Innovating To Win

Connecting Innovation Dots

On his blog Medinnovation, Dr. Richard Reece discusses the interconnectedness of innovation across domains of innovation activity in this post.  It’s interesting to see his commentary on 10 coming medical innovations in this regard.  It is doubly so because this phenomenon is not unique to medical innovation.

Great and transformative innovation stem from the confluence of many different advances and observations.  The accumulation of knowledge into the global pool of information provides the water of life for innovation.  People seeking to find novel and valuable solutions to needs draw upon this fund of knowledge to synthesize new answers.  This is the act of innovation creativity in its pure form.

We should understand the consequence of this as it relates to driving sustainable innovation in the enterprise.  Knowledge worker need knowledge with which to work.  Connectedness to knowledge of all types is an essential ingredient to create the working environment needed to drive continuous, value creating innovation.  This must include seamless access to the enterprise’s internal knowledge, global knowledge from both inside and outside the company’s domain of expertise, and the tacit knowledge of team mates.

Have you ever noticed the degree of innovation serendipity?  It is not by chance that different people seem to be creating the same innovation at the same time.  Any really interesting, high value challenge is going to attract many potential innovators.  Don’t flatter yourself and think you are the only one working on your great project.  Also, many potential innovators have access to the same informational resources that you do.  This means there is a reasonable chance that when you find a great solution, you won’t be alone.

Yet, it is also the case that most potential innovators have the same poor access to knowledge that you do.  This means that you have an opportunity to create an innovation edge.  By investing in establishing the best innovation intelligence infrastructure—one that provides seamless access to all sources of knowledge when and how you need it—you can tilt the scales of innovation providence in your favor.

This is a key lesson that innovation leaders must take to heart.  You can influence the frequency and value of your innovation outcomes by making the right strategic investments in innovation infrastructure and methods.  As we begin to emerge from the past years of economic malaise, companies are all beginning to renew their innovation agenda.  Will you take the right steps to ensure that your innovation workers have the right tools to deliver the goods?

Five Reasons You Don’t Have the Time to Delay Innovation

“We just don’t have the time.”   How often have you heard this familiar refrain?  Just yesterday in a conversation with a leading company in the petro space, I heard a manager say, “We have a lot of stuff going on for the next two months.  I really want to get moving on innovation, but we don’t have any time to spare. I hope we can get to it in a couple months.”

If you are procrastinating with respect to innovation because you think you don’t have the time, think again.  Here are five reasons you can’t afford to delay your journey toward building a high-performance innovation organization.

Eat your own lunch before someone else does it for you.
The pace of innovation is getting faster in every industry.  Product teams that were stretching to meet 7 year delivery cycles are now being asked to compress the cycle to 3 years.  A few things that one can always count on in business are that markets evolve, requirements changes, and competitors are looking for ways to leverage these changes to their advantage.  If you are not looking at the ways in which your market and customer needs are evolving, the macro trends that influence these changes, and thinking about where these factors will converge in the future and what you need to do today to be positioned for that future, you are headed toward a serious business problem.

Eliminate business risks
Much of business success is about managing risks.  It is because of this that many people who don’t have a clear understanding of the power of innovation best practices will avoid pursuing innovation.  Unfortunately for them, this is wrong thinking.  Sustainable innovation practice is not about taking on greater risk, it’s about eliminating risks.  By doing the right things to identify and assess new opportunities, by using proven methods to drive aligned and precise opportunity and technology down selection processes, by pre-validating conceptual designs before moving them into downstream processes, companies are able to make better choices and invest with higher confidence that they are targeting the right product and market futures.

Saving time

“What may be done at any time will be done at no time.” – Scottish Proverb

If you are not integrating innovation best practices into you value creation and delivery processes, you are wasting time.  People waste time every time they pour effort into solving a problem that someone else in the organization has overcome.  Valuable time is wasted with each prototyping cycle that could have been avoided with proper feasibility analysis and validation in advance.  Time is lost when mistakes of the past are repeated for the umpteenth time.  Conversely, time is saved by using repeatable methods that drive speed to solution and identification of the optimal strategy the first time.  When you really look at the full scope of impact achievable through sustainable innovation, there is a net gain of resource time efficiency.  It is not an accident that high performance innovation companies seem to move so fast—they do.

Saving money
The net result of making the right choices, eliminating risks, and saving time through innovation is that you will be driving a more efficient and effective organization.  Your teams will be doing more with the same resource footprint.  Your company will be finding the lowest cost approaches to delivering the highest quality solutions for your markets.  This in turn will give you greater latitude to manage your strategic investments.

Making money
While there are cost saving benefits that companies derive from innovation, it is in the dimension of revenue, market share, and profits that innovation delivers its greatest benefits.  What is the value of successfully opening a new market?  What is the value of grabbing a couple points of market share from your biggest competitor?  What is the value impact of increasing your EPS?  How important is driving strong top line growth?  These questions speak directly to the impact point of successful innovation.  But while companies can occasionally stumble into successful innovation, driving corporate value over time requires being able to successfully innovate on a repeatable, sustainable basis.  This is the value of building a high performance innovation enterprise.

Why Companies Need Pervasive Innovation

It’s hard to keep up with all the articles on innovation these days.  There are so many outlets now where people are volunteering their experience and advice.  A lot of the advice is quiet good.  But, every now and then an article appears that assaults the senses like fingernails against a blackboard.  Such is the case with “Why Companies Need Less Innovation,” by Pat Lencioni which appeared in Bloomberg Businessweek.  I feel sorry for any company that takes this advice seriously.

In this article, the author begins with a very reasonable observation.  Many companies do a great job of talking up innovation, and then disenfranchise workers by not doing what is needed to establish a productive and sustainable innovation culture.  This is a horrible mistake that many executives make.  Simply proclaiming that your company is building an innovation culture doesn’t make it so.

Unfortunately, the article takes a very wrong turn.  Lencioni suggests that if workers are innovating, the result will be chaos.  What tripe!  Does Lencioni really misunderstand innovation so much as to equate innovation with workers gone wild abandoning their mission and acting on impulse?  One hopes not, yet this is the message that comes through.  Lencioni goes on to suggest that innovation should be the sole domain of the leadership team.

It is well understood that the ivory tower approach to innovation is a failed model.  The leadership team doesn’t have the full perspective to be the sole contributors to the process.  Yes, the leadership does have the best understanding of the company’s business needs and objectives.  And their position gives them a perspective that the rank and file employees can’t share.  But there are too many proof points that teach us that executives acting in such an insular manor are detached from the practical realities that the workers see every day.  There are equally many examples of companies benefiting greatly from worker led innovation.

The leadership needs to play an active role in the innovation process, and as Lencioni rightly points out, they need to set the innovation agenda and ensure alignment and execution.  However, it is a grave mistake to exclude the workforce from the innovation process.

Worried that innovating workers will cause disruption?  Don’t be.  Innovating doesn’t mean doing whatever strikes your fancy.  For rank and file workers, it means thinking about your job as you do it.  Asking yourself questions about what’s working and what’s not working.  If something’s not working, what could be done to correct it?  If something is working, could it be better?  These thoughts and analysis must then be given a path through the company’s innovation process so that positive change can be initiated.

Will every worker contribute a ton of ideas?  No.  But, building a constructive process to tap into the collective wisdom of the organization will yield strong benefits and fuel innovation.  It will not erode execution. Quite the contrary, it will lead to higher levels of execution.  As a senior manager, I will choose thinking workers over mindless robots every time.

Bottom line… Execution, passion, and focus are not in conflict with innovation.  Successful innovation requires brilliant innovation; winning business execution requires continuous innovation.

In Defense of Improvement

A colleague pointed out a post by Patrick Lefler that appeared on Chuck Frey’s Innovation Tools site this week.  In this article, Patrick proclaims that improvement is not innovation.  Of course, in the purest sense, the author is correct.  While all innovation seeks to deliver an improvement, not all improvements are innovative.  But, there is a very important aspect of improvement that, in his fervor to make his point, Patrick has ignored.

Coincidentally, I presented a webinar just yesterday on the topic of harnessing innovation creativity to drive corporate value.  One of the key points I touched on was the importance of incremental innovation.  Yes, incremental innovation is a good and necessary part of building a sustainable culture and environment for continuous innovation.

Breakthrough innovation, incremental innovation, minor improvement—these are all points on a continuum of value creating solution generation.  Incremental innovation is very beneficial to an organization trying to develop the core competence needed to support a high-performance innovation system.  Specifically, incremental innovation delivers both short and long term benefits.  In the short term, immediate business benefits can be realized—extended revenue life of a product, increased market share, better contribution to margin, etc.  In the long term, incremental innovation provides a low risk platform to hone the basic innovation skills needed for successful, repeatable breakthrough innovation practice.

This last point, honing basic innovation skills, is too often overlooked.  Most organizations lack these basic skills and the knowledge of innovation best practices.  These skills must be developed and practiced constantly.  Even seasoned innovation workers should take a page from Basketball legend Larry Bird’s play book.  Larry was well known for his work ethic and diligence in maintaining his skills.  He would arrive for a game hours before anyone else and warm up by taking hundreds of practice shots.

Efforts to improve, even modest ones, are opportunities to practice innovation thinking and skills.  The adept application of innovation practices can move a change further along the continuum of novelty and value creation so that what might have been a minor improvement becomes an incremental innovation that creates strong competitive differentiation.

So while Patrick is correct in the assertion that simple improvements are not innovations, one should not eschew incremental achievements.  In fact sometimes the road to breakthrough innovations is paved a brick at a time.  In my own research team where we are constantly pushing the limits and redefining the concept of the possible in the area of applied computational linguistics, we often use the expression “step by step” to describe the path to innovation success.

Of course, it’s important to remember that you must be constantly trying to reach further up the novelty-value ladder in order to find the breakthroughs that will provide you optimal market position.  But don’t forget to embrace incremental innovation, too.  It’s a good thing.

Innovation Roadblocks

I was talking to a senior level contributor in a company well known for its innovation capabilities.  He’s responsible for looking at ways to identify where knowledge exists within the human capital of the organization and figuring out ways to leverage that knowledge map for the benefit of the company.  His charter really sounds like a good way to take a strong innovation culture to the next level of performance.

As we were talking, he told me that he had struggled finding adopters of his findings in the company.  The people he talked to felt they already knew how to innovate and therefore weren’t that interested in exploring his ideas.  He was understandably frustrated.

As we talked, I explained to him some of the things my team had done recently in the areas of enabling the democratization of innovation and leveraging tribal knowledge through automatic expertise identification and personnel profile mapping.  Of course, this was right in the midst of his area of interest.  He said he wished he had access to this technology for his work.  Yet, when I asked if there some way we could partner to bring a powerful innovation accelerator to his company, the conversation took on a very different tone.

It wasn’t long before the truth emerged.  His interest wasn’t actually in bringing higher performance innovation to his organization at all.  He explained that if he was successful in deploying a combined solution in his company, it would be less likely that the company would allow him to start his own venture based on the work he had done while working at the company.

This was an interesting exchange in that it reveals the complexity that can underlie innovation barriers.  While this person had initially attributed the lack of interest in organization take up of his research findings to corporate hubris, it was clear that his own personal agenda was the major factor.  He didn’t actually want to succeed on the job because he perceived an opportunity for personal gain if he didn’t.  Yes, he had hit some internal resistance, but how motivated was he to actually overcome this obstacle?

This raises some interesting points for managers and innovation practitioners alike.  For the manager, it is important to ensure that employees who bring forward ideas feel their ideas are given real consideration.  Also, never create systems that incent employees to withhold the value of their work from the company.

For practitioners, a key lesson is to be aware that some people will have agendas that are not aligned with the organization’s goals.  Be on the lookout for these individual as they may be silent opponents of innovation.  Also, look in the mirror.  Are your motives aligned with the company’s objectives?  If not, why not?  If you can’t get aligned, you may be in the wrong position.

Innovation Brewing

Looking at the blog of Invention Machine’s CEO Mark Atkins, I am reminded that June is Innovation Month in New England.  There will be many fun and interesting innovation happenings throughout the region.  One of these is InnoBeer (short for Innovation Beer Summit).  When I organized the first InnoBeer event, I had no idea that it would become so popular.  Yet there have now been InnoBeer events in several locations in both the U.S. and Europe.

Recently, I had the opportunity to learn to make beer.  I joined a group of friends and together we brewed six varieties of beer.  There are innovation lessons to be learned from most things.  Here are some innovation lessons I took away from my beer making debut.

Science
There is science behind making beer.  Understanding what is happening in the process helps you achieve the desired results.  This is true for every domain in which I see people working in the trenches of innovation.  No matter what you are doing, there is a body of knowledge that precedes your efforts.  If you don’t have good access to this knowledge, you are destined to repeat the mistakes of the past and waste a lot of effort reinventing the wheel.  High performance innovation organizations understand the need to knowledge enable their innovation workers by providing them with the best, purposeful knowledge research and delivery systems.

Team
During our little beer making party, we brewed 6 varieties of beer in one evening (90 minute IPA, Summer Ale, Belgian Blonde, Vanilla Honey Porter, Oatmeal Stout, and Scottish Ale).  Getting it all done required teamwork and collaboration.  In business innovation practice this pressure to achieve high-value innovation outcomes with limited resources and time is de rigueur.   To achieve results requires the same type of committed and connected teamwork for innovation workers.  Companies seeking to maximize the effectiveness of their innovation workforce must employ innovation frameworks that connect people to one another when they need based on what they know.

Tools
Making our beer, we have at our disposal the right equipment to make the job easy and efficient: steam controlled boiling vats, wort cooling filters, automatic bottle sanitizers, etc.  Listening to others in our group recount the horror stories of making beer in their kitchens without these tools reminded me of what I see all too often walking into companies that have not begun to deploy state of the art innovation platform technology.  Innovation workers struggle to make sense of problems and find the fit between problem states and solution spaces.  Companies need to invest in providing their workers with the right tools and skills for innovation success.  Sure, you can start a fire rubbing sticks together; but why not give your teams modern torches and set them loose to burn up the competition.

Experience
Having the brew master watching over us made a huge difference.  He was able to tell us in advance what to pay attention to and how to ensure the quality of the final product we were producing.  Preserving, tapping into, and leveraging grey beard knowledge is a huge problem for many companies.  Make sure you have systems in place to harvest and disseminate this knowledge to empower your entire innovation workforce and enable the generational transference of your corporate tribal wisdom.

Immersion
My beer making experience was great.  One of the best aspects of the experience was its immersive nature.  While we were engaged in brewing or bottling, that was the focus of our activity.  There were no interruptions, no need to divert our attention and focus, no co-opting of resources by some other urgency.  Of course, we all have to deal with the realities of the real world when we are working in the trenches of innovation.  But, managers need to find the way to carve out protected time for innovation workers to focus on what’s important, not merely what seems urgent.  You have to willing to invest in your people, giving them the time to master and apply innovation best practices to their innovation tasks.  You will find this is an investment that will pay big dividends by both delivering the benefits of accelerated innovation and product delivery, but also greater per worker productivity.

The next InnoBeer tweetup is schedule for Tuesday, June 15th.  If you are in Boston, stop on by and join in the innovation conversation.  You can get details and sign up (free) here.

Field Notes – April 2010

It’s good to have a bit of time back in the office to catch up on things.  In April, I was travelling for over half of the month; visiting with innovation teams at companies in France, Germany, Japan, the United Kingdom, the Netherlands, and South Korea kept me away.  Meanwhile, we have some great innovation projects in our pipeline that I’m particularly anxious to dig into.

Yet, visiting with innovation practitioners from around the globe is a terrific way to gain insights and take a pulse on what is going on in the broader world of innovation.  Here are a few of my takeaways from my April travels.

Innovation momentum is growing.
As the global economic climate stabilizes, more and more companies are starting to look beyond the survival mode mentality that took hold in the fall of ’08.  These companies see that they now need to refuel their revenue generation engines with new and differentiated offerings to the market.  New products for existing and new audiences are viewed as key to building market share and driving top line growth.  Companies need innovation now, and they understand with the ever increasing pace of market change, they need continuous innovation.  There is broad consensus that innovation capability is one of the key competencies that will distinguish winners from losers in the years ahead.

Many companies are still just arriving to the innovation party.
The number of companies that have taken a serious look at innovation and taken concrete steps to build innovation as a value driving core competence is still small.  Most companies are just beginning to question whether there is a better way than relying on serendipity for their innovation.  This means that there is a big opportunity for companies to take the high ground and drive their organization forward through innovation while the competition is still trying to figure out which end is up.

Companies are acting on, not just thinking about, innovation deployment.
Those companies that have internalized the importance and high-value of repeatable innovation best practices are not sitting on their hands.  They are seriously pushing awareness, innovation skills development, and IT infrastructure to support their innovation mandates.  These companies also realize that while grassroots acceptance is important, a corporate innovation initiative will never deliver to its potential if it isn’t backed by a top-down mandate tied back to corporate objectives.  Innovation is about change.  Developing a sustainable innovation culture requires a change in the corporate psyche and hence requires serious attention and management focus.

Innovation delivers value to companies that take it seriously.
Innovation takes many forms, but it always creates value.  Everywhere I went, I heard stories of how using repeatable innovation methods had overcome challenges, expedited time to market, and raised the value of key projects within organizations.  At Samsung for example, I was shown a new model of refrigerator.  The manager showing me this refrigerator pointed out a key feature in the product that was blocked by a competitor’s patent.  Using the innovation skills they have mastered over the years, Samsung was able to create an alternative non-infringing design that allowed them to find freedom to operate and with it a fast path to market.

So, what does all this mean to you?  The bottom line is that now is the time to get moving when it comes to getting your innovation engine firing on all cylinders.  The companies that invest in innovation today will emerge as the leaders with new revenue driving products in the future and create new market differentiation.  While those companies that choose to wait on innovation will be left behind as the laggards in the new economy, never regaining the luster they lost in this most recent recession.

Which will you be: leader or laggard?

Finding Sense ( and Dollars) In The White Space

Spring is a time of change and transition, just right for reading a new book on innovation.  “Seizing The White Space” by Mark W. Johnson is the latest volume to come from Innosight, and seems to be right the right thing for spring reading.  It’s a highly readable and very quick to get through if your mind has already made the transition to summer; yet, it is has enough chewy content for those of us who are still want to curl up hearthside with an interesting book.

Johnson puts forth what he calls the four box business model to capture the dynamic tension between three key aspects of the value system underlying a business.  Yes, that’s right – four boxes to capture three key aspects.  These are:

Customer Value Proposition – What is it that customer derives value from when your offering is selected.  Of course, given the Christensen heritage of Innosight it comes as no surprise that Johnson returns to the job to be done jargon to talk about the value proposition.  Personally, I was just happy to see the value-prop called simply and directly what it is.  (Okay, I’m just weary of some authors who feel compelled to try and coin new jargon for what is already a well understood concept.)

Profit Formula – The strategy for monetization of the Customer Value Proposition.

Key Resources and Process – The things, people, and processes that are needed to deliver the Customer Value Proposition.  Johnson separates the concepts of resources and process in his representation.  Hence, the four boxes to represent three key aspects.

While these concepts may seem pretty basic, there are far too many companies that seem to forget that this system, and more importantly, the need to harmonize and balance these elements of the system exist.  Ignoring some of Clayton Christensen’s best advice (be patient on revenues, but impatient about profit) many companies attempting to claim a white space opportunity as their territory burn through loads of capital to try and drive the revenue engine only to dilute the share value so much that no one can hope to extract value from the venture.

Throughout “Seizing The White Space,”  Johnson uses many examples and comparisons of how these various elements interact in both successful and failed business models.  The examples help to bring to life what could otherwise be a very dry and boring domain of study.  You will need to filter some of the discussion through your analysis.  Some of the issues around the cases studies are open to interpretation.

After addressing the questions of when and how to look at business model innovation, Johnson reminds us of how existing demands and practice of a going concern can block the organizations ability to define and implement a new system to attack a white space opportunity.

I enjoyed “Seizing The White Space” and certainly recommend it as a worthwhile read for innovation practitioners or managers responsible for considering, planning for, or executing on new business platform opportunities.

This is the fifth stop on a virtual book tour for “Seizing The White Space.”  Earlier stops on the tour can be visited at:

Working Knowledge – Andrea Meyer’s excellent blog

Blogging Innovation – A multi-author innovation blog maintained by Braden Kelley

Innovate on Purpose – Jeffrey Phillips thoughtful blog on innovation strategy and practice

FastForward Blog – An Enterprise 2.0 blog where Jim McGee review the book 
 
Yet to come on the virtual book tour is Dan Keldsen’s interview with Mark Johnson which will appear on the  Information Architected blog.

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.

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.