Innovation: It’s the new black

This was a thought from an online group of media and marketing experts who were discussing innovation, its definition, and how to capture it. So, how do you define innovation? The new Tide “On the go” stick? Electric cars? iAds? All of the above? What is the secret sauce to obtaining innovation? I wish I knew. However you define it, I think you will agree that we could all use more of it.

During this conversation, several ideas were offered. The first response I heard that resonated was a bit of the “glass half-empty” perspective. The thinking was that much innovation is just smoke and mirrors. That much of what we are told as both consumers as well as businesses within the industry is just hype intended to lull you into a false sense of a companies mastery and to entice you to buy or follow. That same argument bore the idea that even if that is true, that it is still necessary and worthwhile because at the bare minimum it keeps us on our toes and for some, it keeps them reaching for perhaps truer innovation.

For many that drive to keep reaching is causing real anxiety. The pressure to innovate is at an all-time high brought on partly by the economy, lack of jobs, lack of job security, poor P&L statements as well as the need to impress upon shareholders and consumers alike that the company or entity is still a worthwhile cause.

I was discussing this with a few of the aforementioned colleagues when some began freely admitting that the game of innovation can be played two ways. The first is the  “ play to win” strategy. The second is the “play not to lose” approach. Over the last couple of years, a lot of people have been adopting the latter approach. Sometimes the players themselves do not realize that they have actually chosen that path but instead were just led that way. The question is why and how do they get into that space? Well in truth that is what their employers have been incentivizing them to do. I am not suggesting that the company mantra is “just get by”, it is much more subtle than that. The real drivers are the goals and performance metrics that are the basis for the financial compensation, bonuses, profit sharing, etc. that they receive. Most companies are unwittingly directing their people to deliver the status quo through the establishment of those status quo metrics. This coupled with the obvious fear of losing your job if you stick your neck out too far are pretty compelling motivators to not do more than you must. The funny thing is that of the dozen or so media and marketing executives and professionals that were discussing this, all agreed that if you polled marketing execs, they would all say that they are playing to win. But even amongst our small group, more than one admitted to playing it safe, something they would never speak of in a poll or public place. How to avoid this?

Outside of the compensation and incentive packages the things that we agreed were the biggest killers of innovation are pretty obvious:

  1. Fear. The ultimate idea killer. And without the right incentive, it is rare to find the individual who is so passionate that they step out of the safe zone and do it anyway.
  2. Arrogance. On the flip side when you are the best, at least in your own mind, and have always been at the top, you can lull yourself into a false sense of security pretty quickly. The two examples we discussed were Apple and P&G. Both highly regarded and known for their innovation. Apple of late has continued to innovate but have had a few missteps that could be chalked up to arrogance. (Think app or iAd  development for starters) P&G for the past few years was seemingly in a rut which again could be attributed to their elite status, they however seem to be really emerging again as of late.

What drives those people or cultural changes that spawns innovation?

  1. Passion. At the end of the day, no matter what you are paid or what incentives you are given, you do what you love to do and are most creative when you work in that space, this is not taught, it is there; it is a drive from within. A colleague told me that Bill Gates once said that Steve Jobs had the head of an engineer and the heart of an artist.
  2. Time and practice. For this I am reminded of the latest book by Malcolm Gladwell, Outliers. In it he discusses how people like Wayne Gretsky, Michael Jordan, and even Bill Gates achieved the successes that they have – they practiced more. 10,000 hours at least. Now you don’t do anything that often if you don’t really love it, which ties us back to the first point.
  3. Leadership. Again, pretty obvious, but without a culture of communication, support and a drive to succeed as a team (no “I” in team”) innovation is DOA.
  4. Risk Assessment: A good leader too will know that to get to that one brilliant innovative idea, there will be tens if not hundreds of not such good ones. Supporting this environment and encouraging failure, so to speak, is essential. 3M did this. They have 7 pillars of innovation that are part of their corporate mantra. Here are the first 6.
    1. Commitment to Innovation.  6% of revenue to R&D.  1/5 of this outlay goes to “pursuits with no immediate practicality”
    2. Tolerate mistakes. Corporate culture.keep it alive through oral history
    3. Innovation via broad base of technology.  Apply one to another
    4. Talk, talk, talk. Networking, formal and informal
    5. Quantify efforts.  Which work, which don’t
    6. Research tied to customer.  Spend time with them, learn what adds value

I chatted with Susan Cohen, who is a student getting her PhD on Innovation and Strategy. She had some really powerful thoughts and ideas so I will end with just a few of those.

“There are industry drivers, firm drivers and individual drivers – and of course they are all linked. Industries change over time and as they change, it creates opportunities for innovation at the firm level. As an industry changes – smart firms see the writing on the wall and innovate to the future – scenario innovation.

The hardest thing for many firms is to cannibalize, yet the firms that are willing to cannibalize are consistently better at innovation. Does a firm need to innovate to “win” (or not “lose”)? I would argue no. Imitation can be a great innovation strategy. The biggest advantage of imitation is that your failure rate is lower and many times, imitators improve on the original idea (think Google/Yahoo!) What a firm can’t do though is to rest on its laurels. Inertia is a pretty serious firm killer

As an industry evolves, there is at first an explosion of new firms who enter the new category (.com). Over time, the number of firms declines until it reaches a plateau (.bust). Knowing where your industry/category is in its life cycle can help you form innovation strategies. Innovating in an expanding world requires differentiation, learning what works, and offering lots of products. But when the number of firms in your category is declining you may want to consider how to shift to more mass-market/broader reach products. Along the way, innovation typically shifts to cost and performance advantages. (So stop adding new features if you are here!)

Some quick innovation advice: If you are a small company, form an external innovation board with customers, suppliers, friends or students and academics. New ideas often come from outside the company. Helping each other on a rotational basis can help breed new ideas and expand your horizons. If nothing else it should get you out of a rut. Go to a conference totally outside of your field – again get new ideas flowing.

For brainstorming, follow a framework. My personal favorite is add/subtract/multiply/divide. But there are others. Most innovation is premised on adding new stuff to old stuff (what else can my phone do?!?!)Try looking in other dimensions – what is the minimum viable product you could offer? How would that change your market? Could you combine that market with something else to make something totally different? Multiply: What’s the core of your product? What would happen if your product had 2, 3 or 4 of them (think razor blades)? Divide: What if your product had a fraction of the power? Of the size? You get the idea.

My other favorite innovation strategy is to “follow the customer.” What does the customer do before/after using your product? Can you integrate that into your offering? The CVS minute-clinic is a great example of this.”

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