Expecting or Reacting to innovation

I'm a bit mystified this morning, mystified by the fact that so many people I interact with are constantly talking about innovation, and how often they are surprised by it or overtaken by events.  The word innovation seems to be on everyone's lips, is constantly in the news, but somehow the concepts behind these words never go beyond the surface.  Why is it that smart people who are constantly speaking about innovation and hearing about innovation are so often overtaken by innovation?


I'm of the opinion that many people in the business world have sacrificed a significant portion of the proactive selves in order to operate in as efficient a manner as possible.  Years, no decades of work on right-sizing, outsourcing, Lean, Six Sigma and a host of other solutions has made modern business exceptionally efficient, and exceptionally reactive.  We no longer seem to possess the entrepreneurial spirit, risking even a little bit to gain even more.  Instead many people seem content to file an exception report when things go wrong, and take corrective action to remediate any issue.


It's time to get proactive


In the recent past, when you might have had a chance to respond quickly to a competitor's new offering, being reactive to innovation made some sense.  You could wait for someone else to prove a technology or market, establish price points and channels, and then swoop in after the market was proven.  Let someone else take the risk was the mantra.  Those days are over.


In those days you had a handful of well-known competitors and a much more slowly evolving market.  Today, you have dozens of competitors, popping up and disappearing all the time, in all regions, and the pace of change and customer expectations have both accelerated.  You cannot win by waiting.  You must shift your innovation perspective from reacting to innovation to expecting to lead.


Expectations


Setting and living out expectations is vital in any human endeavor.  Understanding the level, intensity and scope of work helps people gear up for the work to come.  When we allow passive, reactive expectations to creep into our thinking, we sacrifice a lot of opportunity.  As noted, in the past that may not have been a problem, but now it is. 


Executives and managers need to set the tone.  We need to create new expectations about our business models and how we'll compete.  We need to be far more proactive, exploring new opportunities, discovering new technologies and taking new risks.  There are far more companies doing this far more regularly than you expect.


Introducing a mind shift


What we are talking about here is a mind shift, shifting from a more passive and reactive model of thinking about innovation (which is what allows smart people who hear about innovation to be constantly surprised by it) to a much more proactive, risk-taking model of thinking about innovation, constantly asking what innovation is next and how do we win.  This means, and you know this, a lot of innovation success is tied to corporate and organizational thinking, communications, goal setting and culture.  The culture that embraces movement, change, uncertainty, exploration and proactive innovation is the one that is going to survive.  Those companies where the cultures resist these concepts are in a bad way.


If we queried your teams, what would they say is their state of readiness and expectation?  Would they say they are capable of reacting to innovation when they see it, or would they say they are taking the steps to proactively introduce innovation?  This simple question may tell you all you need to know about the future success of your organization.

Why we should expect more disruptive innovations

I've used the example of Tower Records before - a behemoth astride the recording industry - brought low very quickly by a sudden shift in music distribution. The shift from physical media to digital media, and the shift from albums to songs as the distribution format made Tower suddenly obsolete. Similarly, Blockbuster experienced almost the exact same disruption. Using a business model based on real estate and limited selection of the top hits, Blockbuster was wiped out by a company with few tangible assets, no retail presence and an exceptionally broad catalog - Netflix.


What these two examples have in common is a rapid, sudden change brought about by innovation. In one case the innovation was in media, and in the other case the innovation was in business models and channels. What we ought to be paying attention to, however, is the amount of rapid change that's occurring everywhere - in every industry, in every function and every geography. The fact of the matter is, Schumpeter's 'creative destruction' will occur more rapidly and more frequently, and we need to be anticipating disruptive innovation, if not simply welcoming it and accepting it.


Drivers of Disruptive Innovation


What are the emerging drivers of more and more disruptive innovation? I think there are at least three key drivers:

1. Ubiquitous information:  in the past, a new technology or solution took time to gain traction in a specific market.  Now, a compelling new technology or solution can be available to broad swathes of the world's population almost immediately.  Information travels very quickly, and people recognize a compelling solution to an existing problem and can adopt it relatively quickly
2. Technology platforms:  They can adopt new technologies quickly because increasingly we have the platforms that new ideas are built on.  It took over 50 years for the telephone to reach widespread usage in the US, mostly because the cost of distribution in large, empty geographies.  But once those lines exist, voice, data and internet adoption were much more rapid because they were built on existing platforms. 
3. International monetary flows:  There are fewer and fewer barriers to acquiring goods and services in almost any country.  We can quickly start a business and start competing in other geographies thanks to the internet and the global banking system. 

There are probably more drivers - in fact I'm sure there are - but you get the point.  Emerging societal, governmental, economic and technology trends are creating more and more opportunity for radical disruption of products, companies and industries.



In short, people can become aware of new ideas more quickly, adopt them more readily because of their existing infrastructure (and their increasing knowledge and experience of technology) and because global distribution and payment programs have progressed so quickly.


What does this mean for innovators?


What this means is that we should expect to see companies like Blockbuster, Tower Records and Kodak (as past examples) and their key solutions and technologies get disrupted by new entrants more frequently and more consistently.  New solutions will emerge - some will be valuable and will more quickly disrupt the status quo, while others will simply create incremental solutions and other introductions will fail.  That's the natural order of things.  But the number and frequency of "disruptions" will only go up, and perhaps exponentially due to the factors identified above and other ones.


This means as innovators we need to be constantly surveying the marketplace, identifying emerging trends and unmet needs, identifying who is creating really compelling new solutions and what may happen if those solutions scale quickly and become disruptive.  We need to find these opportunities for ourselves, and become much more adept at innovating faster and faster.  The days of long product lifecycles and safe markets are over. 


Past responses aren't good enough


In the past, to block disruptive innovation many companies would build walls, or barriers, or attempt to create customer 'lock-in'.  Rather than compete with new ideas and solutions they'd create barriers to resist change or slow customer adoption.  These defensive approaches simply aren't good enough.  For one reason, they don't create new ideas.  For another, they embed a defensive mindset rather than a creative, offensive and proactive mindset that is required to win in the emerging environment.


Whether you set out to disrupt a market or industry when you innovate is almost beside the point.  Customers and their adoption of your ideas will determine how influential or disruptive your products and services will be.  But you must enter this market expecting more and more disruption - not just of products but of companies and perhaps industries.  Doing that will create the urgency you need to not just sustain business but to thrive.

Why you should work with an innovation consultant

OK, here comes the pitch.  I'm an innovation consultant.  I've been working in the innovation space for over 12 years.  I have a somewhat (cough) vested interest in writing a blog post about why you should work with an innovation consultant.  Of course if you happen to select this particular consultant you'll be exceptionally successful, but there are some other perfectly acceptable consultants out there.  But I digress.


The real purpose of this blog is to answer the question:  why should I work with an innovation consultant?  There are more answers than I'll have time for in this post, but rest assured I'm always happy to discuss if you have questions.


Your team needs new tools and skills
If your team has been tasked with creating new, innovative products or services, take a few days and introduce or build new skills and tools.  Trying to innovate with the existing tools and processes will only result in incremental change at best and a really frustrating experience.  Working with consultants who can identify your team's strengths and needs and provide training and recommend appropriate tools will help you do more innovation more effectively.  History and evidence prove that you cannot do good innovation work with existing tools and methods, and probably won't be successful trying to find and implement the thinking and tools yourself.


Your team needs new ideas or perspectives
Even if you are experts at innovation tools and processes, you may be mired in groupthink.  Or your team simply has a difficult time thinking beyond its existing products and services.  Something that any consultant can bring is a vital outside perspective.  Ideally consultants bring experiences that transfer clients and industries.  They see and interpret patterns that may be unfamiliar to your team.


Your team doesn't have good insight into client needs or future states
Far too many teams don't have access to actual customers, or worse do have access but don't know how to provoke good conversations and harvest important unmet needs.  Worse, few companies do a good job of understanding the emerging expectations and needs of customers they don't serve or spotting trends that will upend their industries.  In many organizations this isn't someone's job so it doesn't get done.  Good innovation depends on understanding unmet needs and emerging trends.


Your team has insights but cannot generate ideas
You were probably expecting this one earlier.  This is where many innovation consultants get called in, and most can provide this function - helping generate more and better ideas.  But without good insights, good tools and new perspectives, even an expert idea generation team can't get good ideas if the inputs aren't good.  Yes, this is a role where innovation consultants can offer value, but you'll get more value if they are involved in the earlier activities.


You want to build skills
Some innovation consultants will also double as trainers - teaching you methods and skills.  Ideally you'll define an innovation process and link innovation tools to the process, rather than simply get educated on a number of interesting but unconnected innovation skills and tools. 


You need help finding ideas, technologies, research or products
Sometimes you've got a good handle on the customer needs but lack visibility and capability when it comes to finding the IP, research, technologies or products you need to address the need you've identified.  Some consultants do a great job with "open innovation", that is, helping you identify, find, vet and acquire good technologies, research or intellectual property.  Of course this can work in the reverse as well if you have IP or research and you'd like to find other companies to acquire them.


You'd like to rethink or refocus your corporate culture
In the end your corporate culture, how it thinks about innovation, how it compensates and rewards people, what it emphasizes and what it ignores, will dictate the vast majority of the success or failure of any innovation activity.  Innovation consultants can help you rethink vital components of your corporate culture and begin the work to shift it toward embracing more innovation.


I could go on, but I think you get the point.  I don't do my own plumbing because I'm not good at it.  Likewise with carpentry and auto repair.  While I could take a reasonable stab at those things, in the end I need each of them to look good and work well.  In the same way, you and your team can attempt to do some innovation without the tools, insights or training necessary, but you'll rarely be happy with the results. 

Passion and executive commitment tap the well of ideas

I had the opportunity recently to lead some training workshops with a midwestern company that is a leader in its field, but recognized it needed to do more to stay ahead of the competition.  Frankly, sometimes leading innovation training feels like going through the motions - we innovators talk about innovation methods and tools, and the attendees listen politely then go back and do whatever it is they do day to day, and not much innovation happens.  I'll admit that I've led some sessions and workshops where I am sure that very little follow through occurred.  But that wasn't the case this time.

Not long after the workshops were complete I got a call from the executive sponsor, who was so excited about the results and the work his teams were doing on innovation.  He felt they had more, and better ideas than they would have without the sessions, and called to say thanks.  It's rewarding when a client team really engages, and it made me think about what factors signify the differences between successful innovation activities spawned from innovation training, and other training sessions and workshops that don't lead to any new activity.



What made the difference

It was easy for me to see what made the difference between this engagement, which led to a lot of innovation, and others, which I'm sad to say led to little or none.  There were several factors involved:

• The company was a leader in its field and provides real incentives for entrepreneurship.
• Employees who generate new ideas and create new products or lines of business are provided real opportunities for growth and compensation.  
• The senior leadership team is fully engaged in innovation - many of them had already been through our workshops and recognized the power of a defined innovation methodology

What's more, the executive team, as demonstrated by the executive sponsor, had real commitment and passion for innovation.  They were convinced their people could create great ideas that would drive value for themselves and the business as a whole.  The executive team believed in their people, demonstrated their commitment to innovation and trusted that with the right tools and methods, they could create new products and services.

Many executives aren't willing to allow their teams to fully explore the innovation possibilities, worried that they'll waste time or get sidetracked, or distracted from day to day operations.  Some simply don't think their teams are very innovative, or have good ideas.  People understand the spoken and unspoken executive thinking and respond accordingly.  Fortunately in this case there was a vocal champion, backed by an engaged management team.



Executive Commitment, Passion and Trust

It's this commitment, passion and belief or trust that matters so much when you enter into a potentially strange or uncertain activity like innovation.  Commitment demonstrates that you won't simply stall out when unforeseen events occur or barriers rise up.  Passion keeps the team engaged and certain of support even when challenges emerge.  Trust says to the team that while the journey may be a bit rocky or uncertain we believe you'll arrive at a great destination.



I believe that many, many companies of all sizes, in all industries have a huge well of innovation just waiting to be tapped.  That well is represented in its employees and their knowledge of the needs, product gaps and customer demands that just aren't filled with current products and services.  These employees need tools and methods to help accelerate innovation activities, but first they need to know that executives want innovation and will invest in it - that it's not simply lip service.  The employees need to know that executives will commit, support them and trust them to do the right things even when tools are new or outcomes are unusual.



There are huge, untapped and unexpected reservoirs of innovation in most corporations.  Perhaps the largest untapped source of corporate wealth and capital that is simply sitting there, waiting to be unleashed.  Executive teams need to move beyond financial engineering and cost cutting and shift their focus to the enormous potential of innovation, and the easily accessed value at their fingertips.