Monday, February 26, 2007

Innovation Obstacles

I've just had a chance to sit down and read the results of the latest survey from InnovationLabs entitled Permanent Innovation. What jumped out at me were the obstacles that people say keep them from innovating effectively.

The survey provided a range of obstacles and each respondent was encouraged to "select all that apply". The only obstacles that reached 50% were: lack of time for innovation and resistance to change. Let's contemplate that for a moment. Lack of time for innovation suggests that innovation is an add-on or a "nice to have" for the business, not something that people should place as their first priority. Resistance to change also speaks to the same problem. There's no clear direction that innovation MUST happen. It may happen, but not if it requires addition time or resources, or forces people to change.

Sadly, this is consistent with our experiences as well. We find a lot of thinking that suggests that innovation is a part-time effort, which should be done if it does not conflict with anything else or pull resources away from "real work". If your firm does not expect to invest real time and effort into innovation, and expects it to be a sideline or part-time engagement, then set the expectations early that little will get done.

Another thing that struck me about the answers were that while there were 15 possible answers, 14 received 20% response rate. This means that there are many different stumbling blocks possible for innovation, and the people responding to this survey have each encountered several. As a side note, I'd quibble a little with some of the selections, to question whether or not "fear of failure", "boundaries between departments" and "slow to react" aren't simply symptoms of a lack of cultural acceptance. When you boil down all the responses, you'll see that the stumbling blocks are:

  • Lack of metrics
  • Poor organizational structure
  • Misaligned compensation/motivation
  • Cultural issues
  • Lack of defined processes and methods
  • Lack of training
  • Poor alignment to strategy (I'd add this one based on experience)
Once you reconsider that the number one rationale was "lack of time for innovation", then the others obstacles make sense. If you can't find the time to innovate, then you certainly will struggle to find the time to define the processes and metrics necessary, or define and improve compensation and corporate culture.

No other important business function or process works this way. In most business processes and business functions we are process-managed, trained and measured to death. The Russians under the old Soviet government used to have a saying "If you pretend to pay me, I'll pretend to work." Innovators need to stop pretending to innovate and demonstrate why innovation deserves to receive the time necessary for success.
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posted by Jeffrey Phillips at 1:52 PM 14 comments

Friday, February 23, 2007

The Permission Slip

Do you remember high school? There was that magical time when everyone else was in class and you were still wandering the halls. You had this freedom due to a small slip of paper from someone in authority - you had a permission slip - which gave you the right to get out of class and do something different.

As I work with innovators in a number of firms, I am struck by the fact that many of them are still searching for their permission slip. They need some permission to slip the corporate bonds and begin to create something new. They need a permission slip to try some ideas that aren't the ones that have typically been tried before. They need a permission slip to work with people from other business units or perhaps even other firms. They need a permission slip to fail ocassionally, since innovation requires stretching the capabilities of the firm.

So, if many innovators are struggling to get a permission slip, where should they turn? What rationale do they use to get the permission slip? In many firms, the executive teams are slowing gaining an understanding of the importance of innovation, especially for organic growth and differentiation. However, understanding the importance and giving permission to people who want to innovate are two completely different things. Rather than wait for the permission to innovate, innovators need to define their plans and actively advocate for their plan to the executive team. Rather than wait for permission, the innovator needs to actively seek permission. In a worst case scenario, the innovator may need to ask for foregiveness, rather than permission.

We've trained our organizations to wait for the green light. We expect in most cases clear communication from on high to direct us and our teams. In any new initiative, people will ask - who gave you the authority? What is your budget? What they are really asking is - do you have the permission to do this? If not, don't count on me to participate.

As I noted above, if you are an innovator, you need special permission. Permission to start an innovation initiative simply isn't enough. You need permission to try some new things, work on ideas that have not been examined before. You need permission to fail as well. If your permission slip allows only one failure, then you'll never truly innovate.

My advice? Stop waiting for the executive team to give you permission. Draw up your plan and demand they act on the clear need to innovate. When you ask, be sure to ask for a broad mandate that allows your team to explore the many different possibilities and provides a reasonable time frame for success.
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posted by Jeffrey Phillips at 4:48 AM 17 comments

Wednesday, February 21, 2007

Swinging for the fences

In our paper over the weekend was an article about the X Prize Foundation, a team put together to encourage innovators to solve big problems. The foundation identifies areas of focus and defines a challenge and a prize associated with the solution for that challenge. You may recall that the first commercial flight into space in 2004 won an X Prize.

Now, I'm all for swinging for the fences, but I fear this type of thinking inside a business. Too much focus on one large, completely disruptive idea can distract from the needs for quarter to quarter, year on year growth and profits that other forms of innovation can provide. This kind of thinking in a business can also drain the resources for incremental innovations. What's important in a business is an investment in a range of innovations, some that will pay off in the short run and some that have disruptive capability that may not pay off for several years.

To continue the baseball analogy, a balanced baseball team has a lineup that features hitters who are very adept at getting on base, as well as those who hit more for power than for average. Too many banjo hitters and a team can struggle to move men around. Too many power hitters and a team struggles to get men on base consistently. A balanced lineup ensures a good mixture of both: batters who hit for average and batters who swing for the fences.

In our innovation teams, we need a consistent flow of ideas that demonstrates a solid process and continues to generate new products and services over time. If we become too enamored by the one "next big thing" and neglect the singles and doubles, the new product or service pipeline will dry up, placing even more emphasis and importance on the next big thing. Given that many longer term disruptive innovations fail to achieve the goals set for them, a firm in this position has made an exceptionally big bet on one small set of ideas.

We are asked constantly which ideas a firm should emphasize, disruptive or incremental. In most cases, the obvious answer is that your team should work on both - the incrementals to provide a consistent stream of new products and services for existing customers and the disruptives to attempt to radically change your market or a competitive market.
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posted by Jeffrey Phillips at 4:36 AM 15 comments

Monday, February 19, 2007

Virtual Innovation

I attended - for the first and last time - a Monster Truck Jam with my son over the weekend. While it's pretty cool to see these monster trucks drive over several junked cars once or twice, by the 18th time it frankly had gotten a little repetitive. But the topic that really struck me was the fact that several of the monster trucks were born from toys.

One of the drivers was asked about his monster truck. Turns out his monster truck is sponsored by a firm that makes radio controlled toy cars and trucks. The model was so popular that they created a real "monster" truck based on the toy. Now, this is an interesting development. We're beginning to create real products from toys or even imaginary products.

Which led me to think - how long before someone creates a product or service in a virtual world - Second Life or some other gaming environment - that becomes a real product in the real world?

It seems to me that beyond all of the violent games and other virtual reality many people spend their time in, there will evolve a separate existence for some people - much like Second Life, or some other virtual realm where people can take on their own personas. What's also clear is that someone has to define the rules for that virtual environment - does gravity exist, can your avatar die in a virtual space? I was influenced in this thinking by reading Snow Crash by Neal Stephenson. But what's really interesting is to assume that someone will create a product or service in a virtual world that will make its way to the real world. Given that many people spend time in a virtual existence now, and more will do so as computing and software advance, any new product or service online can be defined and sampled by a large number of people. This means product testing and prototyping should be easier in a virtual space than in real space.

Also, people spending time in a virtual space have much less patience for products or services that don't work or don't add value. The attention span is short and the cost to spend time working with something that doesn't perform well is too high. In fact, product testing in a virtual world makes some sense, given the parameters and the types of people who exist in the virtual space.

Now that some products start life as toys, what's to keep new products and services from starting out in the virtual world?
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posted by Jeffrey Phillips at 4:57 AM 24 comments

Thursday, February 15, 2007

The innovation fad is over

I was reading Endless Innovation, the new blog by Dominic Basulto, who has also been instrumental at Business Innovation Insider. A post in his blog about the end of innovation caught my eye. Bruce Nussbaum at Business Week declares that there's a backlash against innovation. Well, that's sort of misquoting Nussbaum. This is just the continuation of a cycle we've seen before. This is also good news.

Every important management trend got started this way. I was working with customer relationship management software before people heard of Tom Siebel. At first, CRM was the complete ticket to solve your customer management woes - it would snap sales people into line, improve sales pipelines and "manage" customers more effectively. Except that CRM didn't really do those things out of the gate. It required a change in culture and in management thinking before the software and processes could make a big change. So, after a few years, Gartner was famous for a report that over 50% of all CRM implementations failed. In any management trend, once a leading firm has identified the end of the trend, you can assume good things will happen next, since the people who were along for the ride will get off, and the people who are in it for the long run will get started.

Remember Sarbanes-Oxley? SarbOx? Some Socks? A few years ago I knew a number of people racing to start new companies to take advantage of the new rules. Sarbox was going to change corporate accounting and there was constant media coverage. What have you heard or read about Sarbox lately? The media decided that Sarbox had run its course. Of course there are many firms actively complying and we hopefully have better financial reports as an outcome. Once the hoopla died down, the real work began.

I think this is true for innovation as well. As many writers have pointed out, Ford is not innovative because they adopt a tagline with the word "innovation" in it, and they are not innovative because the past CEO or the current CEO talk incessantly about innovation. Ford - or any other organization - becomes and remains innovative when the people who actually do the work in the organization are motivated, led and compensated to be innovative, and when the culture and processes enable and support innovation. Those things take time and happen after all the fanfare is over.

If you are reading about the end of the innovation fad, it means that the read work is just beginning.
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posted by Jeffrey Phillips at 4:57 AM 34 comments

Monday, February 05, 2007

What kills innovation

Over the last few years I've found that the most significant obstacle to sustained innovation is feedback. I know you were probably expecting something more profound or robust, but there it is. Yes, you can fail if you don't have good processes. Yes, you can fail if you aren't willing to listen to your people about their ideas. There are hundreds of ways to fail from an innovation perspective, but feedback is the most subtle and the most powerful one.

Most firms move along, operating fairly well, and demonstrate some interest in a new product or service. Then, something changes in their market. A competitor releases a brand new product. The market shifts as a substitute arises. Then, the management team is all ears for new ideas. GIVE US YOUR IDEAS, will read the headlines on the corporate newsletter. The CEO and his reports will speak incessantly about the importance of innovation - but what they are really looking for is just enough innovation to catch up to or move slightly ahead of the competitor with the latest gizmo.

Now, all of that is reasonable and understandable. For the most part we only want to do enough work to move just slightly ahead of the competition. Anything else and we're the pioneers. So far, so good. The challenge happens when it's no longer necessary to generate ideas to move past the competitor. Ideas are not like water faucets. They can just be turned on and off at will. So, once the idea machine has been turned on, there's not much that can be done to turn it off. Except to ignore it.

As people capture and submit ideas, they expect that the ideas will be considered and evaluated. Once the management team no longer needs new ideas - or at least thinks this - they will stop evaluating new ideas, and while new ideas will continue to stack up in the idea database, none will be evaluated or considered. In fact, the submitters will receive no feedback at all. In fact, this lack of evaluation and feedback is WHAT KILLS IDEA MANAGEMENT SYSTEMS EVERYWHERE AND ALL THE TIME. If you want to kill an idea management system, just ignore it. Eventually, everyone else will too.

So, the next time you are sitting around wondering whatever happened to those great ideas you submitted, recognize that the management team you work for has decided that innovation is important periodically, and your ideas just aren't important right now. Like the boy who cried "wolf", the management team will be back for more ideas at some point in the future, but the ideas may not come to rescue them.
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posted by Jeffrey Phillips at 5:19 AM 119 comments