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4 ways leaders can get more from their company’s innovation efforts

by GREG SATELL is a popular speaker and consultant

October 11, 2017 | 1:12 pm
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A recent McKinsey report found that while 84% of corporate executives think innovation is key to achieving growth objectives, only 6% are satisfied with the innovation performance of their firm.

 

One reason for the paltry performance is that innovation is often considered to be something that’s “nice to have” rather than essential. Another pervasive reason is that senior executives are trained as operators, not innovators. And there’s a fundamental conflict between innovation and optimizing an existing operation.

 

Here are four things leaders can do to close the innovation gap:

 

  1. DON’T GET TRAPPED IN YOUR PROFIT AND LOSS STATEMENT: Successful innovators prepare for irrelevance long in advance. IBM research, for example, has consistently made breakthroughs in a number of fields long before their commercial value became clear. Google’s X division was set up as a “moonshot factory” to pursue opportunities unrelated to its current business. The data giant Experian set up its DataLabs unit to work separately from its operational divisions.

None of these operations have defined revenue or profit goals, because their purpose is to explore new opportunities that can’t be quantified. Nevertheless, these exploratory efforts provide excellent return on investment over the long term.

 

  1. FOCUS ON PROBLEMS, NOT IDEAS: A common misconception about innovation is that it is about ideas. It’s not. The truth is nobody cares about what ideas you have. They care about what problems you can solve. In innovation, identifying a meaningful problem is half the job.

 

That’s why the organizations that are able to innovate consistently develop a systematic process for identifying new problems outside the normal operational content. For example, Experian DataLabs meets with customers to “find out what’s giving them agita” and then typically comes back with a solution prototype within 90 days.

 

  1. CLASSIFY THE PROBLEM BEFORE YOU DECIDE ON A SOLUTION: Different types of problems require different solutions. When Steve Jobs set out to create the iPod, he defined the problem as “1,000 songs in my pocket,” which specified a hard drive of a certain size and capacity. It was also clear what capabilities were needed to solve the problem — that of a hard drive manufacturer. Once Apple found the right supplier, the iPod was a fairly standard problem to solve.

 

With some problems, such as curing cancer or overcoming climate change, neither the problem nor the domain is well-defined, and a more exploratory approach and focus on research are required.

 

  1. BUILD FOR THE FEW, NOT THE MANY: New ideas, almost by definition, are not well-understood and tend not to perform very well. Consider the case of Google Glass. When it launched as a consumer product, it was a disaster, inspiring a huge backlash against the “glassholes” who bought them. Today, however, the device is gaining traction as an industrial tool and is proving effective at improving productivity, safety, documenting procedures and training for new tasks.

 

 

 

 

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by GREG SATELL is a popular speaker and consultant

October 11, 2017 | 1:12 pm
12893  |   93   |   0  |   Start Conversation

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