Innovating To Win

Innovation Without Representation

As I was pulling out of the Government Center Garage the other night, I noticed an interesting license plate on the car ahead of me.  The Washington, D.C. plate sported the phrase, “Taxation Without Representation.”  This is a phrase that has a great deal of meaning in the United States.  It was an early call to action in revolutionary times, and it is still called upon from time to time to remind us of one of the fundamental values upon which this country was founded.

At first, seeing that license plate made me think of the current political climate we are experiencing, and I couldn’t help but think of the brazen irony of some of our legislators driving around with this declaration affixed to their automobiles.  But, then my thoughts drifted back to the world of innovation and the wisdom this expression holds for innovation practitioner and leaders.

How many times have you heard a colleague complain that management won’t listen to their great idea?  How many times have you seen a product launched that was greeted with a great collective yawn by the targeted customers?  How is that these think headed managers and customers don’t get it?  Or, does the fault lie in the failure of the innovator to listen to will of the people?

Anyone who is an innovation professional must recognize that they serve constituencies too.  The goal of innovation is to deliver value to customers.  More broadly, innovation must deliver value to all constituencies involved in the value creation and delivery chain.  This value must be perceived as significantly greater than the tax we extract from our constituencies.  Yes, that’s right.  By engaging in the pursuit of innovation, we are taxing our constituencies.

For management, the tax come in the form of funding of initiatives, resource costs, assumption of risks, and opportunity cost.  These can be very high hurdles for the innovator to get over.  If you try to run this gauntlet armed only with an idea, you will most like find yourself in a very uncomfortable position as you topple over one of the many hurdles.  Approach management with a full complement of data addressing these concerns and showing the value generation for the company and you are much more likely to find executive sponsorship.

For customers, the tax is the need to change to what they are used to doing.  This need to change is often accompanied by an uplift in price as we try to monetize the value of the innovation.  Needless to say, these taxes can be an impediment to the adoption of innovation.  Yet, there are countless times that I have seen companies forging ahead with new products, services, or business paradigms without really understanding what the people who vote with their pocketbooks need and want.

It’s not hard to see how these examples can be extended to all the groups involved in and with our efforts to innovate.  Setting aside our own belief in the brilliance of our concepts, it is not difficult to understand how we are destined to fail in our attempts to open new possibilities through our innovations if we don’t first understand all the constituencies that we touch along the way.  Understanding these constraints should be among our first tasks in planning for innovation.

To reframe that famous statement of James Otis, innovation without representation is tyranny.

How’s That Hope Thing Workin’ For Ya?

Well, okay… I admit that I’m annoyed.  When Obama was swept into office, the winds of change seemed an unstoppable force, and many likened Obama to JFK.  Now, Obama has distanced himself from JFK by essentially scuttling the programs that are a lingering part of the JFK legacy.  He has decided to discontinue NASA programs around the space shuttle and lunar exploration.
 
So you could say, “So what; do we really care about that stuff?”  Some might even make some good arguments for why these programs should be dropped.  But, here’s why you should care.

The fact is that there is little governments actually do that doesn’t in some way hurt the cause of innovation.  If you don’t believe that statement, just take a look at the evidence of history.  Even when governments try to do the right thing, they usually step on innovation along the way.  Consider what happens when a new safety standard is put in place for consumer protection.  The standard is often adopted from existing industrial practice as promoted by the organization with the best lobbyists.  The net result is that barriers to new competition are erected and the status quo is codified.  When the current administration channels big dollars to solar energy research, they in effect pick the winners and losers of technology and divert private funding away from other innovative energy strategies.

One of the few things that government does that actually helps the march of innovation is provide funding for basic and applied research that private industry isn’t focused on.  This is fundamentally of value to future innovation because a big part of the innovation equation is the application of knowledge to creating high-value solutions to market needs.  But, solutions come from existing knowledge.  Government funded research contributed to the fund of knowledge that is available to innovators.  Every time the boundaries of our human experience and scientific knowledge are extended through programs like the NASA programs which are slated to be killed, our global “box” is expanded, and our potential to solve new problems and find new game-changing innovations is enhanced.

Sure, not every program or endeavor can or should be funded indefinitely.  But, I believe there is still tremendous potential in these specific programs.  The decisions represented in Obama’s 2011 budget are a clear setback for global innovation and should send a shiver down the spine of all of us.

Innovation - Getting It and Getting It Done

As with most things, when it comes to innovation there is a huge difference between getting it and getting it done.  Everyone wants to get it; but the rewards of innovation are only enjoyed by those who get it done.

There is a great confluence of pressures today that are raising both awareness and understanding of need to drive product and service development through innovation.  Executives are talking about innovation more than ever before.  When they talk, they convey an understanding of innovation’s value, and they certainly look ready to act.  But the gulf between words and action is as wide as ever.

Recently, I saw a bit of interview footage in which Martina Navratilova was talking about her dominance of women’s tennis in the ‘80s.  She remarked that the big secret to her success was that she was the only woman player at the time who was putting the level of effort into training that she was doing.  What a powerful statement that is.  One that is also relevant to the business of innovation.

It is not enough to get innovation; you have to get it done.  Whether you are in management or you are an innovation practitioner, you need to be doing the things every day that drive innovation success.  Stop worrying about if you are talking about innovation enough, and focus instead on innovation execution.  How do you know if you are on the road to closing the gap between innovation thought and action?  Here are some simple question to ask yourself about your contribution to making repeatable, high-value innovation a reality for your company.

For practitioners:

• Are you integrating innovation practices into your daily routine?
• Are you using technology to harness internal & external knowledge resources to expand your box?
• Are you collaborating with all constituencies in your innovation environment?
• Are you consistently creating value through your innovation efforts?
• Are you effectively communicating the ROI on innovation to management?

For management:

• Are you actively engaged in supporting and promoting innovation in the enterprise?
• Are you making the needed investments in people and tools to build innovation competence?
• Are you ensuring the alignment of corporate objectives and innovation strategy?
• Recognizing and rewarding innovation contributors?
• Encouraging people to practice innovation techniques in all they do, every day?

If you can answer yes to all these questions, you are on your way.  If not, you need to ask one more vital question: “Why am I not committed to driving corporate value through innovation?”

Close the gulf between desire and outcome.  Turn you innovation dream into action.

Boyd on Linking Strategy and Innovation

I read a nice post on Drew Boyd’s blog, Innovation in Practice, discussion the idea of linking innovation with company strategy.  In it, Drew discusses two models of interaction between company strategy and innovation:

Strategy informs innovation – in this model the company defines a strategy, then innovation efforts are pursued to find way to deliver on and enhance the value of the strategy;

Innovation informs strategy – in this model, innovation activity first generates scads of potential concepts which are subsequently mapped to a strategic evaluation model to select the innovation path that builds the optimal strategy.

Whichever approach you select, it is critical that your corporate strategy and innovation efforts are aligned.  Without alignment, you have no chance of achieving the level of execution required for successful innovation delivery.

However, I would like to highlight a third model: Innovation and Strategy inform each other.  In other words, you are only looking at half of the picture if the dialogue between strategy and innovation is a one way exchange. 

If you are responsible for strategy, you don’t want to lament “Gee, if I’d only known that was an option I would have set that as a strategic goal.”  As an innovation practitioner, you hate saying “Gee, if I had only known that was important, I could have helped achieve that objective.”

Optimal value is achieved through an on-going dialogue between these two drivers of corporate value.

Where to Open Innovation?

Right after I gave a talk at the Open Innovation Summit in Orlando on overcoming some key obstacles of open innovation, I had the chance to talk with Business Week’s Michael Arndt.  We had a great chat about future innovation trends, arenas to watch in the next 5-10 years, and the global dynamics of innovation.  A few of my comments appeared on Michael’s blog.

It is always interesting to see the reactions when a comment hits a nerve, and so it was that some rather vocal responses were elicited by my statement that the pendulum of favor for open innovation was beginning to return to the center.  Of course, it could be said I was drawing fire by saying that at an open innovation conference.

There is no question that open innovation brings value to many organizations, and open innovation is here to stay as part of the available tools and methods to formalize innovation practice.  However, there is no denying the hype around open innovation has built expectations to a point beyond the reality experienced by most companies.  Yes, there are some companies that have great success stories to showcase like Proctor & Gamble.  But, there are far more companies that are frustrated by the lack of results they are getting from their forays into open innovation.  This was expressed recently in the results of an Innovating To Win opinion poll.  To see how this sentiment is visible in the press, take a look at the recent Forbes article, “The Myth of Crowdsourcing.”   Companies feeling this frustration are learning about the challenges of open innovation and reassessing how to strike the right balance for their organization.

This shift can take many forms, but it generally includes recognition of some key aspects of the innovation process that must be internalized.  Is this a long term trend?  I suspect so given the strategic nature of innovation—innovation is just too fundamentally important for business success.  For an interesting view on what this could mean here is some commentary that appeared in TechCrunch by Sarah Lacy based on her interview with Shai Agassi.

The bottom line is that companies must use all the innovation tools that are available to them to compete in today’s rapidly changing environment.  This includes open innovation methods.  But, one size does not fit all when it comes to open innovation.  The approach that works for one company may not be a good fit for you given the dynamics of your market and company.  You will need to consider how to best integrate external constituencies into your innovation process, and how to keep control over your destiny and value by identifying which parts of the innovation process are your value-add.  Here is a podcast where Vincent Lyons of Leggett & Platt discusses how they have approached this issue.

Also, pay attention to the most common problem areas of open innovation: alignment, authority, and actualization, and use sustainable best innovation practices to address them.  In this way, open innovation will deliver value to your company.

Looking For The Innovation Silver Lining In 2010

As we begin 2010, I think it’s a great time to mention “The Silver Lining” by Scott D. Anthony.  The book which bills itself as “An Innovation Playbook for Uncertain Times,” touches on some very important themes that we should all keep in the forefront of our thinking if we are to maximize the potential of the innovation opportunity that are ahead.

This is a nicely written and very readable book in which Anthony reviews key innovation concepts that are always important, but especially so as companies find themselves challenged by a difficult environment.  Although some signs suggest improvements in the general business climate, we aren’t out of the woods yet, and the moves made by companies during transitional periods like this are particularly important.  So, the lessons of “The Silver Lining” are even more on point now than they were six or nine months ago.

Some of the key concepts addressed by Anthony include:

Focus – Or as Anthony puts it, pruning prudently.  He discussed how to identify what’s not going to be a winner and also how to identify where to invest in strategic experiments.

Using innovation to improve margin – This is a major area as companies need to continue to find ways to deliver bottom line performance in top line challenged times.  The techniques of simple tuning that yield incremental saving are no longer adequate.  For today’s needs, you need innovations that will drive new cost profiles.

Improving innovation productivity – Let’s face it.  Most organizations have a pretty bleak track record when it comes to innovation.  The generally poor state of innovation productivity is captured in the commonly cited statistic that it requires 3000 ideas to generate a single successful product launch.  Companies can and should do much better than this.  Anthony explores some strategies to begin moving down a path of higher innovation productivity.  He also makes a case for making innovation repeatable & sustainable in the enterprise.  This is essential for an organization to reach its potential.

Sharing the load – The need to open up the innovation process and integrate all of a company’s innovation constituencies into the process is presented.

Emerging markets – There is no arguing the dominance of emerging economies when we consider growth opportunities.  But, products developed for established primary economies don’t align with the new math of global economics.  Companies need must redefine products to fit a different economic paradigm.

My only complaint is Scott’s annoying attempt to coin the phrase “The Great Disruption” to describe the challenging business climate.  It really has no relevance in the discussion and has no real tie back to the terminology of disruptive innovation, so it just leaves an unpleasant taste in your mouth.

But, that is a minor discordant note in a book that otherwise keeps true to an important melody.  I highly recommend the “The Silver Lining.”

Innovation Chickens and Eggs

Just before I left for my end of year holiday, there was an interesting post on Bruce Nussbaum’s BusinessWeek NussbaumOnDesign blog.  It mentioned a recent statement by Don Norman, a key leader in Design, in which he had stated that innovation is driven by technology and science rather than design’s focus on peoples’ needs.  This initiated an interesting discussion that even saw Don Norman weighing in.

I suppose that I should be pleased by such a pronouncement.  After all, my own background is from the science & technology side of things, and more than once I have found myself annoyed by thick-headed design bigots espousing fanciful ideas about design being the only thing that matters or that innovation cannot be planned.  But on the contrary, I find that the esteemed Mr. Norman is wrong.

Does that mean that it is design that drives innovation?  No.  Rather, science & technology and design are two equally important ingredients in successful, sustainable innovation.

Strangely in his comment on Nussbaum’s blog, Norman makes the rather absurd claim that need follows the existence of technology.  Looking at the examples cited, it is easy to see how laughable this argument is.  Norman states, “The need for communication devices (telegraph, telephone, radio, cellphone, internet, postal mail, email) came after the technologies made them possible.”  I doubt that Norman can be so naïve as to thinks this is a credible statement. 

The need to communicate existed before and independently of the vehicles of communication.  As human social conditions evolved, so too did the demand for communication efficiency evolve along various measures.  People made due with the technologies available because they did not imagine that alternatives could be available.  At times, these limitations placed constraints on other aspects of societal evolution.  Naturally, the science and technology needed to enable new modes and models of communication evolved to meet the latent need.  These technologies were not adopted because they existed, but because the need existed to drive the adoption.  The fact that no one stood up and said, “Boy, a Blackberry would sure make my life easier,” in 1950, does not imply that the need case for the device did not exist.

Yes, it is sometimes very difficult to identify the latent need before it is expressed.  But, it is there.  Yes, the enablement of a solution requires the science & technology foundation to make the solution possible.  But, absent a need, the invention is little more than a curiosity.

Successful innovation responds to a need (design influence); successful innovation delivers a novel solution (science & technology influence).  Design leads us to understanding how to marry capability to need in a way that creates value; the language of capability is defined and expanded through invention in science & technology.  Thus, it is that the intersection of design and technology is the wellspring of innovation.

Looking Ahead To A Good Year Of Innovation

I don’t like to wish time away, but I am glad to see 2009 is behind us.  It was a very challenging year thanks to one of the worst financial climates in decades.  No thanks to the blind squirrels in Washington, some hopeful signs that the worst is behind can be seen.  Let’s all hope that these signs are true indicators of an upward trend for 2010.

Looking back to 2009, it was a challenging but good year from my point of view.  What made it good?  Simply, the financial stresses and practical realities of the recessionary climate made the strategic importance of innovation palpable to businesses globally.  As a result, the conversation in many companies has moved beyond “We should do something about innovation,” to “How do we do something about innovation?”  Better still, many companies have taken concrete steps to transform themselves by moving down a path toward instilling innovation capabilities as a core competence.

The momentum for innovation that was built in 2009 should now translate into tangible action in 2010 as the climate for investment improves with companies slowly becoming more bullish about the prospects for the New Year.  Already, I see many signs among the global companies which I talk to that suggest this is a growing trend for this year.

In my own organization, this scenario has been mirroring the global trend.  In 2009, we took the change in global business climate as a sign that it was time to change the game, and so it was that we introduced game changing innovations in our products to help our global customers drive their own innovation initiatives even faster.  Looking forward to 2010, we are again undertaking many innovation projects that are redefining the limits of what is possible.  It’s shaping up to be a very exciting year.

What does the year ahead hold for you?  I’d love to hear about it.  While you’re at it, please take a moment to vote in the Vizu poll on this blog (look to your left) where the current polling question is: “V recession or double dip, what does the climate for innovation activity look like for your organization in 2010?”

Is Twitter Twend Twailing Off?

At the recent Open Innovation Summit, along with the many great speakers there was a host of blogger correspondents providing real-time coverage of the conference via Twitter (@AndreaMeyer, @bhc3, @innovate, @IPStrategist, @lindegaard, @Renee_Innosight – sorry if I forgot anyone).  This is becoming a very common occurrence.  So much so that one blogger opined, “If a conference isn’t Tweeted, did it really happen?”

However, what I found interesting wasn’t the great Twitter coverage, but the conversation about Twitter that I heard in the hallways.  While most people in media or marketing positions would say that Twitter is invaluable, there seemed to be a lot of contrarian comments from people with different orientations.  Many people echoed the opinion of Ric Merrifield, Business Architect at Microsoft, who stated, “I’m not sold on Twitter.”  Ric is definitely not alone, and I have to admit to being among the skeptics.  I am active on Twitter because I feel it is an important experiment in social media that I want to take part in.  But this use motivation isn’t conducive to long term viability of a user community.

Recently, eMarketer reported that several research firms were reporting declines in the estimates of unique visitors in the US.  Nielsen Online estimated the drop from September to October was 27.8%.  Is this a blip in had previously been a meteoric rise, or a sign of things to come?  What do you think?

Field Notes – November 2009

Coming off my company’s global user conference, I started November with a two week, round the world trip visiting clients and partners in nine cities and six countries (France, Germany, U.K., China, South Korea, and Japan).  Trips like this are great because they provide the opportunity to touch a broad cross section of industry, geography, and culture in the context of business and innovation.

Here are a few of the observations that I gleaned during these two weeks.

Companies are looking to the future
2009 has been an especially difficult year.  It began with concerns of slipping into a global depression, and as it draws to a close many are still speculating on the possibility of a double dip recession.  This all translated into a tough business climate where many companies aggressively cut expenses to maintain their financial performance.  Companies that are true leaders found ways to do this while maintaining their commitment to innovation.  Others back-burnered innovation for while.  Those that kept up their investments in the future are feeling very good about their position as we head into 2010.  Those that slowed down are now trying to ramp up and catch up.  If you haven’t been investing in innovation during the crisis, you had better figure out a go forward strategy to make up for lost time.  If you did invest, now is the time to redouble your efforts to capitalize on the advantage you have created and turn it into lasting market dominance.

More companies are beginning to understand the need to empower workers for innovation
Companies have found during this time that having smart people isn’t enough.  Everyone has smart people; your smart people are probably just average.  Innovation is hard.  Innovation stretches the organization and the people who it comprises.  In order to make innovation a corporate competency and a competitive differentiator, you must equip people with the tools for success.  This means investing in skills development and infrastructure to create the environment needed to drive innovation.

The gap between potential and realization can be wide
We all hear about the looming dominance of China in the future global economy.  We also hear about the innovation engine that is China.  Yet when I visit companies in China, the indicators suggest there is a long path of maturation that must be traversed before China will reach its innovation potential.  There are two primary indicators that lead me to say this.  First, companies consistently point to government policies that direct and constrain their investment and vision.  This climate must change to allow the intellectual freedom needed for a truly innovation oriented culture.  Second, the pervasiveness of dialectic materialism in Chinese thinking appears to have led to some unfortunate consequences.  Talking with Chinese business leaders, I found they would give any Missourian a run for their money when it comes to needing to see hard, tangible proof of a path before they will be willing to walk down the path.  This mindset is not always open to innovative ideas.  It also manifests in how product planners think of new product creation to the extent that at one company, they proudly show a presentation on their new product development method which began with “Step 1: Reverse engineer competitor product.”

Size isn’t everything
We don’t always think of South Korea as an innovation powerhouse, but in truth there are some top flight companies in this country including Samsung, Hyundai, LG, and Posco.  From what I see, these organizations get it.  They are investing in innovation.  They are working to establish a strong innovation culture.  They are building the infrastructure and processes to drive repeatable, sustainable innovation.  Their results reflect this.  We can all learn from their example.

The compelling need to connect with knowledge
A recurring theme in talking with the innovation leaders at global companies is the need to have integrated leverage of knowledge throughout the innovation value creation process.  This includes tapping into both the organization’s stores of information and global information.  However, an often overlooked resource is the undocumented knowledge in the enterprise.  Organizations understand the need to harness the power of this resource.  Consequently, they not only want to connect knowledge workers with information, they want to connect workers with each other based on what they know.  If you are designing your innovation infrastructure don’t forget to consider this need.