Thursday, September 05, 2019

If it doesn't fit, it must be innovation

Years ago, Johnny Cochrane convinced a jury that OJ Simpson was not guilty of murdering Nichole Simpson.  While there were undoubtedly many factors that led to the acquittal, one of the biggest factors was the gloves.  When OJ tried on the gloves in the witness stand, the gloves did not seem to fit his hands.  Cochrane then uttered the famous line in his closing:  if the gloves do not fit you must acquit.

Whether you think that is a compelling line of reasoning for a jury trial or not, it might not be a bad way to think about innovation.  You see, many companies cannot adequately define innovation for their employees and teams.  Sure there are interesting definitions like "innovation is a new to the world idea" or "innovation is doing new things" but these are abstract concepts.  What employees need is clarity about what is "innovation" and more importantly, which innovations are useful and acceptable and are likely to get funded.  I think Cochrane's statement leads us to a potential solution.

Why do definitions matter?

Before we dive into how Cochrane's statement is very apropos for innovation, let me just digress to extol the importance of clear communication and innovation. When communication is good and definitions are clear, people can do good work.  When communications are poor or definitions are incomplete, people generally take one of three tacks:  1) they stop working until communications are clear or definitions improve, 2) they create their own definitions and start working or 3) they fall back on what they already know and trust.  All three outcomes as described here are bad for innovation:  two (the first and third) basically revert to the status quo.  The second has the innovation team dreaming up its own activities and defining its own outcomes.

When innovating, people need to know how much change to introduce, how much risk to assume, how much impact to create.  Without that information, everything is likely to be incremental.

Does it fit?

There are perhaps two types of innovation in the definition I'd like to propose.  Neither definition is "good' or "bad" but may be helpful when considering what innovation is and which innovations are useful.  What I've found over my 15 years of innovation consulting is that innovations either "fit" with how the company thinks and does business, or they don't.  Again, we aren't trying to ascertain the potential impact or market value of an idea, but trying to define which innovations will be accepted and funded.

This is almost the same as talking about incremental innovation and disruptive innovation, or "horizon one" innovation and "horizon 3" innovation.  Innovations that fit the existing operations, product lines and business models, that serve existing and adjacent customers will "fit" the business and are very likely to be accepted.  These are incremental innovations, small changes to existing products, services or ideas that won't cost much to develop and won't introduce a lot of risk.

It does not fit

Ideas that don't fit the existing product line structure, don't serve existing customers or don't fit within the existing business model do not fit and will often fail to attract internal investment.  That's because they introduce too much risk and change.  Ideas that require a new business model require working in a new way.  Ideas that require attracting new customers require new and potentially different marketing investments.  These ideas will occasionally rise in an innovation portfolio but will rarely receive internal approval.  Ideas like these are often pursued by startups or new entrants who have less to lose than incumbents.

Value Judgements

Neither incremental (those that fit) or disruptive (those that don't fit) ideas are necessarily good or bad.  The focus and impact will depend on the context and strategy in the moment.  The problem is that most, if not all ideas are expected to fit the existing operating model, and will therefore be incremental at best.  Ideas that don't fit aren't often welcomed and face a significant number of challenges.

A good innovation portfolio will include a significant number of both types of ideas - those that fit the model and those that don't.  Constantly ignoring ideas that don't fit your model simply cedes the emerging and interesting portions of your business to competitors or new entrants.

Instead of asking - "does it fit" we should, in fact we must ask fairly often - which ideas do we have that don't fit our operating model, and how many are we investing in.  
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posted by Jeffrey Phillips at 5:44 AM


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