Monday, February 25, 2013

Three innovation clockspeeds

The pervasive lack of enthusiasm or even awareness of time in regards to innovation is a constant source of amazement for me.  In organizations transfixed by time, speed and efficiency, innovation and product development are often the slowest out of the gate, the longest efforts to accomplish and seem completely unrelated to the real world. 

In any organization, people are constantly asking - can we do this faster?  Can we respond to customers more quickly, can we collect cash more quickly.  The only things most businesses want to do more slowly these days is pay bills.  Yet innovation seems to be in a time warp, slower by far than other important activities and processes.  There are, of course, reasons why innovation is slow:
  1. Innovation is uncertain and risky, so organizations try to move slowly to reduce risk
  2. Innovation (if done well) is often ahead of the market, so organizations try to time innovation to market needs and demands
  3. Innovation requires tools and techniques that are unfamiliar, which slows the process
  4. Innovation and subsequent product development processes are sclerotic, like blood vessels full of plaque, stuffed with unimportant but time consuming activities.
My stipulation is that you should do innovation as fast as humanly possible, even at the risk of skipping steps or bypassing checkpoints, because your internal clockspeed is almost certainly out of synch with the market's clockspeed.

Your internal clockspeed

Your clockspeed - how fast your organization works - was set by management dictum that likely governs efficiency and effectiveness in familiar and known processes.  This means that your clockspeed is relatively high when working on familiar products and services, and very slow otherwise, as the prevailing business as usual operating model rejects new innovative products and services.  What's fascinating is that your operating models slow innovation down at exactly the time that they should be speeding up.  Because you don't have to worry about your internal clockspeed only, but the external market and innovation clockspeed as well.

The strange thing about internal clockspeed is that it is similar to the weather - everyone complains about it but few do much about it.  Now's the time to stop complaining and start doing something.

External market clockspeed

Your markets are likely moving faster than your internal processes, since the markets are subject to competition, new entrants, substitutions and other factors that Porter and others made famous.  Further, as businesses grow and age, they shift from an offensive posture to a defensive posture, suggesting that reacting to incidents in the marketplace becomes preferable to creating disruptions in the marketplace.  More than likely, your best, top clockspeed is equivalent to the market's, for existing products and services, and far behind the market's changing expectations for new products and services.  But that's not the real problem.  The real problem is innovation clockspeed.

Innovation clockspeed

Innovation is happening everywhere, all the time, in your industry and outside your industry.  If you compete in a lucrative market, there are a host of firms innovating right now, seeking to disrupt your market, create substitutes for your product or to simply replace the need for your product or potentially your market.  Innovation happens far more quickly outside your business than inside your business, for reasons we've discussed above, but also because there are many ways to skin a cat - you've perfected one, but thousands of individuals and firms are working new ways to skin a cat, and many are working on developing reasons to do away with cat skin all together.  Innovation clockspeed isn't simply about bringing a new product to market faster, but about making the product or market obsolete or unnecessary.  The speed of change in the marketplace itself won't tell you this - this clockspeed is completely unexpected and totally disruptive, so it constantly surprises many in the market or industry.

Getting obsolete faster
Fact is, nobody cares about how efficient or fast your existing process are to provide existing products and services.  Those are table stakes my friend.  What will differentiate firms in the future is an accelerated ability to innovate, at least as a fast follower if not an innovation leader, carefully tracking the external market clockspeed and anticipating innovation clockspeed.  If you aren't tracking these two, more accelerated speeds and their impact on your business, the sand is quickly running out of your hourglass.  The time to address uncertain innovation processes and sclerotic product development processes is now.
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posted by Jeffrey Phillips at 3:12 AM


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