Friday, December 05, 2014

Innovation: Snake oil, placebo or wonder drug?

I was scanning the Twitterverse today when I saw that one individual, Rita McGrath, a professor at Columbia, posted the following tweet:

"Met with senior executive today.  Talking #innovation.  He says, deep sigh, "Innovation is the answer to everything".  Disillusioned?

This tweet represents the way a number of people think and feel about innovation.  Innovation has become for many people a magic elixir, capable of solving a whole host of problems.  Declining revenues?  Innovation!  Falling market share?  Innovation!  As if we don't need to worry about the underlying reasons for business challenges, only focus on innovation as a cure-all for everything.

So which is it?

I purposely titled this blog post snake oil, placebo or wonder drug, because there's a necessary and ongoing debate about what innovation is.  To many people, innovation is the latest snake oil, promulgated by people like the professor in the movie the Music Man, who swindles the citizens of a small Iowa town. It's true but unfortunate that many people have used innovation to paper over problems, to offer solutions that made great promises but failed to fix the more mundane existing business challenges before trying to create a new product or service.

To others, innovation is a placebo.  In medical terms a placebo is a harmless, inert pill that is used to compare results of a new test drug.  Half the population receives the placebo, the other half the new medicine, and results are tracked.  What's often true is that health improves even in the group taking the placebo.  They believe enough in the efficacy of the pill that they either will themselves to better health or they discount their real illnesses.  Innovation is often like that - just the introduction of innovation tools or consultants makes an organization more engaged, whether or not it is really more innovative.

To others, innovation is a wonder drug.  Innovation creates valuable new products that help achieve business goals and creates significant value and differentiation.  These are some of the firms you read about constantly, like Apple (at least in the past), 3M, Gore and others.  These firms seem to grasp something about innovation that others don't, and are able to parlay innovation into ever increasing returns.

What's the difference?

Instead of discounting or ignoring the differences between outcomes, we should acknowledge the differences and ask why they exist.  Some firms are snookered by "innovation" - they invest in something that looks like innovation only to realize it didn't deliver, or wasn't sustainable.  Others have a temporary success with innovation but it doesn't "stick".  Still others are consistently capable of innovating over time.  These are the realities, and why, to return to the quote above, there is distrust and disillusionment.  In many cases innovation is failing because of the lack of investment and even cynical implementation of innovation in companies.

The difference between these results lies in engagement and commitment by the executive team.  In case after case it's easy to see that the more a senior executive team is engaged and committed to innovation, the more it emphasized the purpose and importance of innovation and the more it directs how and when innovation should and can be used, the better the outcomes.  In the snake oil example, the leadership team, like the folks in the small Iowa town, fall prey to a "quick fix" that is on offer from unfortunately many unscrupulous innovation firms.  But much of the blame for this failure belongs to the executive team, who fail to research the investments and don't commit or engage in the innovation tasks.  They simply demand innovation and expect it to be delivered.

The firms that represent the placebo example are earnest and somewhat engaged in innovation, but are easily distracted and when they lose focus, their teams and staff lose focus as well.  A short success is followed by a withering of innovation capability.

Firms that are truly successful over the long run have deep commitment to innovation, not only at the executive level however.  Using 3M as an example we can see that while CEOs come and go, all with different goals and interpretations about innovation, the culture had innovation embedded in it, so innovation remained important.  And this is another factor for distrust and disillusionment.  I think that many executives aren't so distrusting of innovation as much as they realize how much work it will take to fully embed innovation in an organization.

So the way executives treat innovation has a lot to do with its success in an organization.  Do executives see innovation as a magic wand to wave around, reciting the word innovation in the hopes that something good will happen?  Or do they understand how much work is involved to fully embed innovation capabilities in the business, and focus their efforts to achieve a deep understanding of innovation?

What is it good for?

Finally, we need to ask what innovation is "for".  One of the other reasons the executive quoted above is so "disillusioned" is that everyone knows innovation is the hot new management buzzword, so it becomes the "go to" answer for every business problem.  Innovation solves everything?  Hardly.  There are many challenges where innovation tools aren't helpful.  Innovation should be a part of any business strategy, but only a component, not the entirety.  When people don't understand how to use innovation or its benefits, but do understand that it's becoming the lingua franca of management speak, then they frame everything in an innovation lens.  And that's unfortunate.  Because a powerful, capable tool in the right situation and the right hands becomes snake oil or a placebo.

When the US and the Russians were in the race to the moon, both were innovating.  But a good example of the overuse or misuse of innovation was in writing instruments.  Both countries recognized that astronauts would need to write notes in outer space.   The US came up with a pen that writes in zero gravity, an engineering marvel but very expensive.  The Russians sent their astronauts with pencils.  Did we need zero gravity pens, or could that innovation energy have been better allocated somewhere else?
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posted by Jeffrey Phillips at 6:24 AM


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