If you are responsible for growing your business, improving the bottom line, and increasing the conversion of new customers, you’ve likely cautiously entered, jumped, slid in from the side, or accidentally found yourself knee-deep in the buzzword-rich world of business innovation.
Business Innovation – a term so broad and misunderstood as to be meaningless, and yet, it is the single most important focus for companies intending to stick around in an evolving global marketplace. It is definitely something worth formalizing and making a commitment to.
Innovation is nothing new, but the myriad of posts, articles, books, and consultants talking about innovation these days makes it seem somehow more urgent now than ever before. Because it is. My interest in writing about innovation is to focus, simplify, and provide some tools that can ease your innovation burden, much like a Sherpa leading you up a mountain. Yes, you do have to climb the innovation mountain, but you don’t have to do it alone.
“We’re living in an era of digital Darwinism. Innovation isn’t a department or a tactic, it’s a way of life and operating that will inherently prevent brands from their own extinction in the market. Brands need to adapt or die”
-Peter Sena, Digital Surgeons Founder
Before we can have a discussion about it, we need a definition. It seems so simple, but consistent meanings for language used in the innovation, design thinking, and business modeling arenas is lacking. The least I can do is to give you a working definition so you have context for the rest of this article. The following holds true at least 90% of the time. There are always outliers.
- Innovation | inəˈvāSHən |
- Innovation is the combination of existing elements or behaviors in a new way, executed to serve a purpose or solve a problem for people.
5 Myths of Innovation
For this discussion, a good way to figure out how business innovation works is to look at the ways it doesn’t. The following myths help clear the way for further exploration.
Innovation applies to products and technology.
Sure. All the shiny new gadgets and gizmos get lots of press and attention, like celebrities on the red carpet. From phablets to smart homes, everyone gets worked up about latest releases and new consumer tech and even lines up for them, as if waiting for the first showing of the latest Avengers movie.
In reality, business innovation can be anything that shifts the status quo to provide an improvement in how business is done – for example, P&G’s streamlining their portfolio of brands last year, or CVSCaremark’s bold decision to eliminate tobacco products from their stores.
Usually, innovation decisions aim to improve the bottomline. But the “no tobacco” decision cost CVSCaremark an estimated $2 billion in the first year. The decision that their health and healthcare-focused business could no longer sell products proven to be carcinogens corrected a practice that stood in stark opposition to their brand mission. Building real trust with consumers starts with doing the right thing. No matter how much it costs.
(Before you start getting all squishy thinking of their brave, principled decision, you should know that $2 billion represents an income loss of approximately 1.6% for the year.)
Successful innovation is sustainable.
Wrong again, grasshopper. Well, only partly wrong. Innovation is sustainable if you continually innovate. Gone are the days of the comfortable bell curve model of adoption. Instead, we have the aptly named “Shark Fin” model.
Markets take off suddenly, or they don’t take off at all. Since adoption is increasingly all-at-once or never, saturation is reached much sooner in the life of a successful new product.
And, as quickly as products take off, they fall off. Market saturated. Move on.
Sustainable innovation, then, requires that, like a shark, you don’t stop moving. Your innovation strategy should immediately refocus on the elements of your latest success and look for other industries, and other kinds of products, where those innovation pieces can be configured into something new that will benefit more people.
An internal team focused on innovation will generate breakthrough ideas.
This one might get a little prickly, but hear me out. You know the saying, “to a hammer, everything looks like a nail?” Well that’s why innovation groups, coming from similar internal cultures, aren’t tearing it up when it comes to innovation.
Diversity of age, knowledge, life skills and experience combine to create the most innovative teams. Here’s why. People see and understand things in terms of what they know. So, if a group of people with diverse expertise is assigned a project, chances are they will generate a richer, more thoughtful, and surprising set of ideas than those coming from a similarly skilled group.
“We can ignite this explosion of extraordinary ideas and take advantage of [the effect] as individuals, as teams, and as organizations. We can do it by bringing together different disciplines and cultures and searching for the places where they connect.”
-The Medici Effect
Frans Johansson’s The Medici Effect, is a thoroughly engaging book devoted to the idea, and examples of it, that innovation happens at the intersection of disciplines and ideas. The book takes its name from the Medici family of 15th century Florence. Johansson looks at how painters, sculptors, poets, philanthropists, scientists, philosophers, financiers, and architects, assembled and funded by the Medicis, shared and adapted ideas to achieve staggering accomplishments. This unique gathering gave birth to the Renaissance – one of the most innovative eras in history.
There’s no such thing as a bad idea.
Sure there is. We’ve all seen a lot of them, mostly the result of brainstorming sessions. The brainstorming process used widely in our industry was conceived by Alex Osborn (the O in revered advertising agency BBDO) in his 1948 book, Your Creative Power. His cardinal rule, still observed by many well-respected creative firms, is to go for quantity of ideas in the time allowed. And, no criticism.
PostIts and Sharpies be damned (we do love them, and they are not being vilified here), there is no evidence that this type of group, on-demand creativity works. Certainly, Mr. Osborn had no evidence to support his idea. It just happened to go viral, and here we are.
Osborn believed that people and their ideas were too fragile to survive negativity. Yet studies cited in the New Yorker article, GroupThink (among others), show just the opposite is true: working independently first, to solve a stated problem, produces more and better ideas than brainstorming; ideas flourish with constructive debate; and, the proximity of diverse thinkers interacting in a common space gives rise to an abundance of cross-discipline innovation (there’s the Medici Effect again).
Keith Sawyer, a psychologist at Washington University, summarized the science: “Decades of research have consistently shown that brainstorming groups think of far fewer ideas than the same number of people who work alone and later pool their ideas.”
Caution: the most innovative ideas are often the ones that “reasonable” people will want to dismiss immediately as too radical. To safeguard against this, we recommend that each idea be discussed for at least 5 minutes in terms of how it COULD work, instead of why it COULDN’T.
A great idea will create a new market.
This is the “if you build it, they will come” philosophy that works best in movies, but not usually in business. More important than the shiny new idea and dreams of its potential market is the honest answer to this question: does the “new shiny” extend your brand mission, divert it, or dilute it? The discipline of, and commitment to, process-driven innovation will guide you to measure every new idea against objective evaluation criteria that come out of answering 3 deceptively simple questions:
- Where are you today?
- Where do you want to be?
- What is your strategy to get there?
If, when measured against clear objectives, the idea doesn’t help get you to where you want to go, then, no matter how “good” it is, it probably isn’t good for you.
Sidebar: This gets really tricky when that great idea happens to come from the c-suite. It will take courage and confidence to speak truth to power. It always does. So, choose the most diplomatic person on your innovation team to carry that message. Then plan to go out for drinks immediately afterward.
Creating an innovation culture for your business
Now that the myths are out of the way, we can turn our attention to how businesses can create and commit to a purposeful process for business innovation and the culture that goes with it.
“There are 4 core principles of successful innovation,” writes Vijay Kumar in his book, 101 Design Methods.
- Build innovations around experiences
- Think of innovations as systems
- Cultivate an innovation culture
- Adopt a disciplined innovation process
If you are using these principles to create your process, it makes the most sense to attack them in reverse order.
I wholeheartedly recommend this book as a comprehensive guide to innovation and design thinking. In it he clearly explains his seven modes (or steps) of the design innovation process. For each mode, he provides summaries of the most popular frameworks (methods) in use today to guide the process.
While many others writing on the subject share the 7-step process, I am always a fan of a single-source reference and use this one frequently. It’s a one-stop checkpoint that can inform the sequence of steps for a project; help evaluate which exploration frameworks fit best with the innovation challenge in front of me; and help me choose what format will communicate most clearly to the internal team, and to our client.
It’s time to think about innovation as a science
Innovation is about observation – what is trending in the world, what do people need? It’s about finding and analyzing patterns of innovation in your industry – who has been successful, why have they been successful? – and how you can use that information. Innovation requires a lot of research, analysis, and hard work.
What today’s thinkers, writers, and teachers of innovation have in common is a recognition that a defined process is needed for producing and evaluating innovations, and a standard to test ideas against in order to evaluate risk. The process is nonlinear, and it can morph as the idea evolves. But, the essential measurements have to be there, and the essential questions answered. That’s the purpose of process. When adhered to, it never lets you down.
The higher innovation is on the list of priorities for any given company, the higher probability that this company would establish a formal innovation program.
If you haven’t yet, it’s time to decide: what priority will you assign to business innovation; and, what commitment will you make to creating a culture and process to support it. If you don’t know where to start, or have questions on what process will work best for your goals, our forward obsession is just the perspective that can help you decide.
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