The hot topic these days is innovation, whether I’m in conversation with relative newcomers or long-tenured companies trying to reinvent themselves. Everything is moving so quickly in markets and inside businesses today. This forces the obvious question of ‘How best to get and stay ahead?’ Innovation invariably becomes the answer – but what kind? How to do it well? How much to risk?
I see a few common mistakes companies make when they think about innovation:
1 – They speak about innovation monolithically. Like there is only one kind (and often the kind they don’t have!) Innovation can come in many forms and the key is to match the method to the objective.
2- They assume the ideas have to come from within. To be truly innovative ‘we’ have to come up with the concept; we have to invent and engineer. If you are paying any attention at all to the growth in crowd-sourcing you know this can’t possibly be true now, if it ever was. Sure there are the occasional geniuses that have an idea, design it, test it and grow it – but most of the mere mortals in business need some assistance.
3 – They believe that to be innovative you have to generate lots of ideas. I used to work with a guy that truly believed in the ‘let a thousand poppies bloom’ theory. What I learned from that experience, and it may already be obvious to you, is that a thousand ideas without any form, method to test and nurture them, or a disciplined way to evaluate them is a colossal waste of effort and resources. It is definitely not innovation.
So, great – it is easy to make innovation mistakes. How can you, if you really want to innovate, get started with some reasonable chance of success?
Let me take you to the intersection of customer experience and your performance chain. We’ll cross knowledge of your customers with your abilities to harness speed, predictability, flexibility and leverage to your innovation advantage.
Customer experiences start with a triggering need that customers will trade something of value to solve – that may be money, but also their time and trust. Opportunities to innovate start right there. What triggering needs bring customers to your organization today? Focusing on what you solve, not what you sell, will open up new ideas and opportunities. They may be extensions of current products or services, or entirely new concepts. From there, explore the other needs these same customers have, related or not. Identify the needs that with a little creativity, your company could solve. You already have earned their interest, some level of trust and probably collected some of their money. Use those relationships and allow your customers to help you innovate. At a minimum, use those relationships to direct you to promising concepts.
Now take a 90-degree right turn into your performance chain. Be critical and brutally honest with yourself. How close to your current business are these potential ideas? If they are very close – great! You can use the performance chain you already have to design, test, pilot, launch and grow innovative extensions. This kind of innovation process typically has to be low risk because you can’t afford to disrupt your current operations and you can’t afford a lot of failures clogging up the works. You need to take a hard look at your:
1 – Speed – can you test and adapt quickly enough to be successful
2 – Predictability – can you protect your quality and fulfillment on your current valuable business
3 – Flexibility – can you adapt quickly as you learn to execute the new concept
4 – Leverage – do you really have the right capacity, resources and skills to execute your current business AND the new products or services?
In many cases the answer will be yes and in those cases, push your performance chain to the max using your customer experience as your compass. If any of the answers are no, figure out how much innovation you can drive through your existing business. In many cases minor adjustments will give you the room you need to proceed.
What if solving the presenting customer need has requirements that do not match your current business? Then you need to take a different 90-degree turn to the left and consider a number of other innovation options. Maybe you need a skunk works team, completely divorced from your day-to-day business. Maybe you’d be best served aligning with another organization that has complementary capabilities that together with yours, give you a new path to experimentation.
Maybe the need is great enough that you would be best served innovating through corporate venture capital investments much like a VC firm would invest in new ideas. Any of these alternatives require new thinking about performance chain requirements.
Speed may be paramount as in the notion of ‘fail fast.’
Predictability may only be valuable after you prove the concept has legs and you’re working on scale.
Flexibility is possibly your most valuable capability. It will keep you from locking in prematurely, until you’ve had lots of test and failures and have learned what works.
Leverage may be more about your customers, other organizations’ capabilities and cash than dependence on your own performance chain.
Every organization is capable of innovation. You are at the traffic light and customers are moving past you with their many and interesting needs. Will you go left, or right? It’s your turn to move – your light is green. Go!
Note: Photo courtesy of Tony Gowler via FlickR Creative Commons.s
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