Wednesday, March 30, 2016

There's very little luck in innovation

My good friend Paul Hobcraft wrote a nice piece recently about how corporations seem to experience innovation. He compared it to the game of snakes and ladders.  In this country (the US) we recognize it as chutes and ladders, a game that allows a player to progress quickly if they land on a ladder, and regress quickly if they land on a chute.  Paul notes that corporate innovation seems to reflect this experience, sometimes rapidly progressing, then just as rapidly relapsing.  He notes that the game, which he calls Snakes and Ladders, has no strategy. It's simply based on luck.  And to some extent he is making the claim, indirectly, that corporate innovation is not based on strategy, but on luck.

I'd like to take his claim, such as it is, and extend it by noting that many commentators describe luck as when preparation meets opportunity.  Seneca, a Roman philosopher, was the first to suggest that luck is simply the intersection of preparation and opportunity.  If we accept this somewhat trite but accepted definition, we can think a bit about what holds corporate innovation back.


If luck is made up of opportunity and preparation, we can first examine the idea of opportunity.

The question then becomes:  does every organization in a market understand and experience the same opportunity to innovate, and at the same time?  The simplistic answer is: yes.  New customer, market, business model and other opportunities are emerging all the time.  No individual firm has a claim to any emerging opportunity.  These opportunities are agnostic; they don't care who spots them and capitalizes on them.

This means then that opportunities are ubiquitous and available for those who spot them and act quickly to capitalize on them. This means that good innovators are firms that are paying attention to emerging opportunities.  If you aren't paying attention, if you aren't scanning for emerging opportunities you can only be a fast follower.  In the end, every firm has the same chance at spotting an opportunity, the only question is whether or not they are looking.


If luck is when preparation meets opportunity, then what is innovation luck?  Being prepared to act, with the appropriate skills and knowledge, when an innovation opportunity emerges.  This assumes that the firm can 1) spot an emerging opportunity and 2) act on the opportunity, which emphasizes preparation.

Preparation to many organizations looks like an investment that has a low potential for pay-off.  Why invest in skills and training for innovation opportunities that may not occur, when budgets and bandwidth is limited?  And, since innovation skills aren't regularly exercised, they often wither or dissipate when they are introduced and not used regularly.  Or they appear strange and unusual when introduced at the last moment, when an opportunity is spotted but the people are unprepared.

The Answer?

We believe the answer lies in a continuous evaluation process, constantly looking for emerging needs, emerging segments and emerging opportunities. Spotting these before others do provides the chance to steal a march on competition. This requires a regular scanning of the market and customers and competition, as well as a close examination of trends that will impact market dynamics.  Along with this scanning and analysis, a regular program of both incremental and disruptive innovation builds and sustains innovation skills, so that people and processes can execute quickly against a new opportunity.  Additional skills or competencies can be added "just in time" when a new opportunity is validated, building on existing skills and processes.

Sometimes, in rare occasions, a firm will find itself alone in the midst of an opportunity and will simply need to act to win.  Far more often, opportunities are emerging than any firm can respond to, and those with the best sensing capability and most preparation will be able to win.  There's another trite but true saying that applies here:  hope is not a strategy.  Rather than hope that you'll end up in a non-competitive but attractive opportunity, act to understand the future that provides innovation opportunities you can meet fully prepared.
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posted by Jeffrey Phillips at 8:46 AM


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