A Look Beneath the Silver Lining

24 07 2009

SilverLiningCoverBearing in mind that I work in the innovation industry, I really shouldn’t be surprised anymore when people approach me with unusual propositions – and yet when my friend Renee Callaghan of Innosight approached me with this idea for a virtual book tour for Scott Anthony’s new book, The Silver Lining, it still took me a while to believe that she was serious.

Scott, after all, is already pretty well known in the innovation arena, having co-authored at least one seminal innovation book with the famed Clay Christensen – and also having then co-founded Innosight with that same person. And yet I guess it’s a sign of the networked world we live in that, instead of the traditional road trip involved in launching a book, Scott, and the Harvard Business School Press, have decided to innovate and instead pick a series of influential bloggers, podcasters, and v-loggers to have exclusive access to Scott for this first week of its proper launch.

I was of course, honored to be included in this exclusive group – and throughout this week you’ve probably been following the virtual tour across the internet which started at Chris Flanagan’s video interview at the Business Innovation Factory on Monday;  followed by a podcasted interview with Principled Innovation’s Jeff de Cagna on Tuesday;  FutureThink’s Josh Kutticherry on Wednesday; and then yesterday (Thursday)Jim McGee who in a spurt of over-achievement organized both an interesting podcast panel interview on his FastForward Blog as well as a full book review on his personal site,  McGee’s Musings.


That left me with today, Friday the 24th July, and the anchor leg of the virtual whistle-stop tour for Scott. There was, admittedly, a certain sense of both comfort and dread in being the last on the list of people covering a book tour – not least of which my concern that it was kind of like drawing the 4pm speaking slot of a big two day conference – with the leftover people desperately sucking down coffee in a last ditch effort to make it through one last set of powerpoint slides.

However, there are as it turns out, some definite benefits – not least of which the rare opportunity to not only read Scott’s ideas in his book, but to also watch this reknown thought leader’s progress through the tour and grill him with some follow up questions from his other interviews.

3730-004-E39DD06FUnsurprisingly, Scott’s not exactly short of a sharp insight or two – if anything, talking to him is very much similar to reading his book – a virtual flood of useful thoughts and ideas – that really require you to stop and think about them in order to get the full benefit of them – so I ended up being thankful to be the last one to get passed the baton so to speak.

With that in mind – here are the highlights from my conversations with Scott these last few weeks:

————Start of Interview———

>>Scott – love the new book, and not just because of the shiny silver cover – but why this, and why now? There’s no shortage of new books on innovation on the market – why do we need another one? And what sets this book apart from the others?


The idea for The Silver Lining came in an October meeting of the Innosight leadership team. As it seemed like the business world was collapsing, we were deciding what was the right message to bring to our clients. It didn’t take more than a half day of research to realize that innovation was still possible, no matter how dark the times. We knew that innovation was growing increasingly critical. And we knew that despite the sense of gloom that innovation was increasingly within the grasp of managers everywhere. Hence, the idea for a book describing what to do to seize the still ample opportunities that exist in today’s markets. My hope is to inspire entrepreneurs and corporate innovators, and to provide them with practical guidance that can help them seize their own silver lining.

>>Throughout the book, you refer to it being “a playbook for uncertain times”,  do you think innovation processes need to be different in good times versus bad?

Honestly I don’t think there are as many differences between innovation in good times and innovation in bad times. The funny thing is that the practices that feel more natural when times are bad – limit resources, focus on learning as quickly as possible, shut down flawed projects early – actually are the right practices in ANY time. That’s the silver lining of today’s tough times – it forces companies to do what they should have been doing already. Some things do become more important in tough times. Pruning has to happen more rapidly. Loving the low end becomes more important. I think the more important question is what do you have to do differently as change accelerates. The guidance of my colleague Dick Foster rings true here: you have to change at the pace and the scale of the market, without losing control. That means quickly iterating towards successful strategies, and developing an individual competency to grapple with the paradoxes that increasingly characterize today’s world.

>>Like you, I’ve also been observing the increasing pace of change in the world and urging people to react and plan accordingly – but, in your opinion, what are the key drivers of this increasing pace of change? – and do you think that pace is here to stay? And at what point does that pace flatten out? Surely it can’t just keep on increasing indefinitely.. (just imagine – you come up with something and instantly “poof!” it’s out of date already! Quite a frightening thought..) !

speedTo be completely honest, I see no reason why the pace of change won’t continue to accelerate. There have been three primary – and interrelated – drivers over the past decade. The first is the dramatic improvement in technologies, which makes communication, collaboration, coordination, and creation much simpler. The second is the growing importance of emerging economies like Brazil, India, and China, which have growing classes of entrepreneurs. The final has been a huge amount of capital to help fund entrepreneurial ventures and further improve technologies. Now, some might argue that capital has dried up, but there’s still a lot of money out there. Further, it’s a lot cheaper and easier to start and scale a business than it was a decade ago. I’ve been thinking about this a lot recently, and I’m coming to the viewpoint that the only two real sources of competitive advantages are brands and business models. Brands because they can cause people to do some irrational things. Business models because they are incredibly difficult to copy. But technological based advantages are transitory. Cost advantages are transitory. It’s scary, because it means the only thing you can be sure about is that tomorrow’s business will bear little resemblance to today’s business.

>>Does Innosight itself uses the principles outlined in your book internally to sustainably innovate itself?  Could you give me some examples?

We most certainly have put the principles in the book (and more broadly the disruptive principles) to work. On a general level, one of Innosight’s premises is that by using well-grounded theory we can solve seemingly complicated problems more quickly and cheaply than a company that uses “unstructured problem solving” to guide its approach. We constantly prune our innovation portfolio. This year we have accelerated efforts that we think are critical to long-term competitive advantage, such as building deeper competency in market understanding, business model innovation, and new business creation, and decelerated lower-priority areas, such as developing a disruptive design capability. We have made sure that we are investing in areas that are critical for us to deliver distinctive service (e.g., training), but curtailing investment in areas that are less important (e.g., legal services).

We always think about the smart management of strategic experiments. For example, when we were thinking about building that disruptive design capability, we designed a very simple test: we gave the idea to our sales force (our leadership team) and said “go pitch this to current and prospective clients.” Six weeks later, we had no market interest. Part of this I suspect is because selling disruptive design services is very different from selling management consulting services. That doesn’t mean disruptive design services is a bad idea, but it means if we have to move it through our current sales force it won’t work, and since we’re not building a new sales force this year, the idea goes on ice.

>>I guess one big question that Corporate America is still asking though is “where does the future of innovation as a corporate competency lie?” – Already it means so many different things to different industries – in Pharma, R&D dominates; in Tech, IT runs the show; and in CPGs the Innovation Manager is frequently a fancy name for what used to be a brand manager – will Innovation continue to be narrowly focused in the future? Do you see it spreading out across the enterprise to be more all encompassing?  Or will it simply devolve to be a general competency that’s seen as “everyone’s job” with no set leadership (something I’ve heard way too often if you ask me; and frequently ends up being a euphemism for “we’re too lazy to do anything about this”…)?

I_in_innovationMy own personal view is it is an “and.” The companies that are really far along in their innovation journey do expect it to be the job of the many. That is, they ask their legal department, external relationship department, and so on to constantly think of doing old things differently or doing new things. But if you only have a “everybody innovate” approach with no focused efforts the odds that you do anything truly breakthrough are pretty low. So I see a hybrid model, where there is a general culture of innovation supported by innovation “hot spots” that tackle specific problems. P&G is an instructive example. The company certainly thinks innovation is one of its core competencies and expects everyone to think and act innovatively. But it also has specific structures, like a Corporate Innovation Fund and a division designed to create new businesses (FutureWorks). It’s seeking the “and.” That’s usually a good thing.

>>You mentioned in your interview at the Business Innovation Factory earlier this week that “the only thing you can predict with a fairly high degree of  certainty is that there will be less certainty in the future”  – that’s a pretty daunting warning of the state of affairs to most business executives in established companies out there. How do you manage in an era of such uncertainty? – The obvious implications of that outlook are things like higher failure rates, lower returns, and less predictability in the business of the future – which makes it pretty hard to do many traditional actions and functions like corporate and financial planning – let alone a change in mindsets of the executives in the future. What kinds of changes are necessary to survive and thrive in a permanently uncertain world?

I was talking to a client this week about their strategic planning process. It was done by a small group of specialists once a year. I told them that had to change. It had to be a continuous activity with broad contribution. That’s broadly true now. The world moves too fast for people to sit back and ponder. Now, thinking is still important, but you have to increase the pace with which you take the pulse of the market, or you are going to miss an important signal. These implications don’t have to be dire if people act in the right way. That is, to embrace that your assumptions aren’t right and to be ready to course correct as you learn. I’d argue that acting in the right ways will actually increase OVERALL success rates and returns, because the failures will happen much faster, which means you find the success sooner and don’t throw good money after bad going in the wrong direction.

>>You also mentioned at the end of that interview that your goal at Innosight was to help clients introduce “greater predictability and reliability” into their innovations – isn’t that an oxymoron bearing in mind your previous comment about less certainty in the business world? Won’t the lack of certainty also make innovation less predictable?

At a micro level, yes, I think any singular innovation effort based on assumptions about a market is going to de facto have less predictability because there is a greater chance that those assumptions won’t pan out. At a macro level, however, the right process and approach that allows companies to go after the right opportunities and to quickly learn about those assumptions completely changes the frequency with which they succeed in a way that overwhelms the micro changes.

>>I think one of the things I like most about your book is the sheer practical nature of it – you include a lot of practical tools for following your recommendations – BUT a lot of the things you recommend for companies to do are pretty scary/alien concepts for most companies (and quite rightly so!) – but as a manager trying to implement these techniques at a company, you’d be facing an uphill battle against the status quo – how would you go about overcoming those objections and introducing your company to these techniques, concepts and measures?

[UNSET]The notion of smart strategic experiments doesn’t apply just to new products. It applies to new processes and approaches inside a company. I would recommend that managers try to find a “safe place” to run an experiment. In other words, don’t try to convince leadership with logic, or what’s in a book, demonstrate to them the results of doing things differently. Actions always speak louder than words. One simple thing I’ve seen people do is get together a group of senior leaders to kick around these concepts. Almost always, one of the leaders walks away with an insight that causes them to want to learn more.

>>In the FastForward Blog you said “There has been academic research that shows that the better organizations get at six sigma kinds of processes, the better they get at incremental innovation and the worse they get at disruptive innovation.” – and I fully agree with you in the need to bring in discipline into the innovation process – heck, my clients probably even get bored of hearing me say the words  “process” and “discipline” at meetings – but in a world that has embraced (and rightfully so to an extent) Six Sigma processes that, as you mentioned, have a tendency to choke out the possibility of disruptive innovation – how do the two things co-exist? How can you institute both the “error-free” culture of Six Sigma with the “failure tolerant” Innovation culture?

There is no company that I’ve seen that has embraced disruptive innovation in any serious way that hasn’t create substantial organizational space for disruption. The extreme is a fully autonomous “skunkworks,” but I’ve also seen people keep efforts internal, but have disruptive innovation efforts follow a different process, at least at the front end of the innovation funnel. Six Sigma processes aren’t bad of course. And the principles of Six Sigma around swarming problems, testing hypotheses, and constant learning, actually are very good for all types of innovation. The application can be troublesome though.


>>When you spoke to Jeff de Cagna in his Principled innovation Podcast, you talk briefly about the need for a new generation of managers to emerge with a brand new set of “muscles” that have yet to be evolved in the current generation of “operators” – can you expand upon this idea – what are those muscles, and how do you see companies hiring and developing this new talent?

It’s a great question. Again, I’ll make a macro and a micro comment. At a macro level, managers have to learn how to operate in ambiguous circumstances where they can’t “get” data that shows them the way – they have to create it. They have to learn to grapple with paradoxical demands, such as using core capabilities to beat competitors but being willing to walk away from those core capabilities to beat competitors (different competitors of course). At a micro level, innovators need all sorts of skills. They need to hear what the customer can’t articulate. They need to be able to “pitch” an idea before it’s fully formed in ways that leadership and customers can understand. They have to be able to translate customer insight into opportunity. They have to be able to “un pack” an idea to find its most critical assumptions. And a whole bunch more. Once you begin to understand what these things are, you can look for people who have experiences that suggest they have confronted similar challenges in the past (what Morgan McCall calls “schools of experience”). And you can begin to consciously expose managers to circumstances where they have no choice but to develop these skills. Of course, I think reading fine books like The Silver Lining and The Innovator’s Guide to Growth helps!

————End of Interview———

So all in all, what do I think about this book:

Let’s start with the negatives – Certainly it’s a very thorough book – covering most of the key aspects around corporate innovation. At times however, it had a very academic feel to it – a fact underpinned by a 10 page “Notes” section at the back of the book containing all the references mentioned in the previous 184 pages – and many of the chapters do sometimes read as a recap of other books and concepts that Scott has written in the past.

I also found Scott’s frequent use of ‘anonymous’ examples likewise a bit frustrating – “For example, one company was thinking about developing a disruptive strategy in the real estate market”- but WHO are they??

jerry_seinfeld__1_I’ve seen authors doing this as a way to build surprise when you find out the answer later in the chapter that the “small technology company” doing everything differently ended up being someone like Google – but for many of the examples in the Silver Lining that “reveal” never happens – and to me, it’s the equivalent of starting a joke that should be “A Priest, a Rabbi and a Vicar walk into a bar….” with “Three gentlemen of varied faiths walk into  an establishment selling alcohol…” – Sure, you get the point, but it just isn’t as powerful or as memorable – and the ability to make examples like that memorable (and thus reuseable) are a key element to a top notch book in my mind.

However – when it comes to the key questions:

Was the book useful? Absolutely – the book covers a wide range of topics and even if you see it as a “Best of Scott Anthony, et al” – there’s no denying the sheer thoroughness of the ideas in the book.

Was the book practical? Absolutely – the book is loaded with a powerful set of tools at the end of each chapter that far transcends the usual business book model of a few 2×2 grids and 100 pages of filler. Rarely do you see a book that gives away so much, and in such a compact manner.

thumbs_upWould I recommend it? Absolutely – the book is a fantastic addition to anyone’s innovation library and a ready reference for any practitioner in the innovation field – for, to paraphrase something I heard Scott himself say earlier this week, “every time you run an experiment, you learn new skills and new capabilities that could open up new opportunities in the future” – and if nothing else, this book will arm you with ideas and tools that will inspire you to experiment, learn, and find new opportunities.

Out with the Old? – Not on your Nelly!

2 02 2009

happynewyearBelated Happy New Year from the land of Oz everyone! Apologies for the long absence, but as some of you know, my first post-Imaginatik act was to strap myself onto a plane and go off to the other side of the world to follow my other passion – exploring.

Boris and Uluru

I’ve spent the whole of January in Australia, and New Zealand beckons me for February before I return to the cold and snow of Boston (it’s currently around 40C/110F where I am in 

Australia…quite a change!). However, with a little time off over the next day or two away from my Lonely Planet Guides, I thought I’d post some thoughts on innovation – which is always on my mind – and indeed, I’ve even met some really interesting innovation people on this side of the world too – and I’ll try and post some of the interesting thoughts from those meetings a little later.

I hope you’ll give me a bit of slack then, as I go off on a slight rant in my first posting of 2009 – I promise you it’s not a sign of things to come 😉 speakers-corner-20

The end of the year, always brings people – and pundits in particular, be they journalists, bloggers, or consultants – a chance to reflect on the past, rationalize the future, and for some, to press the “reset” button as they start new chapters in their lives – “out with the old, in with the new” as they say.
It seems that the innovation world is no different – even from my mini-retirement from Imaginatik, it’s been hard to notice the trend happening recently typified by the recent blog posts Bruce Nussbaum, of Businessweek fame, who has now joined a growing list of pundits, wannabe gurus, and consultants proclaiming the “death” of innovation. Could “Innovation” really be dead? tombstone

Of course, on reading further into any of these people’s arguments, they’re quick to admit that the core values, missions, and processes that innovation has embodied these last few years continues to be solid ones. What they’re really complaining about is that the term “innovation” has become overused – and thus from Bruce Nussbaum’s perspective and other consultants – less profitable for them. In its place of course – they suggest new words – words that they will try and coin and in the process become the new gurus of the “Transformation” (in Bruce’s case) movement. And this is where I have a pet peeve with the management world. Increasingly, management thought and theory has become more Chanel than Champy, more Dior than Davenport, more Prada than Porter, in short, more fashion than academic and business discipline, rigor, and accountability. 23issa

Bruce and his ilk, as well as consultants, software vendors, and the rest of us (I’d even have to include myself in that list!) survive on the basis of being different in order to be either interesting enough to be read (for journalists) or interesting enough to be bought for a premium price (consultants and vendors). I admit that it’s a necessary and wise move for many markets and for most times – after all if you were in the screw business, the common wisdom is that you need to innovate to change your value proposition in the eye of the consumer so that they will pick your screw over those of your competitors. It’s no longer just a screw – it’s now a “galvanized, rust resistant, all-in-one joint re-enforcement device – now with extra threads!”….screw_tk

There’s a part of me that doesn’t blame Bruce et al for wanting to change the paradigm in order to keep fresh and keep readers interested – hell, there’s a part of me that hopes he’s successful in pushing a new term that takes some of the inevitable armies of substandard consultants that tend to follow these trends off the business journals. You know who they are – more salesmen than bone fide business advisors and gurus – more interested in making a quick buck by rebranding to fit a trend that to actually care about the long term health of businesses and their clients.

But here’s where my problem lies with this specific change – the world NEEDS innovation right now. With a global recession not only looming but already in full effect (even in Australia, GDP is down, unemployment rates are rising, downsizing occurring, etc) – the one discipline that will change the way things are going is innovation. The World, as a whole, needs to learn how to systematically and predictably manage their ability to change everything about their business – their products, their processes, their business models, even their customers. Call me biased if you will – but I strongly believe that. I’ve seen first hand what innovation can do for companies that are able to embrace a wide vision of possibilities and unleash the power of what Innovation can do.

It’s not a new topic or a fad – any company with any serious longevity has had to embrace major changes in the past – the business environment of our times just demands those changes to be more frequent and faster. It’s not a flawed topic – failures are either caused by companies not fully embracing what needs to be done (which is usually not easy) or not getting proper help and advice choosing instead to go with a cheaper consultant or choosing someone internal to “go out and learn” believing it to be a simple and easy game to play. In short – it’s not innovation that’s flawed – it’s how companies have gone about it that has been flawed. They haven’t understood what’s really possible – they haven’t understood the impact that it could have – and as a result they handicap the process from the outset.

The headline grabbing attempts of a few wannabe gurus proclaiming the death of innovation isn’t going to help anyone. It just leads to confusion in the corporate world and ultimately will lead to companies stalling or abandoning innovation-type efforts altogether for fear of failure or a lack of understanding of the importance of innovation to the business.

Bruce et al – I won’t be backing down from this! Innovation is of key importance to the US, to the West, to the World and you know it! There are times to be different and there are times to band together and push what we all know is in the better interest of the world. There are times, Bruce, when you just need to let a screw be called a screw. It may be boring for you to keep on writing and lecturing on company after company embracing and succeeding with innovation efforts – but success is success – and right now America, and the World, needs to believe, to embrace innovation, and to succeed.


The One Big Thing…for Innovation

9 12 2008

one_finger_350oIn my last few days now at Imaginatik, a lot of contemplative questions keep getting asked at me by team members and colleagues hoping to glean one last bit of knowledge from me before I leave – but probably the best was from a colleague who asked me, if I could only pick one thing that made or broke an innovation program – what would it be.  My response – had I been better prepared and more dramatic in nature would’ve been – should’ve been – to just put up one finger and say “This!”.

The reason why that would’ve been perfect comes from a scene in one of my favorite movies, City Slickers, in which a fantastic Jack Palance (as the weathered cowboy, Curly) shares the secret of life with a weary and overwhelmed Billy Crystal (as the city boy, Mitch):


Curly: Do you know what the secret of life is?  (holds up one finger)  This!

Mitch: Your finger?

city_slickers_movie_image_jack_palance__1_3Curly: One thing. Just one thing.  You stick with that and the rest just don’t matter…

Mitch: But what is the one thing?

Curly: [smiles] That’s what you have to find out.

For me, this quote has always inspired a good deal of thought and contemplation – and for a piece of deep thought to be thrown into a comedy like City Slickers, even more so – but when it comes to innovation – it’s also the key to remembering one of the most important things that gets ignored by companies.

I so often have seen programs fail because they didn’t take this into account. I’ve seen innovation initiatives go nowhere because they never thought to ask the big question.  And more recently I’ve seen Social Networking and other Collaborative applications achieve nothing because they were too enamored to tick a box and say “yes we can” than spend the time to think about “why they should”.

You see – whilst there are tons of ways in which to make a collaborative application succeed, there’s one sure fire way to make it fail from a corporate perspective, and that’s to ignore (he says, holding up one finger) “This!”.

What is “This” I hear you say? The one thing you stick with that makes it all tick?  Purpose.

What humans need in life, strive for in life, require in order to be happy and motivated – is a purpose. It is what gives our lives meaning, makes us feel like we’ve accomplished, and ultimately makes us want to do more. People spend their entire lives looking to find the purpose in their lives – and whilst it is different for everyone – the need for it is just as strong for everyone.

Now I don’t mean to come across all evangelical – and I certainly don’t have the meaning of life all sorted out – but I do know what makes people tick – Purpose. So why is it then that so many companies ignore that when trying to engage their workforce in any kind of initiative. So many companies are rushing out there to tick a box, to implement a tool, to start a new collaborative initiative so as to be able to claim to shareholders, customers, and the outside world as a whole that they’re on top of things – that they don’t stop to think about ensuring that there’s a purpose to it all.

When at Imaginatik, and we developed Idea Central and idea management as a whole – what really set us apart from the old school Knowledge Management practices was that we gave people a purpose to actually participate – a reason to make it worthwhile.  Facebook is successful because it fulfills a purpose in people’s lives – to more easily connect with their friends. LinkedIn – to more easily keep in touch with the people with whom we do business and to enable us to leverage that to our benefit in the future – whether that be sales, getting a new job, or even as referrals. Pick any kind of successful social networking tools (and there are, contrary to popular belief – PLENTY of failed and failing ones out there) and you’ll find they all have one thing in common – they’ve given/provided people with a (good) purpose to participate. 

Yet I still see companies running innovation programs without a clear set of goals or purpose. I see companies distributing social networking tools, without making it clear why, what for, or how it will benefit the end user. It is of course then, no surprise when I see these programs fail.

It’s not enough to just know the purpose for yourself either – you have to live, breathe, and communicate that purpose with passion in order for it to be felt and responded to by the rest of the community you’re trying to tap into – but when you do – the response and value created can’t be underestimated.


Now if I could only find a way to go back in time and repeat my answer to my colleague with a little more flair, I could leave Imaginatik looking as cool as old Jack himself….


The Innovator’s Guide to a Galaxy in Recession

20 11 2008


Don't Panic ButtonRecessions are funny things – on the one side economic horror story on the other harbinger of an explosion of innovation opportunities – sort of a “is the glass half full or half empty” coin toss really. 

I always find it interesting to watch how companies react during bad times – their reactions, whilst perfectly understandable from a human emotion standpoint – can be dreadfully short sighted at times. In fact – it’s this over reaction towards short term thinking that triggers the economic horror stories out there as people get laid off, companies post ever lower profits, and economic doom and gloom dominates the newspaper headlines. 

For example – take this typical strategical cycle that typifies corporate recessionary behavior: 

In a non-recessionary environment, people are employed; stability reigns, and people feel comfortable enough to part with their hard earned cash on non-essential items. And when times are really good – people approach their purchases in a more “cavalier” attitude looking at a wide array of factors beyond whether or not it simply “does the job” – and happily paying for things like extra “coolness”, the right brand, or a color that matches those shoes you bought last week.  In this environment, companies can lazily throw low-level innovations at the market with impunity to capture a fickle market that carefully matches their purchases with their lifestyle and changes frequently because of the easy availability and reliability of cash to the consumer. For the last 7 years or so (and some might say longer as the 2001-2002 recession was a short one) we’ve been facing just such a market. 

In a recessionary environment, consumers get jittery about spending their money as stability is no longer guaranteed – consumer mentalities change and so do their buying preferences. Top of the list of consumer preferences are now two simple elements, 1) whether or not the product can do the core job needed, and 2) price.

The net effect of that, on most markets, is to essentially commoditize all the products within because the incremental differences between competing products are no longer valued individually.  As a result, the companies able to provide the least expensive goods that still do the job begin to take on market share.

Consumer paying with coins

In order to compete, companies likewise begin to compete on price, initially by reducing their operating costs (i.e. headcount), which allows them to be able to maintain margins and profits on lower demand.  Then eventually they begin to sacrifice margin for increased market share in a bid to make up the reduced margins with increased volume.  Whilst these moves result in short term gains, they only last as long as it takes for competitors to do the same, which usually isn’t long. 

Eventually companies reach a point at which they are operating at minimal margins that barely cover their costs – and go on to the next stage – a battle of bank balances as companies continue to reduce prices at the cost of the business until only one remains…. 

Sound familiar? It should, the car industry pretty much just followed this model of competition to its demise, and current bid to be bailed out by the US Government.  There are several other similar cycles as the failure on one group of companies resonates up and down their value chains to affect the entire economy.

Who Dares Wins DVD cover

Yet out of every major recession, several companies emerge as winners.   Companies that have somehow found a way to separate them-selves from competition, found new ways to do business, or capitalized on new markets that no one new existed before. Home Depot, the iPod, the PC, even MTV have all triumphed from past recessionary environments.  In a recessionary world it really is “He Who Dares,Wins” (read this McKinsey Quarterly article for a fantastic quantification of this).

It’s easy to overlook the big obvious solution to the whole problem and get caught up in all the doom and gloom that dominates our media headlines as so many other commentators have. 

Recessions result in one certainty – BIG CHANGE – and the longer and deeper the recession, the more change there is – in your consumer/client, in your market, in your industry, in global business as a whole.   

Big Change is scary – but Big Change is good. Big change means BIG OPPORTUNITIES. Opportunities to change the game, to take advantage of weaker competitors, to find new and novel ways in which to not only survive, but to thrive. 

Innovation is all about realizing and capitalizing on the opportunities available to your company, and it’s the way out of vicious cycles like the one described above. 

The great news is that companies intent on winning the game are now forced to look at innovation with a sense of urgency previously unseen.  They will look towards innovation to revisit past assumptions, norms, and directions in a bid to become different from the competition in the eyes of the consumer/client.  To no longer be able to be compared on a like for like basis, and to compete in a market of one instead of many. 

Winners emerging from this downturn in the economy will develop an innovation strategy that looks at innovation in a very unique way from most companies. They will see innovation as something that can impact all parts of the business, in short and medium, as well as long-term time frames. 

1) Short Term Innovation Strategies

In the short term, winning strategies look to help companies with their short-term goals of increased efficiencies.  They do this by developing new and novel ways for the company to achieve cost reductions, process improvements, and business model changes that can catapult them into a new league of efficiencies that are impossible with old-school models.  The more sophisticated the efficiency developed, the more defendable and long lasting that innovation will become.  This will give the company a short term cost edge on its competitors, which is more conducive to the long-term health of the business than simple cost cuttings and harder to emulate.  Dell’s development of their unique business model in the 90’s is a classic example of the type of base changes that can propel a company into a market of one. 

Embracing the creative potential of their employees, GE is currently using Imaginatik’s software to drive their DMP (Direct Material Productivity) Work Out process.  This looks at reducing overall costs through design changes whilst maintaining or improving quality and customer acceptance. The results will directly impact the short-term productivity of GE’s business units. 

Another client I worked with had the interesting idea of creating a marketplace to drive efficiencies in the way the company used external consultants. Rather than individual bids or blind RFP processes – they invited all the consultants into an online system (with company names suitably anonymised) where they could not only see everyone else’s proposals, but could also add on to other company’s proposals.  This allowed the client company to pick and choose the best combination of services to fit their need – and to negotiate pricing in a very transparent process! 

The key here is to focus on short-term strategic objectives, and on areas that will result in ideas developed and implemented. In many cases this means not looking to create new projects, but rather to enhance existing funded projects by providing them with new and novel solutions to the problem they are already addressing. 

For example, why not play into Six Sigma and Lean projects?  They’re all about increasing efficiency in company processes – however all of them rely on small teams of people studying a process at length and then brainstorming between themselves to come up with a more efficient process.  In today’s technology literate and collaborative environments, it seems awfully short sighted to not involve hundreds or thousands of people in the process to come up with better ideas. cardboard toilet rolls



Georgia-Pacific was a great example of this.  One of their cost reduction initiatives I worked on zeroed in on shaving the cost of the cardboard tubes inside rolls of paper towels. By embracing the collaborative innovation infrastructure at their disposal, mill workers from among the company’s 16,000 North American employees quickly responded with little changes that shaved about $1.2 million a year, or roughly 4%, off the cost of the tubes – not too shabby, eh?  

2) Medium Term 

When looking at the medium term you can start looking at how to take advantage of some of the more obvious changes in the changing marketplace. 

Starbucks Cup and WaffleI loved one story I read about how Starbucks are doing just that.  They’re currently testing out new pricing strategies to try and overcome the recessionary effects on their consumers that are much more price sensitive nowadays, and no longer want to be spending $4 on a daily “Grande pumpkin spice vanilla latte (hold the cream, it makes me fatter)”.   One idea they’re piloting at the moment offers consumers small bottomless cups of coffee (i.e. free refills, not that the cups don’t actually have a bottom, that would be just silly…) for $1.  The move ensures that Starbucks customers return to Starbucks for their daily fixes regardless of household budget changes.  It also provides Starbucks with opportunities to up sell them additional products like music and baked goods that will contribute to the overall margin per customers that they achieve while satisfying new needs for the customer. 

Several clients I’ve worked with have also had fantastic results in the medium term by looking for adjacent markets for existing products. One performance chemicals company I worked with found a multi-million dollar new market for their existing waterproofing wrap used in the construction industry.  This was found when one curious sales person found that his client was buying the product to rapidly waterproof boats they were manufacturing instead.  

Bayer Production FacilityBayer, another Imaginatik client did something similar, collecting 147 ideas from their employee base for alternative uses and markets for one of their existing products.  This resulted in Bayer being able to enter a brand new market area with a new application in less than a year. 

Finally, when looking at the medium term, don’t underestimate the benefits of working with your business partners.  One large tech company ran one event over a 30-day period on optimizing their supply chain with select partners. The resulting ideas picked for implementation realized over $2 Million in benefits and saved them over 3000 man-hours!  I think the correct terminology for those kind of benefits in my current US homeland is “There’s gold in them’ hills”! 

3) Long Term 

Long-term strategies are all about changing the game – finding new products, new markets and taking advantage of concepts such as Blue Ocean Spaces, Disruptive Innovations, or Lead Adopters (depending on whom you choose as your academic guru of choice).  There’s no shortage of proof of the potential that a good innovation program and process can deliver to your business.  Whether it’s the ability to take your business to new heights (i.e. Apple or Google for several over publicized examples of innovation programs of different sorts at work), or more importantly, its ability to provide longevity to your business, even if that means changing the nature of the business Nokia N-Series(i.e. Nokia– originally a forestry company, then rubber products (they still make tires bizarrely), and now a telecoms giant – what could be next?).  

However, success in the long term has to be driven by success in the short and medium term. Their ability to drive real value will give you the credibility and time to drive the big changes that will propel your company into the next generation. 

After all, winners emerge from recessions and innovation is what will make you one of those winners. 

“The State of Innovation” on InnovationTools.com

28 10 2008

For those of you who have read and enjoyed my recent “State of Innovation” posts will probably enjoy reading my guest post on Chuck Frey’s excellent Innovation Tools website – which gave me the opportunity to revisit some of the thoughts originally posted on this site and to expand upon some of the arguments.

Innovation meets Adolescence (Part 2)

7 10 2008


So what are the signs of the continuing development of enterprise use and adoption of innovation tools and techniques? 

We already covered in a previous post (see “Death of the Chief Innovation Officer”) the first of these signs – that of the increasing presence of dedicated innovation roles.  People dedicated to ensuring the company is innovating effectively, sustainably, and in the direction the company needs to go in – ensuring that a constant stream of new sources of competitive advantage and shareholder wealth are being discovered. 

Innovation has also achieved cross functional awareness – and whilst in the past Innovation would’ve been the sole domain of R&D or Marketing – we now see innovation happening in multiple parts of the company and even in between companies.  Companies are expecting innovation everywhere and looking across multiple Innovation Dimensions (read my previous paper on Innovation Dimensions which goes into this in more detail)  in search of differentiating factors which will set them apart from their competitors. 

In the past, companies would be pleasantly surprised if they achieved new sources of value. The price points for trying innovation was low, and the expectations were similarly low (I remember one FMCG company I worked with back in 2002 whose idea of a success story was pointing to the new names for the conference rooms that their employees had collaboratively devised). The same can definitely not be said for today’s innovative enterprise. 

Companies are also moving quickly up an innovation target maturity curve, each time tackling more complex projects that have an increasingly high potential impact on the business (see Innovation Complexity Curve post for more). As usual , it is the industries that face a quicker pace of change that are leading the charge up this curve as their need for innovation is equally strong. 

All of this points to an enterprise landscape where innovation is seen as a critical element of business strategy. This is no longer an experimental venture, but a strategic CEO supervised initiative. It has senior process leadership and senior project sponsors for each individual project run. There are now explicit goals and metrics tied to the bottom line welfare of the company. Failure is no longer an option – and the failure to create new forms of value for the company is a matter for very serious concern – not least of which because it is now a much more costly failure to endure. As a result experienced innovation heads are becoming increasingly valuable and companies are also increasingly looking for external advice and guidance from consultants and vendors who can lead them by the hand to demonstrated success.  

So there you have it – my observations on where the innovation industry is at this point in time – if I’ve forgotten to address any elements, or you just want to throw me a curve ball – by all means leave a comment and I’ll try my best to address it – Happy Innovating! 

Innovation meets Adolescence (Part 1)

30 09 2008


Following on from my previous post on the Death of the Chief Innovation Officer (and the forthcoming rise of the VP, Innovation!), I’ve had several people now ask me about the rest of the contents of that presentation I gave on the “State of Innovation” – where is Innovation today?  

I personally believe that Innovation is continuing to mature – if we looked at the track of the adoption curve for Innovation as a sustainable business process, my feeling is that it looks somewhat like this:


Back in 2001 when I first got involved with Innovation and Idea Management – we were most definitely selling to the Innovators out there. They behaved in typical Innovator fashion – looking for shiny objects, reading up research to get the latest and greatest in whatever business tools are out there, very little sensitivity to risk, and generally regarded as mavericks within their companies. 

What we’ve gone through in the last 7 years is the maturation of that market – and with that a change in not only who’s doing innovation, but also how they’re doing it, and what they’re looking for.  It’s also signaled large scale changes in the market and how innovation is perceived and marketed by vendors.  

Let’s look at the most obvious indicator – the market landscape: In 2001, there were really only a few very small vendors out there – they were highly fragmented and tended to focus on niche elements of the innovation arena. I remember speaking to an industry analyst from Forrester at the time who told me that despite the fact that they loved our product “if you don’t have competitors, you don’t have a market”.   We were missionary sellers to a market that didn’t know what we had or how to use it – and when they did use it, they tended to focus on using it to replace the old school system of paper based suggestion boxes and Excel spreadsheets.  It was hard to find someone who could understand the potential in what vendors were trying to sell them – and even harder to find someone willing to look at committing the time, energy and resources into making it sustainable. Only serial entrepreneurs and mad men would dare enter the market at this point (and yes, we were both ;p ) .

By 2004, several more vendors had shown up on the scene – the market became more identifiable, people began to string applications together to make more robust products that the client could understand, and I had that same analyst now tell me that “consolidation will happen in this marketplace – I know of a company who is going to buy you soon”.  At this point there started to be people who “got it” on a more regular basis – although they still tended to be predominately mavericks or “movers and shakers” in the company who were out to make an impact and saw an opportunity to do something no one else had.  Of course, this led to a boom and bust period for corporate innovation programs as these maverick leaders would make a big impact in the business world and then have to face the consequences  – namely they would either:

a) Get Promoted
b) Get given more areas of responsibility in order to kibosh their rebel rousing ways
c) Get hired by someone else in their industry who wanted the magic formula
d) Retire (because another frequent profile of sponsor were near-retirees looking to make a last ditch impact and had nothing to lose

The market today is very different yet again – with a multitude of small vendors starting to flood the markets but ultimately the main market sticking to the few bigger vendors who serve defined markets but have multiple unique selling points to differentiate themselves as they try to find what the mass market that’s coming ahead really wants and needs. Financing is becoming easier because institutions are beginning to actually understand what is meant by the various terms that are used in the marketplace, and what the business proposition is.  Enterprises as a whole are starting to understand – and nowadays, if they aren’t actively approaching the vendor market in some way, it doesn’t take them long to figure out how it can be useful to them.  The market is rich with options – both from the software world and from the consulting world – big and small – local and global – there’s a vendor who can satisfy the market’s needs.  Prices are high, but so are the rewards for sustainable innovators – and the current recession is only going to strengthen the innovation agenda (see my entry on this topic for more on recessions and innovation). 

My personal feeling is that we’re about to begin tapping into the Early Majority stage of the adoption curve now having crossed the Innovator’s Chasm (the make or break point for any concept or product where you have to bridge the gap between the Early Adopters and the beginning of the mass market that is represented by the two majority groups) at the beginning of 2007. 

Of course the most interesting changes are happening at the enterprise level – and there are several major trends that are also pointing to this upcoming maturation in the enterprise application of innovation tools and techniques.  But that’s a story for another posting… 🙂 

Innovation Complexity Curve

26 09 2008


About a month ago I got asked by a colleague if I thought that there was some sort of maturity model for how are clients address and utilize innovation tools and it got me thinking on.  What I came up with is a model based on how I’ve observed our clients taking innovation as a new concept and tool and how that usage has grown over time:

When addressing a new concept, the first stage is to see if you can use it for Cost Reduction Purposes. It’s low risk, easy to do, can generate some marginal value that you wouldn’t have otherwise achieved and if you fail, no one will notice. 

Having achieved success at that, you then start looking at finding ways in which to improve your existing processes to become more efficient and to start adding some original value to the company. 

Success in that area leads you to look at how you can begin to use the concept/tool to gain some sort of competitive advantage with your product line – at first by looking at Incremental changes to your existing product line, and then by looking for alternative adjacent offerings you can develop to complement your existing product line.

Finally you start looking to the future – first by envisioning what your product line will look like in future generations and then ultimately by opening your mind to what sort of blue sky / breakthrough opportunities the company could capitalize on in the future. 

The further up the complexity curve you go, the more potential impact on your business a project will have. However, as the complexity is rising so does the risk of failure (naturally – if it was easy everyone would do it well!) and so your attitude towards failure needs to be likewise massaged and toughened if you desire to reach the top. 

I’ve seen many companies follow this curve – it offers a balanced way to try out the new concept/tool whilst all the time building credibility and tolerance to risk in exchange for reward. 

I’d be interested in any thoughts people have – so feel free to leave them!

Oh – and yes, I realise the “curve” isn’t actually a curve – but somehow “The Innovation Complexity Straight Line” didn’t have the same ring to me as I was writing this – and I vaguely remember an A-level maths professor say something to me about how even a straight line is a curve of sorts mathematically (although I could be wrong)… 

Death of the Chief Innovation Officer?

17 09 2008

I recently did a presentation to a large nationwide insurance company around “the state of innovation” today. it was an interesting opportunity to reflect upon some of the major changes that I’ve been noticing going on over the last year. 

As this was a pretty senior audience, it was no surprise that one of the items that caught their attention was the state of innovation leadership and how innovation is staffed and led in the modern enterprise. 

One of the biggest changes I think is the death of the Chief Innovation Officer (CIO) role. As unusual as it sounds for someone like me to be proclaiming that – I have good reason for my assertion – other than the evidence of numerous high profile CIOs leaving their employment over the last year or so. 

In reality – it’s not that companies don’t have the need for the CIO role – but rather that I think innovation has become such a critical part to most company’s future that it has been rolled into a much more important role – that of the CEO.  Try finding one CEO statement on any financial report that doesn’t mention innovation nowadays – and I absolutely applaud that approach.  Innovation has the capacity to make big – no HUGE – changes to a company. Take Nokia – innovation has taken it from being a forestry company, to a rubber products company, to a telecoms behemoth – without complete executive support for the type of changes required to innovate, it simply wouldn’t have happened. Innovation has to be about helping the organization achieve a direction and goal that it WANTS to achieve – and ultimately there is only one person in the organization that has the ultimate responsibility for that – the CEO.  

That’s not to say that organizations can get away without some sort of senior leadership – far from it – that leadership is as important, if not more important, than ever before – but it now is coming from a position that is junior to whomever leads the major change directions within the organization – in some orgs that comes under a Chief Strategy Officer, in Consumer Products companies that is typically the Chief Marketing Officer, in  Pharmas and other research intensive companies it falls most likely under the R&D department – and in some cases it’s a position that reports directly to the CEO. 

This new role – most frequently then an SVP / VP of Innovation – is the guardian of innovation within the company – ensuring processes are devised, targeted and executed to enable the org’s strategic goals to be achieved. They are the ultimate problem solving expert in the company – helping to not only define the problems that must be overcome, but then also to define the methodology by which they can be solved and ensuring that the organization’s resources are made available to do so. They are the champions of change, the focusing lens of innovation, and ultimately the secret to a successful program. 

The CIO is dead! Long Live the VP, Innovation! 

Parallel or Serial?

2 09 2008

So I’ve been working on this concept for some time as a result of an Open Innovation process that I put together for two of our clients – both major international food companies – who are taking the brave first steps towards collaboratively innovation. I say first steps, but they’ve actually already been at this for over a year – and it’s only just recently that the legal teams on both sides have put together and signed enough agreements with three letter acronyms (NDA, CDA, JDA, etc) to justify their retainers and satisfy every eventuality that this collaboration might produce – cue the ability for the business teams (and me) to start formulating a way to actually work with each other. During this two day working session I got to thinking that there are several ways in which to collaboratively work on a specific problem – mainly either in parallel or serial modes. 

The classic way of working is in Serial mode – that is – you first pose the question to one team, then pass the results to another team for further building and idea gathering, then to another team to develop further, etc – one after another until you have a finished product.  This is also the model you follow if you simply put everyone in the same room and let them at the problem.

The alternative Parallel mode gives the same question to both teams and has them both ideating in isolation – only to share the results with each other after the end of the ideation period. Whilst it would seem to be a duplication of effort and ideas (and you’re right to think so) there are actually times when that would make sense – and even be preferable. 

Of course people then also are able to mix the two approaches – first a Parallel process, followed by a Serial process to get the desired result and I thought I’d spend a little time this week to explore some of these concepts.  As these aren’t fully formed yet – bear with me if in future posts I then continue to add more – but I figure if I don’t get started somewhere, it’ll be ages before I get around to explaining what I think is a pretty interesting process question. More to come later 🙂 

Questions to get you started

28 08 2008

I was asked today by a client to help them by identifying the questions they’d need to ask internally in order to start identifying the workflows and processes that they would need to use to achieve success – and I figured I’d share what I wrote here: 

For either internal or open innovation processes you need to ask yourself/your sponsor the following questions: 

1) What is it we’re trying to achieve? – why are we bothering to look for ideas? What impact is it going to have on the business? How big of an impact does that need to be? What kind of ideas are we looking for (incremental process improvements? tangential product ideas? blue sky concepts?) ?  – With all of these, make sure you’re identifying them in as measurable a terms as possible – ideally focusing on those that impact bottom line revenue – or the company’s ability to impact that revenue figure. The more you tie your program to direct value generation, the more the company will value your efforts, and ultimately deem your program successful and fund future efforts/program expansions. 

2) Where are these ideas coming from? – bearing in mind what we’re trying to achieve – what knowledge pool does it make sense for us to tap into? What are the implications of tapping into that knowledge source? Think of things like – can these people “play” well together in a collaborative environment? How will we incentivize them to take part? How much can we ask them to contribute? What kind of ideas will they be able to contribute? What security/legal/IP considerations are there to take into account for this group of people?  What do these ideas look like? And how do we want to receive and acknowledge them? 

3) What are we going to do with the ideas when we get them? – Do we need to further build/test them? If so – then to what level? Can collaborative input improve them – and if so, then who should be involved and in what way? Once the ideas are built, how are we going to bring them to fruition / realization? Is there a path to implementation identified? 

When working with all of these questions – you’ll find it easy to build a rather exhaustive list of things you could ask and end up with an idea form 20 pages long and a review process that would take a team of 20 people a year to complete – but remember KISS – Keep It Simple Stupid! The more complex you make a form, the more you put off people (especially externals!) from giving you their ideas (especially the more blue sky ones that have the largest potential for impact.  The more complex you make a review process, the more of a chore it becomes for the reviewers, and the less likely they are to do it. Simplicity is the key to Usability. 

Throughout the process consider whether you a) have all the information you MUST HAVE in order to consider an idea worthy of implementation and b) how much of this is just “nice to have” – A lot of the information you’ll be tempted to add in, you’ll want to primarily because it was already there beforehand and so you might as well add it again. One way around this temptation is to try and design your form without looking at the old one – start from scratch and see what you think NEEDS to be asked. Then use the existing form as a check up to make sure you haven’t missed anything vital – rather than a template from which to build on. 

Innovation Metrics – Part 3

13 08 2008

Innovation Metrics - Part 3


Innovation Metrics - Part 3


Continuing the thoughts on metrics.. 

3) The Three F’s – When beginning to consider innovation metrics – there are three main “F”’s that you need to measure – Form, Flow, and Function. 

    a. Form – Form is your ability to perform each part of the innovation process.

    b. Flow – Flow is your efficiency at both passing stuff through the individual elements of the process as well as the overall process itself.

    c. Function – Function looks at the program as a whole and its ability to achieve organizational goals, and the organization’s innovation capacity as a whole.

Taking the innovation process you’ve developed in section 2 (see last week’s post) above, you then go through the process figuring out what metrics are most appropriate taking into account the 3 F’s.  For most companies, the metrics will be broadly split into two sections – the form and flow of the pipeline itself – and the function of the program as a whole:


Innovation Metrics Worksheet - Form and Flow

Innovation Metrics Worksheet - Form and Flow

Some good examples of Form and Flow metrics: 

1) Problem Identification and Definition stage: 

  • Number of Problems submitted for consideration (form)
  • Number of individual event sponsors recruited (form) 
  • Number of Event Charters defined (form)
  • Number of Events accepted and set up  (flow)
  • Number of Events in each of the key corporate strategic areas (flow) 

2) Idea Collection, Building and Management 

  • Number of ideas/builds collected (form)
  • Number of Event Visitors / Contributors (form) 
  • Number of Idea/Build  Authors (form)
  • Number of ideas reviewed and concluded (flow)
  • Number of Ideas passed through to concept development (flow)

3) Concept/Opportunity Development

  • Number of Prototypes developed (form) 
  • Number of ideas going into Project Management (flow)
  • Potential value of ideas going to Project Management (flow) 
  • Average time idea spends in Concept Development (flow)

4) Project Management

  • Average time to project completion (form) 
  • Number of projects completed versus target (function)
  • Number of projects currently in the pipeline versus target (function)
  • Effective capacity versus capability (function)

5) Initial Launch

  • Target sales/cost reduction/process improvement versus actual (form)
  • Customer satisfaction (form)
  • Customer uptake versus local competitor/alternative (form)
  • Number of Launches proceeding to Expanded Launch (function)
  • Number of Launches failed (function)

6) Revise, Expand, and Re-Launch

  •  Contribution to profit margin from innovations

And for Innovation Function: 

Innovation Metrics Worksheet - Function

Innovation Metrics Worksheet - Function

Innovation Metrics – Part 2

8 08 2008

Continuing the thoughts on metrics from last week! : 

2.    Plan the Path – Now that you have a direction to point your innovation efforts at, it’s time to plan the path to get to that effort.  In the same way that strategy documents are formulated with multiple time points to set milestones for where the company wants to be at 1,3, and 5 years – so should your innovation plan and strategy as to how you’re going to help the company achieve those aims and the contribution the innovation program will make to the company’s strategic aims.

Your innovation pipeline will be led and directed by the strategic context of the program (see step 1 from last week) below, which follows the general form of: 

i) Find and Identify the problems or barriers to achieving the strategic objectives and define each tightly in terms of applicability, feasibility, and commitment to implementation of the solution. Then decide upon the order in which to tackle those problems.

ii) Collect ideas from internal/external sources on how to solve those problems/overcome the barriers, and begin the collaborative process to build those ideas into base concepts, selecting the most effective concepts/solutions for further development.

iii) Build out the selected concepts and begin testing for feasibility, cost constraints, market acceptance, etc – the various tests and building activities carried out in this stage(s) will vary depending on the company, industry, and target of the innovation process. 

iv) Decide upon and begin developing that project through effective project management

v) Launch the developed solution in a limited manner – to one geography, one factory, one business unit, etc – and tightly monitor and control to look for effects and improvements

vi) Redevelop based on insights from the limited launch and Re-launch to a wider audience, usually in stages. 

Underpinning the program are the dual disciplines of Portfolio Management (ensuring that the quality of the pipeline is sufficiently high and sufficiently robust in order to achieve the company goals) and Foundations (ensuring you have the culture, skill set, tools, processes, leadership,  etc to fully enable the innovation process) .  

The pipeline is meant to provide you with a guideline as to the general best practice of a robust innovation program – and you will find that most innovation programs will be able to be overlaid onto this model.  You’ll need to spend time understanding how to translate your overall program strategy, into a comprehensive program that fits your company’s capacity, culture, and aspirations.  Once you have your process set out, you’ll be ready to start sorting out what you’ll need to measure to ensure you’re achieving your aims. 

To be Continued (again 🙂  ) 

Innovation Metrics – Part 1

1 08 2008

Metrics are one of the most important elements of an innovation program’s success – determining everything from a program’s future direction – to whether a program even gets funded the following year.  Yet metrics are probably the least understood, and most misused activity in a corporate program agenda.  Understanding what to measure, and how to benchmark your performance is paramount to achieving both recognition and validation at the senior executive level – so how do you get it done?  I thought I’d paste in a step by step guide over the next few weeks to let you know!

Understanding the Innovation function

1. Start with Strategy – Key to understanding the metrics used to measure your innovation program is understanding what the real goal of that program is.  Your whole program should be focused at trying to help the company achieve its strategic objectives (if it’s not – make sure it’s realigned to do so or you risk having a marginalized program that will be cut at the first opportunity!) – so it makes sense to start your journey into metrics by getting a better understanding of what it is exactly that the organization is trying to achieve – where does it want to go? What are the barriers stopping the company from achieving it? Where are the key competitive forces?  These and other questions will lead you into a better understanding of how best to target the activities of your innovation efforts to best benefit the organization as a whole. 

Don’t be fooled into believing that the answer will always be via the creation and development of the company’s product set either.  Sometimes it could be a need to dramatically improve process efficiency that will drive a company forward. For other companies it could be a need to develop innovative business models to drive profitability in the forthcoming years – and yet others might be driven by a need to get out of a commoditized marketplace and develop an entirely new value proposition and new client base altogether (see my earlier White paper on Innovation Dimensions for more on the different dimensions an innovation program can and should be attacking).  Even within the same industry – different players will typically be driven by different environmental and competitive factors that will lead the decision to pursue a particular business strategy.  This strategy should then lead both the direction of your program and the metrics you use to measure the program’s effectiveness. In the same way that companies do not typically simply copy another’s business strategy blindly, neither should you simply copy their innovation metrics and benchmarks – as what’s appropriate for one company in a certain situation could be disastrous when applied to another.  With metrics, the wrong metrics will give you misleading information on your ability to help meet the company goals

I’ll be adding more in weeks to come! 

Non-Value Events and the Pursuit of Expansion

30 07 2008

I don’t think any client ever hears me say “focus on the value” enough times for the most part – but I will accept that there is a time and a place for running events that don’t directly add value creating ideas into the pipeline. 

One great example of such a time is in helping to broaden and expand a program by running an event that is broader in scope than your standard event in order to engage the most amount of people possible and give as many as possible a good experience of using the methodology.  

One recent client in the aerospace industry actually did this quite well – as part of their initial pilot period they ran both value enhancing events, but also ran one event for a senior marketing VP which was much ‘softer’ in nature – focusing more at understanding the characteristics of a new market they were thinking of attacking.  The value events drove some great results and perceived ROI despite being reasonably technical in nature and as a result had low participation rates. The non-value event got a fair amount of ideas on all sorts of subjects related to the new marketplace. Whilst it didn’t generate any actionable ideas, it did however generate a lot of interest in the tool from potential event sponsors and enquiries about how it could be used. The client then pointed to the ROI figures from the value-driven events to convince future event sponsors of what could be achieved with it. 

I think companies nowadays should drive a mix of events – and as with so many things in business, I suggest using the trusty 80:20 principle for figuring out the correct split of value to non-value: 80 % of your events should be focused on driving new and novel value for the company. 20% of your events should be focused on topics/methods designed to market the innovation program to a wider audience and thus expand the overall reach of innovation within your company.

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