Being right keeps us in place. Being wrong forces us to explore. An awesome quote from Steven Johnson. Do you sometimes wonder why there is less mission innovation success than you might have expected?
One of the things I always get asked about from the companies I work with is how to manage their innovation resources. Should they bet big on an unproven, but possibly breakthrough idea? Or focus on improving the products that they already know their customers want? Or maybe leveraging existing resources into a new market?
This is an important question. As Steve Blank pointed out in an article in Harvard Business Review, it was the failure to deal with this issue that led to many of General Electric’s problems. The company became so focused on “disruptive opportunities” that it let execution slip.
In the 1960s, the federal government accounted for more than 60% of all research funding, yet by 2016 that had fallen to just over 20%. During the same time, businesses’ share of R&D investment more than doubled from about 30% to almost 70%. The government’s role in US innovation, it seems, has greatly diminished.
Yet new research suggests that the opposite is actually true. Analyzing all patents since 1926, researchers found that the number of patents that relied on government support has risen from 12% in the 1980s to almost 30% today. Interestingly, the same research found that startups benefitted the most from government research.
One of the most often repeated stories about innovation is that of Alexander Fleming who, returning from his summer holiday in 1928, found that his bacterial cultures were contaminated by a strange mold. Yet instead of throwing away his work, he decided to study the mold instead and discovered penicillin.
What’s often left out is that it wasn’t Fleming who developed penicillin into a miracle drug. In fact, it wasn’t until a decade later that a team led by Howard Florey and Ernst Chain rediscovered Fleming’s work and, collaborating with several labs in the United States, ushered in the new era of antibiotics.
We often hear from our clients that things are working; therefore they are reluctant to change. That is a dangerous strategy.
In any successful organization, many things are working, or it wouldn’t be a going concern. So it’s not surprising that people want to sustain that success.
That simple impulse to keep what’s working can produce decisions that can slow or halt creativity and mission innovation. A new idea that doesn’t quite fit with prior assumptions often is quickly set aside.
Mistakes are seen as problems that must be fixed to restore the organization’s smooth functioning.
Check out these thoughts on business innovation.
It’s all very logical and well-intended, but the effect is to resist any substantial change, gradually eroding the capacity for creative ideas and innovation and even actively opposing them.
Innovative companies understand this and take action to overcome these tendencies. They continually track their customers and competitors to detect signals that may point to needed changes quickly.
Thoughtful experimentation is encouraged, not only as a way to test new ideas but to maintain the organization’s proficiency in implementing new ideas.
There’s an awareness of the need to promote continual adaptation, rather than simply protect what’s working.
Yet, what is really needed is basic curiosity – the desire to learn things rather than to know things. All too often, we strive to rattle off facts rather than promote understanding.
With a little imagination and some thought, we can all do our little part to increase the overall knowledge of the world. True knowledge begins with wonder.
The truth is that there are many paths to innovation. Here are eight of them.
Mission innovation … employ crowdsourcing to expand the number of ideas
When Microsoft launched Kinect for the Xbox in 2010, it quickly became the hottest consumer device ever, selling 8 million units in just the first two months. Almost immediately, hackers began altering its capabilities to do things that Microsoft never intended.
Instead of asking them to stop, it embraced the hackers, quickly releasing a software development kit to help them along.
Like Microsoft, many firms today are embracing open innovation to expand capabilities. Cisco outfoxed Lucent not by developing the technology itself, but by smartly acquiring start-ups.
Procter & Gamble has found great success with its Connect and Develop program, and platforms like Innocentive allow firms to expose thorny problems to a more diverse skill set.
As was the case with Alexander Fleming and penicillin, most firms will find that solving their most important problems will require the skills and expertise they don’t have.
That means that, at some point, they will need to utilize partners and platforms to go beyond their internal capabilities of technology and talent.
Connect the unconnected
The reason that Fleming was unable to bring Penicillin to market was that, as a biologist, he lacked many of the requisite skills.
It wasn’t until a decade later that two chemists, Howard Florey, and Ernst Boris Chain, picked up the problem and were able to synthesize penicillin.
Even then, it took people with additional expertise in fermentation and manufacturing to turn it into the miracle cure we know today.
This isn’t the exception, but the norm. Darwin’s theory of natural selection borrowed ideas from Thomas Malthus, an economist, and Charles Lyell, a geologist.
Watson and Crick’s discovery of DNA was not achieved by simply plowing away at the lab, but by incorporating discoveries in biology, chemistry and x-ray diffraction to inform their model building.
Great innovation almost never occurs within one field of expertise but is almost invariably the product of synthesis across domains.
Innovation is exciting, with lots of big ideas and big personalities. People like Steve Jobs, Jeff Bezos, and the Google guys have become modern Olympians and, just like Greek gods, we follow their triumphs and tragedies.
However, although innovation is a big word, it’s also a messy business, full of blind alleys and red herrings. It’s more of a drunkard’s walk than a linear path; not like in the movies where someone says “aha!” and they’re off to the races.
Innovation, in other words, is hard work only made harder by the fact that you never really know where you’re going until you get there.
When you’re a marketer, it’s even more difficult because there’s so much noise about “shiny objects” that it’s tough to cut through the clutter.
Collaboration is key
Alexander Fleming discovered penicillin in 1928, but it wasn’t until 15 years later, in 1943, that the miracle drug came into widespread use.
Alan Turing came up with the idea of a universal computer in 1936, but it wasn’t until 1946 that one was built and not until the 1990’s that computers began to impact productivity statistics.
We tend to think of innovation as arising from a single brilliant flash of insight, but the truth is that it is a drawn-out process involving the discovery of insight, engineering a solution and then the transformation of an industry or field.
That’s almost never achieved by one person or even within one organization.
Question everything
Too often, we treat innovation as a monolith, as if every problem was the same, but that’s not the case. In laboratories and factory floors, universities and coffee shops, or even over a beer after work, people are checking out better ways to do things.
There is no monopoly on creative thought.
But that leads us to a problem: How should we go about innovation? Should we hand it over to the guys with white lab coats? An external partner? A specialist in the field? Crowdsource it?
What we need is a clear framework for making decisions.
As written in the Harvard Business Review, the best way to start is by asking the right questions: (1) How well is the problem defined? And (2) How well is the domain defined? Once you’ve asked those framing questions, you can start defining a sensible way to approach the problem using the innovation matrix.
No one method can suffice. Look at any great innovator, whether it is Apple, Tesla or Google, and you’ll find a portfolio of strategies. So the first step toward solving a difficult problem is asking the questions you need to define your approach.
To paraphrase Voltaire, if you need to solve a problem, first define your terms.
Think new business models
When Chester Carlson perfected his invention in 1938, he tried to market it to more than 20 companies but had no takers. It was simply far too expensive for the market.
Finally, in 1946, Joe Wilson, President of the Haloid Company, came up with the idea of leasing the machines instead of selling them outright. The idea was a rousing success, and in 1948 the firm changed its name to Xerox.
The tricky thing about disruptive innovations is that they rarely fit into existing business models and so the value they create isn’t immediately clear.
Kodak made money by selling the film, so was slow to adopt the digital cameras that the company had itself invented. Yahoo’s business was focused on keeping users on its site, so passed on the chance to acquire Google.
It’s not just products that we have to innovate, but business models as well
Size is not important
When most people think about innovation, they think about startups. And certainly, new firms like Uber, Airbnb, and Space X can transform markets.
But others such as IBM, Procter and Gamble, and 3M have managed to stay on top for decades, even as competitors rise to challenge them and then, when markets shift, disappear just as quickly into oblivion.
While it’s true that small, agile firms can move fast, larger enterprises have the luxury of going slow. They have loyal customers and an abundance of resources.
They can see past the next hot trend and invest for the long term. There’s a big difference between hitting on the next big thing and developing it consistently, generation after generation.
Start at the heart
Many people think of innovation as discarding the old to make room for the new, but as Bain & Co.’s Chris Zook points out in Profit From The Core, smart companies realize that the bulk of their profits will come from current lines of business.
Take Google for example. Yes, it pursues radical innovation, like self-driving cars, at its Google X unit, but the continual improvement of its core search business is what made it the world’s most valuable company. That’s why Google, as well as many other innovative companies, follow the 70/20/10 rule.
The premise of the rule is simple. Focus 70% of your resources on improving existing technology (i.e., search), 20% of adjacent markets (i.e., Gmail, Google Drive, etc.) and 10% on completely new markets (i.e., self-driving cars).
Combine ideas
When we look back to the great innovations of the past, it hard not to wonder how it could’ve gone differently.
What if chemists had picked up on Fleming’s discovery of penicillin in weeks rather than years? How many lives could have been saved?
Was there no one who could have helped develop Engelbart’s vision of the personal computer outside of Northern California?
And now, the problems we seek to solve are significantly more complex than in earlier generations. That’s one reason why the journal Nature recently noted that the average scientific paper today has four times as many authors as one did in 1950.
At the same time, knowledge has been democratized. A teenager with a smartphone today has more access to information than a highly trained specialist a generation ago.
That’s why now collaboration itself is becoming a competitive advantage.
Today, there are a variety of major efforts, such as the JCESR at Argonne National Labs to develop next-generation batteries, the National Network for Manufacturing Innovation and the Center for Applied Cancer Science at MD Anderson that is forging a more collaborative approach.
Increasingly, we’re finding that to solve tough problems; we need to work harder to integrate people with diverse talents.
The bottom line … new thinking
Take a slightly broader view, and it becomes clear that innovation today goes far beyond research labs, Silicon Valley pitch meetings, and large corporate initiatives.
We all have something to offer and can add to the world’s knowledge in a way that may differ in degree, but not in kind, to the giants of the past.
