Most pundits agree, if companies want to be long-lived, they need to foster continual innovation. In their quest to be innovative, many companies unsuccessfully search for a golden path to innovation — a process that will guarantee both short- and long-term success. Truth be told, there is no single golden path to innovation. According to Boston Consulting Group (BCG) managing directors, Michael Ringel, Andrew Taylor, and Hadi Zablit, the most innovative companies pursue a multitude of strategies. They explain, “Self-described strong innovators in BCG’s 2016 global survey on the state of innovation are far more likely than the self-described weak innovators to cast a wide net as they look for potential innovations.”[1] Greg Satell (@Digitaltonto), an innovation consultant, adds, “In researching my book, Mapping Innovation, I found that every innovation strategy fails eventually, because innovation is, at its core, about solving problems — and there are as many ways to innovate as there are types of problems to solve. There is no one ‘true’ path to innovation.”[2]
Insight and Innovation
Melissa Fleming (@mjofleming) asks, “What is innovation?”[3] That’s a fair question. She adds, “While business leaders agree it is essential to future growth and survival, they do not necessarily agree on its definition.” My preferred definition of innovation is contained in the innovation formula, which is: innovation = new x valuable x realized. If any of those variables is zero, there is no innovation. A new idea is not innovative unless it is implemented. Fleming writes, “Trouble is, there’s no single method, tool or product that an innovator can introduce that will lead to a breakthrough, and there’s no single quality that an innovator must possess to be successful. And yet being innovative — creating extraordinary change and finding unexpected solutions — is the key to unlocking the future of any business.”
At this point, you might think innovation relies primarily on serendipity. Serendipity has played an important role through the years, but, no company can base its future on a strategy of luck. The BCG analysts report that innovative companies invest in research. According to their findings, innovative companies are “substantially better at using multiple data sources — not just their own but also external sources such as global patents, scientific literature, semantic networks, and venture funding databases.” A cognitive computing platform could be of particular value in that kind of broad-based research since it can find patterns, make connections, and provide insights. The BCG analysts add, “Moreover, strong innovators use external data in multiple phases of the innovation process, from identifying promising new ideas to making investment decisions.” In addition to research, they indicate that innovative companies “are adept at leveraging external innovation for many purposes.” Those purposes include:
- Finding the next big thing
- Avoiding disruption by unearthing emerging technologies and innovation trends
- Linking with startups and leading inventors to accelerate innovation
- Building networks of collaborators to stay on top of leading-edge technology
- Assessing the impact of new technologies on the business
- Identifying adjacent growth opportunities
- Attaining a position of technology leadership
Satell asserts, “When you have a really tough problem, it often helps to expand skill domains beyond specialists in a single field. Many believe it is just these kinds of unlikely combinations that are key to coming up with breakthroughs.” Frans Johansson believes this kind of collaboration results in what he calls “the Medici Effect.” The effect is named after the wealthy and powerful Italian family that played an important role during the Renaissance. The family’s wealth permitted it to support artists, philosophers, theologians, and scientists, whose combined intellect helped burst the historical pall known as the Dark Ages.
Idea Implementation
Gathering insights and generating great ideas are only the first steps towards innovation (i.e., the implementation of those ideas). Loic Sadoulet, INSEAD Affiliate Professor of Economics, and Jean-Marc Frangos, Managing Director of External Innovation at British Telecom, outline a five-step process that begins with generating ideas and culminates with implementation.[4] Those steps are:
1. Generate ideas: “The first step for any innovation group is identifying new ideas – whether it’s technology, services or the way a company operates its business.” Sadoulet and Frangos agree that diversified teams should be involved in this step. They talk about teaming with “VCs, start-ups, academics, customers and competitors.”
2. Prioritize opportunities: “The second step is screening the ideas. Sorting and prioritizing is an essential part of the process to make sure time is spent only on innovations which show the most potential.” Even though a winnowing process is essential to idea implementation, using too fine of a filter too early in the process could be detrimental. Fleming notes, “Not only do innovators tend to see what others do not but they also forge ahead because they are able to challenge the way things have always been done.” Too often filters reinforce the way things have always been done.
3. Visualize the new product or service: “The ideas are then translated into early-stage working prototypes which will give relevant business heads an immediate understanding of the potential customer experience and benefits. … They prove the technical feasibility and can help to sell the concept internally, building confidence within units for a particular offering by identifying and addressing any problems or ‘show-stoppers’. Feedback on a prototype refines the proposition and helps all parties learn more about implementation.” At Enterra Solutions®, we use a crawl, walk, run approach when implementing a new solution for a client. This approach not only proves the technical feasibility of the solution it allows the solution to be tweaked along the way using client inputs.
4. Inspire and sell: “Through live demonstrations, presentations, videos and informative discussions the company explores how it can best use the new technology or services to address customers’ key objectives.” In other words, you show the client he has a problem and you have the solution. Harvard Business School professor Clayton Christensen (@claychristensen) calls this the Theory of Jobs to Be Done.[5] According to Christensen the theory helps companies understand their customers’ struggle for progress and then creates the right solution and attendant set of experiences to ensure customers’ problems are solved. If you didn’t do this in the first three steps, you’re going to have a difficult time with step four.
5. Accelerate and build. “If the proposal gets the go-ahead it is time to bring everyone together for rapid acceleration.” Scalability can be a big challenge, especially for start-up firms. Partnering with a larger, established company may be the best available strategy to use.
Although these steps are fairly universal, processes involved in these steps are anything but universal. As Satell concludes, “We need to start treating innovation like other business disciplines — as a set of tools that are designed to accomplish specific objectives. Just as we wouldn’t rely on a single marketing tactic or a single source of financing for the entire life of an organization, we need to build up a portfolio of innovation strategies designed for specific tasks.”
Footnotes
[1] Michael Ringel, Andrew Taylor, and Hadi Zablit, “Casting a Wide Innovation Net,” bcg.perspectives, 12 January 2017.
[2] Greg Satell, “The 4 Types of Innovation and the Problems They Solve,” Harvard Business Review, 21 June 2017.
[3] Melissa Fleming, “6 Innovation Insights Your Company Can Embrace,” YPO, 6 February 2017.
[4] Loic Sadoulet and Jean-Marc Frangos, “Five Steps to Embed Cutting-Edge Innovation,” INSEAD Knowledge, 30 May 2017.
[5] Stephen DeAngelis, “Clay Christensen: At the Intersection of Innovation and Targeted Marketing,” Enterra Insights, 16 November 2016.
