Monday, May 22, 2023

My innovation journey (so far)

 I think a re-introduction is in order.  I've been leading innovation work for close to 20 years, writing about it on this blog and in my book (Relentless Innovation).  I've made some great friends along the way and been influenced by a range of great innovation thought leaders.  Over the last year, I needed to take a step back, to focus on some other things, and to get a new perspective.  Too much time at the innovation coal face was making me a bit cynical.  I'm ready to dive back in, to write about innovation, to lead innovation projects and to build up an innovation competency in the firms where people want to get good work done.

My innovation journey

My journey started in a rather inauspicious way.  A good friend and I were eating lunch, and talking about concerns that there wouldn't be any good or interesting jobs for our kids, because of the usual technology advances - robotics, automation, machine learning and other factors.  We felt that to remain competitive, larger companies needed to recapture the sense of wonder and adventure that working in the "front end" of innovation would create.  My friend, who founded OVO Innovation with me in 2004, was really passionate about the idea of reviving innovation in corporations.  I have to admit, I was skeptical at first.

Doing new things in large corporations is difficult.  There is too much pressure to toe the line, to continue to work in highly efficient and well-understood processes.  Market evidence will tell you that most of new product innovations fail in the first year.  Most managers will ask:  why take the risk?  Managers can squeeze out a few more percentage points of profit on existing products without significant risk.  Any innovations kicked off now will only pay off - if they pay off - down the road.

But, we got started, getting some initial training from Tim Hurson, who wrote Think Better, a great book on innovation thinking, creativity and facilitation.  We won a few small projects at first and had the idea that what companies needed was a great place to store and manage ideas, so we built an online idea generation and brainstorming platform, and an idea management solution, which completed with industry leaders BrightIdea and Spigit and Imaginatik back when.  What we quickly realized was that while companies could acquire and use our software, they lacked the infrastructure, the processes and the teams to do anything with ideas, so we quickly scaled up a consulting capability, more focused on how to do innovation, rather than how to capture and manage ideas.

Innovating on Purpose

With this learning in mind, we created a methodology called Innovate on Purpose, which was meant to illustrate that innovation is not accidental, it isn't something that happens only in R&D and isn't a black-box activity.  Defining a process and the meaningful steps, and training good people on the thinking styles and tools can accelerate innovation and, more importantly, make it a repeatable activity.  In other words, rather than consider innovation an unusual, once in a lifetime accident, we believe innovation can become a more consistent process within a business, easily taught, frequently repeated and far more successful as teams experience innovation work and come up a learning curve.  We simply need to take some of the fear, risk and uncertainty out of doing innovation.

We worked with a number of Fortune 500 companies, mid-sized companies and even some startups, to deploy our methodology, to build innovation competency teams and implement processes.  I'm happy to say that many teams and individuals we worked with are still innovating, but certainly not all of them.  What we found over time is that frequently innovation is simply a word that executives and corporations want to use to appear to be creating new products and services, while neglecting the people and the investments necessary to create new products and services.  Just as "green-washing" takes place to make companies appear more ecologically friendly, so to does innovation theater happen in many companies, to make it appear they are doing more new product development than they are in reality.  This practice, of course, has led to its own moniker - innovation theater - and to rising cynicism on the part of people who want to get more innovation done.

The next shiny object

I started to get a little frustrated and perhaps a little disillusioned a few years ago, when I was asked by an executive in a company I was working for to blend "digital transformation" into our innovation offerings.  Digital transformation was becoming the hot buzz word, and I worried that it would detract from innovation - creating new things of value - to switch the focus to digital transformation - implementing systems and technologies to cut costs.  And you can guess which version is winning.  Digital transformation can be innovative, but most digital transformation is about cutting costs using technology that exists.  Not too innovative.

Now, of course, there is a new buzz phrase - machine learning and/or AI, especially focused on ChatGPT.  Many businesses are now trying to grapple with what generative AI or applications like ChatGPT will mean for their business.  It's not a wonder that many executives, confronted with significant wage and cost inflation, a divided economy, trouble in China and a major focus on AI, are not quite certain where to place their bets.  Any investment in innovation, or digital transformation, or AI, or reworking a supply chain, will take time and mean there is less investment for other activities.

Innovation still remains

However, one thing is certain:  except for champagne producers, every company needs to create new products and services in order to stay relevant.  Whether those products, services, business models and customer experiences are leveraging digital transformation, or are delivered through artificial intelligence, we still need to spot ideas, ensure they align with emerging customer needs and to take risks creating new products, services and business models.

When we finally cut through the noise and begin to identify what is real, what drives value, what creates new products, services and business models that customers want and are willing to pay for, at higher margins than existing products, we'll see that innovation is still as vital as it ever was.  This is illustrated in some way by the number of entrepreneurial firms creating new products, services and business models.  Will larger firms continue to focus on their core products, ignoring the need to innovate, as time compression and customer demands makes the near future more volatile?  I think we'll need to watch carefully.

To end, I'll just note that the revered management thinker Peter Drucker said that businesses really only have two important functions - marketing and innovation.  According to Drucker, everything else a business does is a cost.  Let's get back to doing the important work - innovating products, services, experiences and business models.

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posted by Jeffrey Phillips at 6:24 AM


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