Innovating To Win

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.

Collaboration For Innovation: Why Can’t We All Work Together?

A recent article on ComputerWeekly.com noted that 80% of CIOs are increasing their investments in collaboration tools.  At the same time, many organizations are struggling with restrictions on which tools may be used.

For corporation innovation initiatives, this is an important issue.  Building a strong culture of collaboration is vital to fostering productive innovation.  To help build a healthy, sustainable innovation ecosystem in the enterprise employees must be provided with an environment that equips them with the proper skills, tools, and knowledge resources to improve their effectiveness.  Included in this support must be a practical framework for collaboration around innovation.

Too often, companies tend to build organizational silos that cut workers off from key information and from each other.  This is anathema to innovation.

Innovation thrives when knowledge flows through the enterprise to the workers that need it.  This knowledge is often not documented, residing in the minds of the workers.  This is why it is essential to enable the connection of people to people based on what they know.  The right collaboration framework can help make this happen.

Conversely, the wrong framework can create frustration as workers feel it is difficult to connect and share knowledge and leverage that knowledge in their work.  Many employees find that tools are not compatible and that it is difficult to capture their collaborative exchanges in a meaningful way that can leveraged.

A good collaboration framework is one that enables employees to connect without the need to leave the context of their innovation work.  The framework should make it easy to integrate the discussion into the innovation process and capture the tacit knowledge of the enterprise for reuse.  It must be simple for workers to engage with one another if you are truly going to unlock the value of the organization’s tribal wisdom.

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.”