Tuesday, February 03, 2015

What's your perspective on innovation?

Our clients are always interested in what will lead to the most innovation within their companies.  Is it the markets or industries they compete in?  Do they have a natural amount of innovation or resistance?  Do software firms innovate more than manufacturers?  Is it the culture of the organization?  If we have ping pong tables in the break room, will that make it more innovative?  How about the people?  Do we need hipsters, millennials, Boomers or some other segment?  Do we need creatives, designers, artists?  Sometimes it seems we could actually remake many corporations by merely suggesting that they need more designers or Millennials.  But while these factors contribute to innovation success, there are other factors that we care about.  One of them is passion.  Does an individual have passion for the problem and a desire to create a solution?  Will the individual move mountains to try to solve the problem?  Sounds like an entrepreneur, but given their head many corporate employees can identify challenges or problems where their passion lies.  And with passion comes commitment, engagement and many other factors that can drive a successful innovation activity.  But there's one other factor I always look for:  perspective.

Send me the shoes

There's an old story used to make a point, primarily to sales people, but it is entirely apropos here.  Two shoe salesmen are set to set up shop on an inhabited island that hasn't had a shoe franchise before.  When they get there they discover that the entire population is barefoot - no one has developed shoes or sold shoes to the population, and the population hasn't developed its own footwear. The first salesman sends a message back to HQ:  please come get me out of here.  None of the inhabitants wear shoes.  The second salesman sends a message back to HQ:  please quickly forward all the makes and models you can.  Nobody wears shoes here.  The market is huge.

In the world of sales, the idea that people who don't wear shoes also don't need shoes is nonsensical.  If the need isn't present, create the need and then fill it.  But look at the second salesman.  He recognizes a huge, untapped market because he believes he can fill needs customers aren't aware of.  Yes, it may take time to get the population to wear shoes, but once he convinces them of the need for shoes, he'll have the market to himself.  The two characters in this story represent two different and competing perspectives:  what is possible with a positive outlook, and how quickly people will surrender to a negative outlook.  What people do we want on an innovation project?  The people willing to take an expansive, inquisitive, positive take on any opportunity or challenge, regardless of their position, age, training, managerial level, zodiac sign or depth of innovation training.

A few days ago I wrote a post about the amount of opportunity available even in a highly competitive market.  Far too often corporations shy away from competing in what appears to be a "red ocean" - a highly competitive market with lots of competition and low margins.  Frankly, it makes sense to place investments where you can win more share and more margin.  But even in highly competitive markets there are opportunities.  We can look at Uber, NetFlix and AirBnB as just a few examples.  All three compete in what initially were highly competitive markets.  There are plenty of options for taxis or rental cars, movie rental options (at least while Blockbuster was around) and hotel rooms.  Each entered a competitive market and disrupted it by rejecting the status quo channels or business models and offering customers basically the same product but in a new way.  Do you think the first salesperson, dreaming up a new way to rent rooms to people, would have developed AirBnB?  No!  He'd say:  well, there are a lot of big companies competing in this space and a lot of the valuable real estate is locked up, and I don't have much pricing power or branding, so I'll go do something else.  The entrepreneurs behind AirBnB, Uber and NetFlix saw opportunity where others saw competition and struggle, and eventually forced the larger competitors to compete on their terms.

Why is corporate innovation so difficult

So, why is corporate innovation so difficult? For years we've told people what to think, how much risk to embrace, what mental models to use to think about their business.  We've preferred certainty to experiments, incremental change to creativity, short term thinking to long term thinking.  We've designed our teams to think like the first salesman.  Then every once in a while we gather a team and ask them to act and think like the second salesman, and frankly, they aren't prepared or capable to do that without some re-education and a whole lot of reassurance.

If you want more innovation, you need to train an army of people in your company who can execute flawlessly, improve efficiency AND who can easily and quickly think like and act like the second salesman.  It's not an either or proposition.  Efficiency and Innovation can, and must co-exist.  But we've been trained to believe that they are enemies, and that efficiency must prevail because it is predictable and safe.  On your innovation teams, how many people would rather be voted right off the island like the first salesman?  I suspect you'll find the answer is most, if not all of them.

You can hire designers, you can hire Millennials, you can hire creative types, and all of those factors may help you generate more ideas.  But until you impact the perspectives and expectations of the workforce within your company, you will rarely innovate successfully.
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posted by Jeffrey Phillips at 11:02 AM


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