Set the ground rules.  There are a consistent set of rules for brainstorming, including "encourage wild ideas", "Go for quantity not quality", "Don't judge while ideating" etc
  2. Clearly define the opportunity or challenge.  Make the issue smaller or simpler if necessary.
  3. Define the scope - what should be considered and what should be ignored.  We should have placed "all health care systems in the world" out of bounds from the start.
  4. Allow people to ask clarifying questions before we start brainstorming.  Once we start generating ideas, limit the questions, which often change scope.
  5. Pick a scribe to capture ideas so the facilitator doesn't have to write down ideas and manage the group
  6. Encourage the reticent and moderate the talkers.  Any group, and ours was no exception, has people who are happy to toss ideas out all day long, and those who won't speak at all.  We need to hear from everyone, and perhaps a bit less from some people (me included).
  7. Keep the team on task and on target.  When the "evaluate all health care systems in the world" statement was made, we should have been reminded that that was out of bounds, and we needed to refocus on what we could solve.
  8. Stretch the group when necessary.  The facilitator can/should occasionally ask questions that shift the group's thinking or introduces a new perspective.

These ideation rules and best practices are documented in a set of slides OVO has posted here:   There are a number of good books written on this subject as well, probably the best is Think Better by Tim Hurson.

These skills aren't innate and must be learned and reinforced.  My concern is that people who work on innovation activities may be leading events but may not be fully trained or may not have all the skills and capabilities necessary to be very effective.  And effectiveness in this context matters, since we were trying to solve big problems very quickly with a heterogeneous group. Only good methods and good facilitation was going to get it done well.

If your organization is trying to generate new ideas internally and desires to be guided by internal staff (which we think is a good thing), invest in some training to ensure the innovation leaders understand their roles and best practices.  

Innovation is too important to leave to chance.  If it is important to your organization, train your team to be effective idea facilitators!
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posted by Jeffrey Phillips at 5:11 AM 13 comments

Friday, March 05, 2010

Carolinas Innovation Conference April 10th

For those of you interested in innovation, and who love to learn more and to network with fellow innovators, we have a great program for you.  The Carolinas PDMA chapter is hosting a one day innovation event with the University of North Carolina's Kenan-Flagler business school on April 10th.  This event will highlight a number of innovation activities and firms in North and South Carolina, but anyone interested should plan to attend, in person or virtually.

You can learn more by clicking on the Innovate Carolina website.  We have an incredible list of speakers from firms like Michelin, Bank of America, Lord Corporation, RJ Reynolds, Primo Water, Center for Creative Leadership, UNC, the Governor's Council on Innovation, MeadWestVaco, and many, many more, including yours truly.

If you are interested and can come, please come.  If you are interested but can't come, much of the presentation will be simulcast through a web seminar over LiveMeeting.  If you are interested but aren't available, alert others that you think might be interested.  Let's make North Carolina the center for innovation.
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posted by Jeffrey Phillips at 12:17 PM 1 comments

Tuesday, March 02, 2010

Can you "can" innovation?

In one of the most poorly worded but insightful statements I've seen in quite a while, the CEO of 3M was recently recorded as saying

Everybody wants to find out how to can creativity. You can't. Creativity comes from freedom, not control. We let all the people in the R&D community spend 15% of their time researching whatever they like

As we've discussed here before, there are a number of things you can do to make innovation more process-driven, understandable and predictable.  But there are also portions of the process that are simply based on insights, creativity, connecting seemingly different concepts and just pure accidental insight that can't be dictated or managed.  He's right, a firm can't "can" creativity, but can create the space for creativity to happen.  This is the difference between "managing" innovation and "managing for innovation".

Firms that attempt to "manage" innovation or creativity create very specific goals and treat the entire activity as if it can be a well-planned event.  Tuesdays, we have sudden flashes of insight.  Wednesdays, we ideate.  Thursdays, we prototype.  If only it were that simple.  No, just as the rest of his quote implies, we need to create the space and opportunity for insights and creativity to happen, then provide a mechanism to move those insights quickly through an innovation process.

Creativity comes from "freedom not control".  Absolutely.  You can see that in almost any activity in human endeavor, whether the focus is on governments - not much creativity and innovation in, say, Myanmar, for example as compared to Finland, or new product development.  The more control we place on creativity, the more we try to contain it, direct it and place it in a box, the less creativity we get.

What this means for most firms that seek innovation is that we have to be tolerant of the aspects of life that promote creativity.  This means we need to create opportunities for our teams to have different experiences - to interact with customers or to become a customer.  To try to eliminate our product entirely, or as the article suggests, find ways to quadruple production or make the product at one-tenth its cost.  We need to promote interaction with academics and business partners.  We need to encourage networking and the combination of products and services with our own that most people within the firm would reject.

In other words, creativity and insights are more likely to happen in situations that are exactly the opposite of what most businesses reinforce and expect.  And then they wonder why it is so hard to generate really interesting new ideas.

Yes, there's a risk with all this new freedom.  Some people will take advantage of the freedom and use the time to goof off, rather than put the time to creating connections and networks.  On the other hand, many people will blossom with this freedom and create new concepts that become new products and services.  If your systems and management is too rigid, finding people who will follow orders and execute efficiently won't be a problem, but innovating will be.  Striking the right balance between executional excellence and creative freedom is vitally important for successful innovators.
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posted by Jeffrey Phillips at 5:54 AM 2 comments

Monday, March 01, 2010

Selling innovation to your boss

I've argued before that most firms innovate when faced one of two conditions:  fear or greed.  The fear factor indicates the firm has explored all other options, and now only the most "radical" option - innovation - remains.  To paraphrase Sherlock Holmes, "when you've eliminated the possible, whatever remains, no matter how improbable, must be the answer".  And, like Gordon Gecko from Wall Street, I believe many firms innovate when they believe they've spotted an emerging opportunity or new market.  In this case, greed is good.

But if all innovation were based on these two drivers, then little innovation would get done.  Clearly many firms latch onto innovation as a life preserver, a last ditch effort rather than a strategic focus, but there's more innovation underway than could be accounted for by desperation.  And I'm relatively certain that while some firms are good at spotting innovation opportunities and moving aggressively to produce new products and services, they are fairly few and far between.  That leaves us with the majority of innovation getting done by the firms in the hazy middle - not really desperate, but not really leading innovators either.  If that's the case, what methods do they use to "sell" innovation to the appropriate decisioning individuals or bodies?

Innovation can be "sold" to executives in one of several methods:
  1. As a method to increase organic growth, driving new profits
  2. As a method to disrupt the existing market or adjacent markets, preempting a competitor
  3. As a method to create significant differentiation within a market space
  4. As a method to create product or service leadership
These are the hard-headed, rational reasons, and the reasons that organizations tell themselves they innovate.  in reality, most firms take on innovation efforts because:

  1. An employee created a great idea and we really have no choice but to exploit it
  2. A competitor has launched a new (product, initiative, campaign) and we need to respond to it
  3. A senior leader within the firm has made it his/her mission to create an innovation program and the squeaky wheel must be greased
We often find that innovation programs are formed around existing assets - people or ideas - that persist until they must be addressed.  Sort of like a plant that must be weeded out or watered.  Otherwise, most new innovation efforts are based on a response to what a competitor is doing.  This "reactive" innovation is not, in our minds, the best way to innovate, but it may be the best way to sell an innovation program, to give your initiative the final "kickstart" needed to get the funding or resources you need.

Thus, to "sell" innovation you need to:
  1. Link it to a corporate objective (growth, differentiation, disruption) 
  2. Build ideas and momentum under the covers
  3. Demonstrate what your competitors and new market entrants are doing
  4. Link all three together (strategy, existing momentum, competitive threats) to complete the package
Without all three "legs" of the stool, you'll struggle to gain credibility.  Without a strategic linkage any innovation will be incremental point solutions.  Without some existing momentum, the work will seem too overwhelming.  Without the ability to demonstrate what competitors are doing, you rely on executives who place great emphasis on longer term strategic goals.
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posted by Jeffrey Phillips at 5:46 AM 47 comments