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When I'm in a cynical mood, I sometimes like to compare corporate innovation to teenage sex....
Everyone talks about it, yet at the moment of truth the earth doesn't really move. When I'm really cynical, I think the +90% failure rate in innovations is actually doing our youth a disservice.
Still, taking a more positive view, I wanted to have a go at eight truths for "real innovators." There's probably more and you may not agree with all, yet as usual, I'm happy to learn.
Truth #1: Stop equating innovation to R&D.
While white coats are important, there's more to innovation than product & technology. That is why real innovators track every area that could give them a competitive edge and actively seek out areas their competitors have missed.
They introduce metrics to innovate against the customer experience, the processes, the business model of the company. They question every aspect of the organization, not just its product's performance.
Truth #2: Pay people to fail.
Most companies base their performance bonuses and promotions on being "successful.” This means that if you've got a mortgage, kids and half a brain you're not going to stick your neck out on things that may go wrong.
Yet it is exactly the risky projects that lead to competitive breakthroughs and require the smartest people in the company. Real innovators understand this and figure out ways to reward people even if they fail.
Truth #3: Treat everyone as an innovator.
In most companies, less than 10% of the workforce is involved in innovation. Real innovators understand this untapped potential and set up systems to capture the thoughts, ideas, dreams and opportunities generated by the other 90%. They look at every concept and reward the individual who came up with it. They train every employee in the art of innovation. They give people time and space to develop pet projects and take them seriously.
Truth #4: Kill bad ideas quickly.
Structural innovation is about finding nuggets of gold in a pile of rubbish. Yet in organizations people sometimes fall in love with the rubbish they created themselves. This can waste valuable resources and divert the company's attention.
Real innovators understand this and establish processes to kill bad ideas quickly, without disparaging the people who came up with them. (Their next idea may be a good one.)
Truth #5: Launch first, worry about the shortcomings later.
Traditionalists want to get every aspect of an innovation absolutely right. The speed of today's economy however requires an "fast to market" attitude. Real innovators understand that the best school for product improvement is the market itself. That is why they work with pilot customers to fine-tune products and learn on the job, rather than making elaborate assumptions.
Truth #6: Don't believe what your customers tell you, dig deeper.
People are notorious for saying one thing to market researchers and then doing something else. Real needs lie beyond superficial market surveys and live in the realm of emotion. Customers are human, which means they have dreams, fears and frustrations waiting to be answered.
Real innovators dig for these deeper level thoughts and embrace them in the way they develop, introduce, package, sell and deliver their value proposition.
Truth #7: Don't try radical innovation, buy it.
Just like our body starts fighting any virus that may threathen it's existence, organisations annilihate any innovation which may undermine the status quo (just imagine the hypothetical scenario of a telco researcher trying to convince his bosses to introduce free VOIP before Skype existed). That is why real innovators don't pursue "radical" innovations themselves. They just buy them when a dominant design appears to emerge.
Truth #8: Mix elements that shouldn’t be mixed.
Real innovators ask scientists to work in stores and involve the receptionist in product evaluation. They bring in artists, scientists, writers, philosophers and anthropologists, even if these people have no idea what the business is about.
Leonardo da Vinci built some of the most impressive fortifications of the Renaissance. Real innovators understand the art of being the Duke that had the foresight of giving a “painter” a military commission.
If you have any truths I've missed, don't hesitate to comment!
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Comments
Alain,
Excellent post and a good list. I do want to comment on one of your Truths: Truth #5: Launch first, worry about the shortcomings later.
This may be true in some businesses but not in most. We must take a traditional, careful and long approach when we produce products as services such as those in the following industries: food and beverages, infant products, pharmaceutical, and aerospace, to name a few. Launching first and worrying about the results later could be a deadly concept for both consumers and the business owning the products and services.
I also want to mention that readers should keep in mind that there are two types of innovations: 1) Those that lead to original and first-launched products and services, and 2) Those that substantially improve or radically change a product or service currently in the marketplace.
Posted by: Lewis Green | 09.25.06
Love Truth #8 ... mix elements that shouldn't be mixed. Silos and the group think that dominates any silo's resident community are a prime culprit in stifling innovation.
"Outsiders" have a penchant for asking the most provocative questions that can open minds.
Posted by: tom belford | 09.26.06
Lewis
Thanks for pointing this out. I'm certainly not advocating putting things that aren't finished or safe on the market place (and perhaps should have chosen better words to reflect this).
The point I am trying to make is that in the process of trying to get it "right" many companies tend to get lost in internal quality controls and considerations, while actually setting up a prime- or beta-user programme can work much faster (and unfortunately I've also had my share of foodstuff producers making the same error).
But obviously - as you rightly point out - not at the expense of taking risks with customers health or happiness.
Posted by: Alain Thys | 09.26.06
Well done! Well done! These are the things that promote innovation. Yet last year 62% of CEOs said they were disappointed in their innovation return on investment, and the year before 97% expressed their disappointment according to my Boston Consulting Group pollster contacts. Why the sudden drop? Nothing more than CEOs adjusting their Inno-Speak and Corporate image. (Expressing disappointment is bad for the company)
According to McKinsey & Company revenue in the US $2 trillion consumer products industry is flat and business leaders want to know where the new growth is going to come from. The reason why innovation fails to deliver? Marketers eager for quick kills believe their own hype and simply overuse and abuse the term "innovation," applying the label to almost everything they do. If GE redesigns a water filter, that is considered an "innovation." But making the old new is not an innovation. It's just what you are supposed to do. Then retailers such as The Home Depot assemble 100s of products in the big month-long "HomeShow 06 Innovation" Promotion. Their are no incremental sales. Why? Because revamping existing products has always failed to generate incremental usage occasions or bring new users to the category. Innovations are few and far between. Marketers simply need to be harder upon themselves, use the tag less frequently, and ultimately, innovation figures will soar.
Thanks. Great post!
Posted by: Martin Calle | 09.29.06
That's a great list!
Just to add an example to your Truth #2, Alain: At General Electric under Jack Welch they held big 'celebrate failure' meetings where an engineer would stand up on a stage and explain why, for example, the environmentally friendly lightbulb they had been working on had failed. The 'best' failure i.e. the one that had the most transferable lessons for the hundreds of other GE-ers in the room so they could avoid them when working on their own innovations, would win a TV or $1,000 or some other prize.
And to expand on your great Truth #8, one way of mixing to obtain innovation is to take new practises from other sectors that are new to your own sector and 'transplant' them. Drive-thru airline ticket check-in for Upper Class passengers on Virgin planes and other airlines is one example of minimizing risk by introducing a concept customers are instantly familiar with from other sectors, and that you know works. The innovation comes in adapting and applying it to a sector where it is an improvement on existing practices.
Posted by: Phil Dourado | 09.30.06