Monday, January 31, 2011

Adoption barriers and other reasons innovative ideas fail

Frankly, I'd rather write about success than failure, especially in an innovation setting.  But since it's true that success has many fathers and failure is an orphan, someone needs to tell its story.

We've all heard the mantra (and I've used it many times) that innovation will require some failure.  In this regard what we are talking about primarily is fast experimentation, prototyping and piloting, which leads to new insights.  What we don't mean is consistent failure in the marketplace, which is simply a recipe for disaster.  But what is also interesting is to begin to decipher why "innovations" failed, and what innovators can learn from those mistakes.

We believe that innovations fail in the marketplace based on one or more of four key issues: 

  1. Ideas don't solve an important problem for a customer
  2. Ideas take too long to get to market/Shifts in needs
  3. Ideas underfunded or poorly launched
  4. Ideas require too much work to adopt
Let's address the first three briefly, and look at the fourth one in more depth.

Ideas don't solve an important and relevant problem

Many innovators assume that they understand what customers and prospects want and need, rather than doing the research to understand what customers want and need.  We call this "inside-out" innovation and most firms are guilty of it.  Their innovators and product managers think they understand customer needs based on some market research and company history and don't engage customers to truly understand unmet or unarticulated needs.  When the products or services are launched, there are few buyers and the ideas seem uninteresting.  That's because the needs were formed based on misunderstanding or a lack of interaction to discover what customers want.

Solution: Use scenario planning and qualitative research like Voice of the Customer or Ethnography to gain more insights!

Ideas take too long to get to market or needs shift

Since many organizations don't have a well-tuned innovation process, even when firms identify the right needs it may take years for a new product to get to market, completely missing a market window.  Or a firm may have decision cycles (annual planning, anyone?) that slows the development and restricts funding of new ideas.  So a great ideas languishes in product development limbo and when it is finally released it has missed the market window or needs have shifted.

Solution:  define a funding mechanism to sponsor ideas that occur out of sequence with annual planning cycles, and develop a well-tuned innovation process to convert ideas to new products and services.

Ideas are poorly launched

No matter how well you conceive the idea and how well it's developed, if the new product or service isn't launched effectively, considering its place in the ecosystem and the PR and marketing necessary to get the word out, it won't be successful.  Built it and they will come is a fool's errand.  Even the best ideas must be effectively marketed and promoted, yet far too often good ideas are barely marketed at all.  Contrast this with Apple's approach to revealing new products - the CEO presents the new product as if it were the second coming.  If your company has a great new innovative product or service, understand how to launch it, or be prepared for disappointment.

Solution:  Perhaps we can't all do the "reveal" like Steve Jobs, but we can place more emphasis on building excitement for the launch of a new product or service.

Understand the adoption cycle or barriers

Innovators see the value of their ideas innately, and can't imagine why anyone would not immediately switch allegiances to their product or service.  Customers, on the other hand, are the ones who make determinations about how difficult the transition from one product or service will be.  Far too frequently, consumers remain wedded to products and services that offer them less convenience and less value than other offerings in the market, because the effort to change appears too high.  Frankly, this issue is probably the biggest challenge to new innovative products and services.  Understanding the adoption issues and addressing them in the product and in the launch can make all the difference.

Inertia suggests that bodies at rest tend to stay at rest, and customers with existing relationships and patterns tend to retain those patterns.  If your innovation seeks to disrupt existing patterns and actions, it had better offer tremendous benefits and a bridge to port information between the existing platform and your new platform.  Otherwise, few customer may make the leap, even for a significant change in value.  The adoption effort is not a barrier to be taken lightly.  It is, in fact, one of the biggest barriers for new innovative ideas to overcome. And, because innovators fall in love with their ideas and fail to see the barriers, adoption barriers often receive the least consideration.

Solution:  Understand the entire value proposition of the products or offerings you are trying to displace or disrupt.  Help the prospect bridge between their existing platforms and standards and your new innovative product, or you may find that inertia overcomes innovation.  Define a clear, simple path for people to follow as they leave behind their existing patterns and platforms so adoption is simple.

So here we finish, with another Covey principle:  start with the end in mind.  If your solution solves a problem that real customers have, great, your chances of an innovation success are increased.  If your solution is easily adopted by your target customers, based on their needs and understanding of the adoption issues and not yours, then you have a winner.
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posted by Jeffrey Phillips at 5:50 AM 3 comments

Tuesday, January 25, 2011

Is America losing its innovation edge?

Last week, Norm Augustine wrote an article for Forbes entitled Danger:  America is losing its edge in innovation. 

In the article Augustine cites a number of factors, such as the often Tweeted fact that US consumers spend more on potato chips than the government does in Energy Research and Development.  He also points to the fact that science and engineering are underrepresented in the US student body and that more and more patents are being awarded to entities outside the US.  This is all true, and should be warning signs for our economy.  While he's right, we are losing the innovation edge, the factors he states are lagging indicators at best, or misleading at worst, from an innovation perspective.  There are several reasons why.

First, let's consider the throw-away line that consumers spend more on potato chips than the government does on Energy research and development.  What should a relevant measure be?  How much the average consumer spends on oranges or bananas?  This is a non-sequitur of the first order.  What people choose to spend their money on in a free economy has no relevance or meaning to what our government spends on research.  Also, let's consider the energy sector in this country.  Other than perhaps the nuclear industry, none of the major energy sources were the result of government R&D.  The government didn't sponsor the early Texas oilmen, or the coal industry.  Perhaps the government did assist with the development of hydroelectric in the form of the TVA, but many would argue that the regulations the government imposed slowed the growth of the industry.  While our government did spend a tremendous amount of money in research during the cold war, there are two distinct problems with that approach today.  First, the government is more involved in more areas of our economy than it was then, and has extended itself too far and can't afford significant research and development.  What's more, the government is creating both a crowding-out problem and a regulatory burden contributing to less and less R&D. When the government suggests that it must enter the pharmaceutical R&D space since the major pharma companies don't provide enough new medications at appropriate prices, that should send warning signals.

What the government should do is make the risk taking of entrepreneurs more rewarding and lower taxes and provide incentives for new firms to grow, and larger firms to innovate.  We need the government to do its bit where R&D is concerned, but given the budgetary pressures and the growth of the government in a range of other areas, and the lethargy in converting R&D into new products within the government, it is risky at best to assume that more government R&D is the answer.

Second, Augustine assumes that more science and technology education and training in the US will mean more innovation.  In the past, innovation was driven by technology, and to some extent that will be true in the future.  However, innovation is a much more robust solution than merely new patents or technologies.  Look no further than Apple to see that one doesn't have to be a technology leader to be an innovator - innovation is created by new technologies, but also new processes, new services, new business models and new customer experiences.  The sooner we expand our definition of innovation and move beyond the simplistic equation that science and technology = innovation, the better.  That's not to say that science and technology innovation is not valuable, just that we need a much bigger perspective.

Third, regardless of where the technology and engineering happens, we need to continue to keep our creativity energy flowing.  We in the US have a very special petri dish for innovation, based on free markets, no rank or caste system, liquid venture capital and other funding, good education and a risk taking culture.  There are few, if any countries in the world that have our collection of attributes or that can even hope to attain them in the short run.  We need to reinforce these attributes and benefits, not detract from them.  Where products are made becomes less important than how they are imagined and designed, and who owns the intellectual property.

Fourth, we've allowed ourselves to be made comfortable by the fact that Steve Jobs and other creative people are "out there" doing the interesting innovation work so we don't have to.  Most of us would far rather rely on a few insightful others to create interesting products rather than take on the role ourselves.  We've become consumers of ideas rather than creators of ideas, outsourcing even the creative act itself.  Most of us live in a gray area defined by Teddy Roosevelt as a place with cold and timid souls who never tasted victory or defeat.  Rather, to continue, we should "spend ourselves in a worthy cause...best knowing in the end the triumph of high achievement and at worst, if we fail, at least we failed daring greatly."  That's a paraphrase, of course, but rather than living lives of quiet desperation, we need more people to live dangerously, with big ideas and big dreams.  We need to stop waiting for the government, a large enterprise, some nameless bureaucracy or some other agency to innovate, to create new things and do it ourselves.  Few great innovations spring from established bureaucracies - they have too much to lose.  Innovation is by its nature disruptive to established hierarchies, and thus is more likely to take root and succeed in smaller organizations and in individuals.

Finally, we've become accustomed to being told we are now behind.  Every day the news tells us that China will soon be the largest economy in the world.  India graduates more engineers each year than we graduate university students in total.  And so on.  We've already lost, so like the English of the early 20th century we should lie back and think of England.  Well, sure, China will be the largest economy in the world in a few years, but over half its population lives in poverty.  The Chinese have no choice but to create 20 million new jobs a year, each year, just to sustain unemployment levels.  We're falling behind only to the extent that the BRIC countries and others are "catching up", which is a good thing for us (opens new markets for our products and ideas) and them (improves standards of living worldwide).  Rather than resign ourselves to being the "second class" citizens, how about we define ourselves on what we do better than anyone?

Since de Tocqueville recognized in the 1800s an American exceptionalism, this country has been a leader in new ideas and innovation.  We can continue that far into the future, by focusing on our strengths, keeping our markets free, encouraging ideas and tolerating risks, encouraging free capital movement and strong intellectual property protection.  We need to encourage smaller entrepreneurs, and can expect to see many new businesses as the economy improves.  We need leaders of larger businesses to take more risks and focus on long term opportunities rather than short term market objectives.  What's interesting is that while larger enterprises become more risk averse and less innovative, the economic recovery will drive more innovation, if for no other reason than millions of unemployed people who seek new jobs will create their own, freed from the constraints of large corporations they'll unleash a lot of innovation completely outside any government program.  History demonstrates that in the aftermath of every significant downturn a flowering of innovation is created.  So in some regards Schumpeter's creative destruction is at work, destroying jobs and industries and laying the foundation for new ones.


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posted by Jeffrey Phillips at 6:56 PM 3 comments

Monday, January 24, 2011

Clinging to the tools

It's reached the point where I've lost track of all the innovation tools available.  It seems that every week I stumble across another innovation tool, method or technique.  Much to my chagrin, since an innovation consultant should know most, if not all, of the possible permutations and combinations of tools and techniques in his chosen field.

I mean, after all, there's TRIZ and SIT and 'jobs to be done' and "open" innovation and ethnography and scenario planning and.. well the list keeps going and going.  Recently I found a website that lists over 40 different methods for idea generation.  At some point we've gone well past the bandwagon stage, that stage where everyone jumps on the program with momentum, and we've entered the baffle them with tools stage, where everyone has a new tool, technique or approach.

What happens when any initiative or movement reaches the tools, tools, tools stage is that people who need answers begin to invest too much in any tool or technique.  If it becomes apparent that Apple, for example, has been using "open" innovation, then every CEO will demand that his or her firm copy Apple and use open innovation.  If it becomes apparent that your competition has leveraged ethnography and has innovated successfully, then your team will inevitably have to deploy some ethnography.  The fixation with methods and tools is understandable, but it begins to cloud the issue.  The real issue is that tools are merely implements to help you accelerate your strategies and tasks.  What we need is a decision process to decide which tools and methods will help achieve the task, and to ensure we are choosing the "right" tool for the job.

I've seen clients demand to use tools simply because a competitor has successfully used the tools.  What the clients fail to realize is that a lot of strategy definition, planning and consideration went into the use of the tool, and it was chosen because it was the right tool for the job for that client and their needs.  All of the tools I've mentioned are valid and appropriate in the right context, and by speaking of context, we are getting to the heart of the problem.

Too often, individuals, teams and firms become enamored with a specific tool or method.  That may be because they read about it in a new innovation book, saw a leading consultant discuss its use or know that the tool was used successfully somewhere else.  What needs to happen before any firm becomes enamored of tools and methods is a careful consideration of the opportunity or problem to solve, the strategic context in which innovation is important, and an evaluation of tools and techniques that can provide value.

What's also important is to understand the implications of the choice of an innovation tool.  Ethnography, for example, is often difficult for firms to use effectively because it produces qualitative insight based on a small sample size.  That means that the results must be interpreted and extrapolated, and aren't statistically significant.  Does your team understand the use of the tool they've fallen in love with, and what the constraints, limitations and implications are?

Tools and techniques are important to innovation, just as they are to Six Sigma or other business methods or processes.  But many of these tools have specific needs and value propositions that your team must understand in order to use them effectively.  What's more important, in fact, is to frame the problem or opportunity effectively, and then select the tools in context of the problem, fully aware of both the strengths and limitations of any tools that you choose to use.

In an innovation setting, strategy and context are far more important than tools, and well-led people working within the strategy and context are more important than tools or strategy.
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posted by Jeffrey Phillips at 5:58 AM 6 comments

Tuesday, January 18, 2011

Innovate and "they" will come

I know I'm late responding to this ad by Accenture, but I saw it today in the airport and it made me smile.  Why?  Because it is so "Field of Dreams".  There are so many assertions that are wrong with the statement that one hardly knows where to begin.

First, innovation should be pursued in context of user needs.  Inside-out innovation driven by products or technologies is rarely successful.  Any one of us can point at many products that were built with the hopes that they met customer needs, and market plans that projected hockey stick adoption curves.  But innovation doesn't happen well in a vacuum.

Second, who is this "they" the article asserts will come?  The market at large?  Your existing customers?  New prospects?  People you didn't want as customers?  Innovation should solve specific problems felt by people or prospects that are important to your firm.  Innovating for "everyone" is rarely successful.  Identify some market or segment needs, validate them with real customers from those segments, and you may have a winner.

Third, the idea that innovation is simple or easy.  Beyond asserting that you'll innovate for unknown customers is the fact that it is exceptionally difficult in most firms to merely get approval to innovate.  Where's the discourse on the work involved before one gets to innovate?  Innovation is exciting work but threatens the status quo in a business, and pulls funds and resources from existing products and services.  You don't get to innovate until you've proven a market need exists, and even then there are many hurdles.

This kind of advertising leads many to accuse the innovation community (and sometimes rightly so) of being less than honest about the work involved and what's required to innovate successfully.  The Field of Dreams approach may work for Hollywood movies, but will never work in the real world.  We need to return to the notion that innovation is real work, with real value, not a Hollywood movie set that produces miracles with very little work.
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posted by Jeffrey Phillips at 8:49 AM 3 comments

Wednesday, January 12, 2011

Is Innovation an "unqualified" good?

I love blogging, and I love blog comments even more.  I get a chance to interact, at least from a short text perspective, with people who agree, and who disagree with my writing and points of view.  There's nothing better than a dispute or debate over ideas.

One of the comments on my recent post "Why innovation makes executives uncomfortable" asserted that I have a bias that innovation is an unqualified good.  That statement, and the issues that arise with it, are worth more than a blog post, but that's all I'll have time for today.

The key question is:  Is innovation an unqualified good, and do we innovation consultants have a bias that leads us to think all innovation is "good"?  Let's unpack, shall we?

First, I believe in Schumpeter, who defined capitalism as creative destruction.  Moreso, I think innovation itself is creative destruction, which means that for every really interesting, disruptive idea, there are winners and losers.  Instead of ignoring Apple, as the commenter suggested, let's use iTunes as an example.  iTunes is clearly and innovation, good for many people who wanted to share and manage music effectively.  It was also good for Apple and Apple shareholders.  The other side of that equation, since matter can be neither created nor destroyed, is that someone probably lost.  Those "someones" were Tower Records and other music distributors.  Those firms that were in the business of distributing music on physical media have been hurt by the creative destruction of iTunes.  So, while a rising tide may raise all boats, innovation isn't always an unqualified good.  Someone's ox will be gored.

The real question is why Tower and others refused to see a growing demand for managing music as digital content.  It's entirely possible that the music publishers or distributors could have developed a music sharing platform that would have solidified their position, and made the iPod an interesting MP-3 player rather than the center of music distribution.  However, nothing is more inevitable than a good idea whose time has come.  Tower chose to double down on traditional music distribution while their consumer base was shifting its desires and preferences.  Whether iTunes, Napster, Pandora or some other music management system was the winner, music distribution was going to change.

So, innovation is typically an unqualified good when you are creating the disruption, but it may not look so inviting when the comfortable market you've developed is disrupted from underneath you.  There are winners and losers in innovation, just as there are in life.

So, innovation isn't necessarily an unqualified good, although there are other examples where innovation brings social benefits that didn't exist.  For example, new ways to clean water for drinking or new mosquito nets to reduce malaria.  But even in these situations the innovation replaces some previous method for cleaning water or reducing malaria.  Creative destruction again.

So, let's turn to the second assertion - innovation consultants always promote innovation to their clients.  That's probably true, for several reasons.  First, as an innovation consultant, it's how I make my living.  I'd like to think that I try my best to work with firms that need innovation, and I have turned down work that was merely window dressing or poorly defined.  Second, what's the alternative?  Remaining stuck in the status quo is a recipe for slow death.  If your firm doesn't innovate - create new products, services, business models or processes - it will slowly wither away, and other firms will innovate.  The Luddites in the 17th century tried to stop the mechanization of the weaving industry.  Perhaps our lives would have been better without mass production, but many mill owners had a choice, and chose to bring more and more technology into the mills.  We can't stop progress, and we can't govern the rate of change.  We can either choose to participate - intelligently - or we can wait for others to do so.

Let's not assume that innovation consultants or innovators are Pollyannish, if that's a word.  We recognize that innovation is difficult work, but we hope it achieves a real benefit for our customers.  We also recognize that if there are "winners" in an innovation game, there are also "losers" - the products, services and markets that are being replaced.  However, innovation is agnostic - anyone who chooses to can innovate.  It's not a tool for the rich, or the well-connected, and many of the people we hold up as innovators started with little - H-P for example, or Apple, or tried and failed several times before becoming successful.
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posted by Jeffrey Phillips at 10:40 AM 6 comments

Monday, January 10, 2011

Creating an Innovation Community at U.S. Bank

One of the most pervasive myths about innovation is that it happens to isolated individuals who have a spark of creativity.  The story unfolds that through trial and tribulation, the lonely innovator overcomes obstacles and eventually creates a compelling new product.   While that story is entertaining, it is for the most part a fairy tale.   Most experienced innovators can tell you that that kind of innovation is the exception rather than the rule.

Good innovation requires the engagement and participation of a fair number of people, who fill a wide range of tasks.  From spotting trends and investigating customer needs to generating and evaluating ideas to prototyping and piloting ideas, there are many different roles and perspectives that are necessary.  More importantly, good ideas often originate at the intersection of a variety of industries, markets or perspectives, so a thriving innovation community strengthens and reinforces all facets of innovation.

The word “community” is unfortunately often misused, but in this context – an innovation community – the word is exceptionally accurate.  An innovation community is simply a group of people who are interconnected and who can freely collaborate, to share ideas, perspectives and concepts.    Just as tools like Facebook and LinkedIn enable social communities, innovators need physical and virtual communities to share ideas and information, exchange perspectives, identify trends and reinforce the goals of innovation.  This is especially true in large, distributed organizations where innovators may be isolated from one another due to business lines, geographies or business function.  Too often good ideas languish because people who have them can’t connect with people who need them – even in the same firm. 

In far too many organizations, innovation teams work in small, isolated pockets, rarely interacting with their peers, much less other teams within the organization.  We believe this is a terrible mistake.  The exchange of ideas drives new engagement and reminds each individual in the community that they are part of an important, greater “whole”.  We humans weren’t made to live as hermits in isolation, and our innovation teams can only gain insights and skills as they network with other individuals and teams.

To that end I’m happy to write about one example of a firm using communities to further innovation goals.  Our client, U.S. Bank, has worked diligently over the last two years to improve their innovation skills by training many innovation “advocates” throughout the business and developing innovation teams across many business functions.  But more importantly, they are beginning to link these individuals into an innovation community that allows them to meet virtually, share ideas and needs, and extend their networks.  This innovation community is based on an IBM product called Connections.  The idea behind this community is to collapse the “social distance” between individual innovators across the organization and encourage interactions and collaboration.

The application is called US Book, and it looks and feels much like Facebook.  US Book has been rolled out to all 60,000+ employees of U.S. Bank.  Within US Book is an innovation community open to any innovation advocates or anyone interested in innovation.  Think of it as U.S. Bank’s  Facebook for innovators.  The application allows an individual to “tweet” about his or her actions and ideas, and for others to search for people with specific skills or knowledge.  Within the community the users can define interest groups – for example, people who are interested or active in trend spotting, scenario planning or other innovation techniques or capabilities.  Additionally, people can tag themselves and associate with others in a specific business offering (checking or savings for example), or market segment or geography.  These functions allow people within the community to find people who share a common interest or who have specific skills, and exchange ideas and collaborate far more effectively.

Within U.S. Bank a group called the Enterprise Revenue Office is actively seeding innovation programs, including innovation training for the innovation advocates, and developing innovation platforms like US Book and the innovation community.  The interaction within the community is already vibrant, and the community promises to spark many more ideas and simplify engagement across the bank.  I’ll plan another update on the progress of the innovation community in a few months to give you a sense of the outcomes and results from the community and how it is growing and changing over time. 

What’s your firm doing to sponsor innovation communities – not just innovators, or innovation teams?  Innovation is a difficult, risky proposition.  Demonstrating that there are other people who are engaged and interested in innovation, and who are willing to be part of an innovation community, reduces the risk, reduces the uncertainty and encourages better idea generation and more importantly, collaboration.
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posted by Jeffrey Phillips at 5:13 AM 3 comments

Tuesday, January 04, 2011

Why innovation makes executives uncomfortable

I've been working in the "innovation field" for over seven years as a consultant, and I did regular "innovation" work for a number of years previously, so it is with a bit of chagrin that I come clean on the fact that it finally occurred to me why innovation makes many executives uncomfortable.  I think if you are constantly reinforcing a belief system (innovation is good!) that it can be very hard to get a different perspective, and even understand why that other perspective exists.  So for years I have labored under the assumption that others saw innovation as a valuable capability and commodity, just as I did. 

Over the last few months I've been disabused of that notion, by working with executives and others who helped me understand why innovation makes them uncomfortable.  And let me say my conclusions about why innovation makes executives uncomfortable surprised me a bit as well.

I've struggled with this, because I'd like to create a nice, neat taxonomy about the barriers for innovation.  So far I have three categories or typologies, but as you read this, feel free to contribute your own in the comments section.  I'd be interested to hear what you think.  Recognizing there are several different kinds of reasons that innovation makes executives uncomfortable may help you become better at answering their questions and resolving the constraints on innovation in your business.

The first typology is based on the belief that innovation requires skills that the business doesn't have or reinforce.  On the surface, this may seem obvious.  Innovation seems to be about incredible breakthroughs in research, or insightful observations about customer needs and wants in the future.  But when you really break it down, innovation requires a different set of skills from those we inculcated in our organizations.  Here's a simple dicotomy:

Innovation requires  ART  not SCIENCE
Innovation requires QUALITATIVE insights not QUANTITATIVE statistics
Innovation requires HUNCHES not FACTS
Innovation requires RISKS not CERTAINTIES

In other words, we already have all the skills we need in order to innovate, we just don't emphasize or rewards those skills.  Innovation is still much more of a craft than a science, more artisan than automaton.

However, many of our executives were bred in the scientific management school of thought, which requires breaking down actions and phases of work into minute detail and describing and optimizing the action.  As Brownian motion fans can attest, you can be certain of the location, or speed, of a particle, but not both.  The same is true of these innovation skills - they are important, but can't be scientifically managed.

The analogy would be a kindergarten taught by quant jocks.  The kids wouldn't have any fun, being forced into doing very specific and rigid tasks, and the quant jocks wouldn't like the freeform play and idea creation of the kids.

The second typology is based on the fact that innovation is fairly unpredictable.  This is increasingly true as the amount of disruption possibility increases.  Again, we have executives who have been taught to believe, and their compensation reinforces, that businesses are organizations which produce regular, steady outcomes in the face of any environmental uncertainty or economic chaos.  Innovation doesn't work to our clocks or schedules, ideas and needs arise as customers preferences and situations change.  Few executives are interested in the change inherent in really disruptive ideas, even if they have a substantial increase to the top or bottom line, because of the amount of change those ideas may introduce, and the ancillary effects of those changes.  Most executives would happily trade regular, consistent growth in the low single digits to wild swings in growth based on occasional disruptive ideas.

The analogy in this instance is to a baseball player.  Most managers would prefer a hitter with a .300 batting average who hits singles and doubles, over a .275 hitter who hits homers or strikes out.



The third typology is based on the fact that innovation ultimately places someone else in control.  Many senior executives kid themselves that they are responsible for the success of their businesses.  We are guilty of admiring people who make the cover of Fortune or Forbes, only in hindsight to wonder what we were thinking.  Anyone remember Chainsaw Al for example?  It is their insight, strategies and leadership that makes all the difference.  In a fast paced, ever changing world, executives who create a vision and then engage the best in their people will be successful, but they must abdicate some of the decisions to those people.  Innovation is rarely the provenance of one individual.  Apple is probably the exception that proves the rule that most organizations have tens, if not hundreds of individuals actively involved in innovation.  Yet the more innovation that happens in an organization, the less control the CEO has about products, and strategy, and direction.  Unless, again like Apple, everyone understands with great clarity the strategy and goals and direction, and innovation is completely governed by that vision.  Since most organizations lack that central clarity, innovation becomes rapidly dispersed throughout the organization, and the senior executives have little control.  Therefore innovation is tightly controlled if allowed at all, since too much innovation may mean the loss of control.

So, to recap, I've found that innovation makes executives uncomfortable for at least three reasons:
  1. A different set of skills are required than are supported or reinforced
  2. Executives prefer humdrum predictability to wild swings in revenue and profits
  3. The more innovation, the more likely the executive team is to lose control of the business
Now, note that I didn't incorporate some of the "easy" reasons why innovation makes executives uncomfortable, like:
  1. Innovation costs money
  2. Innovation takes resources
Those two arguments are specious at best.  Every new product, new acquisition, new initiative requires money and resources, so at the heart of the matter, these aren't arguments against innovation.  There's something more relevant under the surface when these arguments are used.

Additionally, I didn't use one I know to be true:  in this environment, there's much more to be gained in cost cutting and right sizing than in innovation, since cost cutting has an almost immediate return to the bottom line, whereas innovation has at best a possible return down the road.

The reason I didn't include that alternative is that while it is true, it can only be true for so long.  A firm that cuts 5% of its cost base every year will shrink to nothing in less than 15 years.  Eventually, every firm needs new product, services and offerings to grow.  So this is only a temporary reason not to innovate.

So, that's my typology.  I'd be interested in your thoughts.  Also note that once you can get past the "we don't have enough time" or "we don't have enough money" arguments, understanding which of the other reasons actually block innovation will give you an opportunity to create evidence to reduce the concerns for each of the three typologies, which you'll have to produce in order to innovate.
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posted by Jeffrey Phillips at 1:47 PM 27 comments

Monday, January 03, 2011

Innovation Roles: The Bulldozer

In my continuing list of roles that any innovator must play, we come to the role that may be the most important role of all.  Certainly we've seen how innovators must play a number of roles, including the Matador, the Futurist and the Jester.  These roles have much to do with defining the opportunities and achieving initial traction.  We've also examined the Tinkerer role, which has to do with developing and testing ideas once they are generated.  Today I want to talk about the role that links all of these and many others, the role I call the Bulldozer.

I suppose the label "Bulldozer" is somewhat politically incorrect, but nonetheless the label is often correct.  Innovation is the most difficult initiative to start, and one of the easiest to stop.  This truism means that an innovation leader must be able to create a great amount of momentum and inevitability about their project at the outset, and retain a great amount of buy-in and credibility throughout the project as well.  In fact I struggled over the label, considering and rejecting the label "Diplomat".  The challenge with Diplomats in an innovation setting is that constant negotiation without creating anything new is failure.  When a firm needs innovation to remain competitive, internal negotiations and diplomatic maneuvers are as helpful as debating the size and shape of the table at peace talks, for example, in the Korean War.

In any innovation project there will be hundreds of reasons to slow the project, to redirect the effort, to redeploy the people assigned.  The innovation leader must have a single, overriding focus - to accomplish the initial goals and completely as possible, and stiff-arm as many attempts as possible to detract the team from its mission.  These distractions will take the form of very reasonable requests, such as:

  • Reducing the size of the innovation team since the people are desperately needed to maintain existing products
  • Waiting until next (quarter, year, etc) to start the project
  • Reducing the scope of the innovation effort to become far more incremental
  • Shortening the timeframe of the innovation project to produce innovations "faster"
  • Attempting to redirect the team to new goals part-way through the effort
If you are an innovation leader, all of these sirens will call as your ship passes by.  You'll need the single minded focus of the bulldozer to deflect these "reasonable" requests to achieve interesting, valuable innovative results.  Everything about existing corporate culture will work to impede your progress, attaching themselves to your ship like barnacles and anchors.  As much as is humanly and culturally possible, you must reject these requests, always pointing back to your original goals, and you must keep up the momentum of your effort.  An innovation project delayed or deflected is an innovation project denied.

The best recommendation I can make for innovation leaders is to be a positive force for change, constantly referring back to an original "charter" or agreement about the scope and goals of the innovation project, and rejecting as much as possible the slings and arrows of the existing culture that will attempt to delay, distract and reduce your outcomes and goals.  These barriers are inevitable - the real question to ask is:  how prepared are you to deal with them, and do you understand the value of momentum in an innovation project?
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posted by Jeffrey Phillips at 5:48 AM 3 comments