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Monthly Archives: October 2015

What Causes Corporate Innovation to Fail?

(Originally posted on The Innovation Workgroup’s LinkedIn page, 5th October, 2015)

Failure is a strong word. Few corporate managers would readily admit that their innovation programs have not succeeded. An honest assessment, however, would reveal that in many companies, innovation succeeds only on sporadic occasions. In too many cases, innovation is nothing more than a management buzzword or slogan; no results are ever achieved.

It does no good to crib about the lack of results from corporate innovation programs. It makes much more sense to study the causes of failure and to take corrective action.

In my view, there are only two basic reasons why corporate innovation fails: not enough commitment and not enough use of best practices.

The Causes of Corporate Innovation Failure

Managed innovation is designed to produce effective solutions as quickly and inexpensively as possible. At the same time, managed innovation is not free of cost, and it does take time. When management does not devote enough resources to innovation, results will suffer.

Resources come in two forms, human and financial. Human resources are by far the most important. Employees must be assigned to innovate and then given the time to complete the task. Failure occurs when managers refuse to release their employees to work on innovation.

Funding during a world-class innovation initiative may be required for consulting services, field research, and experiments. I have met managers who were reluctant to spend Rs.50,000 to test a solution that had the potential to produce 20 crores in revenue. The company saved Rs.50,000, but it had no other solution in hand with the potential to generate that much revenue.

Best practices are also essential for innovation success. We offer a variety of tools and methods for each of the three steps in the process: Discover, Invent, Refine.

Tension sometimes occurs between the new methods we introduce and the old ways of doing business. For instance, one team did fantastic work on the first two steps under our guidance. They identified an unfilled need and invented a solution to meet the need.

However, during the Refinement step, they decided not to use the method and tools that we recommend, and they went forward based on their existing product development process. After more than six months and considerable expense, they still had not refined the new product to the point where they could sell it.

With sufficient resources and best practices, innovation can produce breakthrough solutions worth hundreds or even thousands of crores on a regular basis. How does your company rate on these essential parameters? What are you doing to make your innovation program successful? Your comments below are most welcome.

Additional reading on this topic: The Problem with Corporate Innovation

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Posted by on October 21, 2015 in Uncategorized

 

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Innovation: Should You Trust Your Gut?

(Originally posted on The Innovation Workgroup’s LinkedIn page, 22nd September, 2015)

Innovators seem to lean toward one of two schools of thought, the creativity school and the science school. What can these schools of thought teach us? How important are the lessons of each school for success in innovation?

The advocates of creativity stress that original ideas come unbidden to the minds of creative individuals. They point to successful contrarians, such as Steve Jobs, who had great faith in their own intuition and were later proved right.

The proponents of science look at innovation as a process where assumptions and ideas are challenged, tested and validated. Hard data—not gut feelings—are the gold standard for these innovators.

Creativity or Science?

During a recent innovation project, a marketing manager combined both of these schools of thought in an unusual way. She said that she had been a big advocate of one of our inventions, but after prototyping and testing it, she was convinced that the solution was not effective and would not work.

This sounded like a logical progression. Her gut made her optimistic at first that the prototype would work, but the experimental data did not support her earlier feeling, so she changed her mind. However, when I probed further, I learned that something else was at work. The marketing manager’s change of mind was really a change of heart.

It turns out that the experiment was not well-designed, and the results were not tracked in order to apply statistical tests. The marketing manager, who had trusted her gut at the beginning, was still trusting her gut – her general impressions and intuition – rather than the data. She was ready to abandon a promising solution without giving it a fair, scientific test.

The fourth principle of successful innovation that I teach is, “Informed innovation produces the best results.” I devote a lot of effort to persuading our clients to innovate based on information: facts and insights. I argue that innovation based on hunches, guesses and assumptions—on gut instinct—is bound to fail far more often than it succeeds.

Before you get too angry or upset, kindly note I acknowledge, appreciate and support the proper use of feelings, intuition and creativity in the innovation process. Innovation is an inherently uncertain process. No one can predict the future with complete accuracy to see which innovations will succeed. Judgment and heartfelt confidence—even deep convictions that go against the prevailing wisdom—are sometimes required to propose and promote innovative ideas.

The thing that troubles me is that so many managers, even at the top levels of our large corporations, make many of their decisions according to their guts instead of using and relying upon the scientific method to obtain data to validate their feelings before making a decision.

As much as possible, we want our clients to become innovation scientists. It’s fine to develop hypotheses using their intuition. Then, the right thing to do is to design experiments to test and validate those hypotheses. When the experiments reveal some problems with the hypothesis, the innovator is in a position to change course or to abandon the exercise before it becomes very costly. When the experimental data confirm the hypothesis, the innovator can move ahead with confidence.

What do you think? Do you trust intuition and creativity above all? Do you insist on testing and analysis at every stage? What is the right balance between the two schools of thought? Please post your comments below.

Additional reading on this topic: The art and science of innovation

 
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Posted by on October 21, 2015 in Uncategorized

 

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A Rare Peek Inside an Innovation Leader’s Culture

(Originally posted on The Innovation Workgroup’s LinkedIn page, 8th September, 2015)

Don’t get too comfortable with your company’s innovation process, even if you’re highly successful.

That’s the message in Robert Tucker’s fascinating blog post about how to build a culture of innovation. In 2005, Tucker was granted a rare inside look at one of the world’s most innovative companies, Nokia. What he found was troublesome, despite the company’s settled reputation as an innovation leader.

Tucker dismissed his negative thoughts at the time, but looking back, what he witnessed proved to be a portent of Nokia’s coming decline. From its position as a world-beater – the unchallenged market leader in mobile phone manufacturing – Nokia descended in a few years to the point where it sold its mobile phone division to Microsoft for a fraction of its earlier value.

How can you avoid a similar fate?

Sustaining Innovation Over Time

Tucker reports that, even at its peak, Nokia’s culture was characterized by some less-than-best features. Some, such as a lack of time for innovation, are common among companies at all levels. However, Nokia also had several cultural traits that are more typically found in more traditional, conservative firms.

For instance, Tucker observed that Nokia had a short-term focus. It suffered from “large corporation syndrome,” meaning that the organization moved slowly with a lot of bureaucratic processes. There was scant financial support for experimentation. Mid-managers were ready to tell lower-level employees to simply forget about introducing any new ideas of their own. Evidently, at Nokia, all good ideas had to come from the top down.

Perhaps the most interesting and relevant problem with Nokia’s innovation culture in 2005 was the overemphasis on technology. People with technical backgrounds tended to rise to the top rather than those with exposure to services. Predictably, these leaders tended to discount any non-technical innovations as “not real.”

An overemphasis on technology is likely to result in failed innovation. Nokia had lots of good technologies, but the company’s downward trend began when its competitors came up with the clamshell “flip phone,” a different form factor that caught Nokia flatfooted. Later, Nokia lost market share when it did not compete effectively in areas such as price and user experience.

Note that during this period, Nokia was spending $1 billion a year on innovation. The company was highly innovative, but its focus was too much on engineering and not enough on customers.

The most important take-away from this sad tale is that a culture of innovation must begin with a passionate focus on customers. Technology is fundamental, but as I teach, no one has yet invented a technology that can purchase itself. Technological innovations will only succeed if they create value for customers. Therefore, to sustain a culture of innovation, a company must continuously invest human and financial resources to learn everything there is to know about customers in order to invent solutions that will meet their needs.

How is the innovation culture in your organization? Your comments below are eagerly sought.

Additional reading on this topic: Six Essentials to Cultivating an Innovation Culture

 
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Posted by on October 21, 2015 in Uncategorized

 

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Messy Innovation in India?

(Originally posted on The Innovation Workgroup’s LinkedIn page, 26th August, 2015)

In India, I have encountered a fair degree of impatience and doubt with regard to the innovation process. Some companies just want an instant answer, not a process that will lead to a superior solution. Some want to identify a customer for their existing invention, not a fresh invention that will satisfy customers. And, of course, everyone wants an inexpensive engagement from the innovation consultant!

A blog post by Ralph Ohr helped me to understand some of the reasons for these preferences, which are not particular to India, but are seen more frequently here than in many other countries.

Ohr points out that most companies start with an idea, then they create a solution, and only then do they try to find a customer. This is not ideal, but it is the reality in many firms, especially in the software industry.

Read more about the ideal approach to innovation

Ohr’s ideal scenario is the same one that we advocate: an approach that begins with need identification first and then calls for an invention to address the need. This approach is widely known as Design Thinking. Why do so many Indian companies have a hard time with this ideal approach?

The truth is that the front end of innovation is messy – the term of art is “fuzzy” – and managers in India are trained, like all good engineers, to look for precision and certainty, not messiness and risk. An innovation project should begin with exploration, not invention. And what is exploration but a leap into the unknown?

The risks of exploration are real. The cost of exploration can be significant. There is no guarantee that the explorer will find anything of value during his journey. Even if a promising territory is discovered, there is no way to know in advance whether the sponsor of the journey will be able to exploit the discovery.

Ohr suggests that only wealthy companies, especially those that are consumer rather than engineering driven, typically invest in exploratory innovation projects. I beg to differ. We have seen great results at all sizes of firms, from massive to tiny, that use the Design Thinking approach. Even dyed-in-the-wool engineering teams with little previous customer exposure have made breakthrough discoveries by using the tools of world-class innovation.

To compare the two approaches to innovation, read Ohr’s blog post, linked here. Then decide which one will work best in your organization. Your comments would be most welcome.

Additional reading on this topic: One Size Doesn’t Fit All Innovation

 
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Posted by on October 21, 2015 in Uncategorized

 

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Leading Innovation is Different

(Originally posted on The Innovation Workgroup’s LinkedIn page, 11th August, 2015)

“Leading innovation is about creating the space where people are willing and able to do the hard work of innovative problem solving.” So says Harvard Business School professor Linda Hill after she studied the most successful leaders of innovation in the business world.

To lead innovation effectively, you may have to change some of your attitudes and behaviors. The desire for managerial certainty must be replaced with the skill of managing uncertainty, the desire for conformity must be replaced with the skill of managing diversity, and the desire for control must be replaced with the skill of developing the independence and initiative of individual employees.

Certainty vs. Uncertainty

Innovation is the polar opposite of certainty because the product of innovation is unknown prior to the innovation effort. You can’t predict where an innovation effort will lead. Moreover, a smart innovation leader will make course corrections during an innovation project to take into account what is being learned and discovered along the way. Managers who are comfortable only with the planning, organization and control techniques taught in business schools may not be able to adjust to the uncertain environment of innovation.

Conformity vs. Diversity

Dr. Hill quotes Bill Coughran, who led operations at Google, as saying, “Hire people who argue with you.” Coughran understands that world-class innovation requires divergent thinking, even, at times, the consideration of ideas that are diametrically opposed to each other. If a manager is one of those know-it-all types who thinks he is the only intelligent life form on the planet, and that his subordinates are ignorant and stupid, he will squelch disagreement and prevent good ideas from surfacing.

Controlling vs. Developing

This is about whose agenda will be followed in the practice of innovation. A world-class innovation team includes capable, intelligent, prolific innovators. Smart innovation leaders will encourage and equip each team member to give his or her best. Managers who want to pursue only their goals using only their methods will never get top production from their innovation teams, and may discourage team members to the point where they take their innovative talents elsewhere.

Want to become a more effective innovation leader? You can start by watching Dr. Linda Hill’s TED talk. Your comments below are most welcome.

Additional reading on this topic: How to manage for collective creativity

 
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Posted by on October 21, 2015 in Uncategorized

 

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The Link Between Education and Innovation

(Originally posted on The Innovation Workgroup’s LinkedIn page, 28th July, 2015)

N R Narayana Murthy has called out the Indian higher education system – even the IITs and IISc — for a glaring deficiency in the area of research. He maintains that this deficiency results in a dearth of great innovations in Indian companies, as well. Do you agree with him?

Speaking at the Indian Institute of Science, Murthy said, “Yet, when our students leave the portals of these institutions, there is not much impactful work they have accomplished in research here. What is worse is that there is not much impactful work they accomplish when they go into the real world here in India.” 

I’m sorry to report that my experience of Indian higher education and Indian industry aligns well with Mr. Murthy’s assessment –with some notable exceptions. Instead of conducting the kind of research and inventing things that improve life and solve problems for billions around the globe, we tend to make excuses. We focus on modest goals, and we accept mediocre outcomes.

To me, this is a terrible waste of our potential. India has the best pool of human resources of any country, and we could lead the world if we equipped and managed them more effectively. What should we do to improve our outcomes?

Murthy’s model is the Massachusetts Institute of Technology (MIT). MIT’s selects problems of interest and focuses its research on those. The university’s principle is that “Programs advanced through the MIT Innovation Initiative will support the acceleration of ideas-to-impact to confront the significant global challenges we currently face in areas ranging from energy and climate change, to global healthcare and poverty, to food and water scarcity, and more.”

Recommendation 1: Choose Challenges. If each Indian college and institute would adopt at least one such national or global challenge and focus its research and teaching efforts on that issue, I believe that we would see a dramatic increase in the number of inventions that we produce. Likewise, if more of our firms would work strategically on solving such problems, the odds would increase that the next game-changing product or service will come from India.

Recommendation 2: Form Partnerships. Top global universities partner with industry to build their innovative capabilities. Arizona State University, earlier a second-tier school, now receives 8 billion dollars a year in sponsorships and has joined the exclusive roster of elite institutions known as research universities.

In India, different spending priorities keep us from achieving something similar.Universities invest in teaching, not research, because it brings immediate returns. Corporations invest in activities that add to the bottom line quickly and have a high probability of success, unlike research, whose outcomes are uncertain. We invest for short-term gains, whereas innovation often requires a longer-term view.

To improve our R&D, I propose that we start modestly, with more universities improving their research capabilities and then seeking companies to sponsor small, manageable projects. Once the universities demonstrate the value of their work, business leaders will have more confidence to support expansion and growth. Also, more corporations can initiate research projects that utilize existing college R&D resources.

Recommendation 3: Incubate Start-Ups. Such institutions as IIT Bombay, IMT Ghaziabad and Amity University are already fostering new businesses. This activity promotes the idea of innovation. It gives professors and students something to work for and look forward to if they can develop and apply their creative and innovative talents.

How realistic are my recommendations? If they are implemented, will they result in more impactful innovations coming from Indian universities and corporations? Your comments are eagerly sought.

Additional reading on this topic: Full text: Narayana Murthy questions the contribution of IITs and IISc in the last 60 years

 
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Posted by on October 21, 2015 in Uncategorized

 

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Which Approach Produces Better Results?

(Originally posted on The Innovation Workgroup’s LinkedIn page, 13th July, 2015)

When faced with a challenge, there are two basic approaches to find the right response. One is to study. The other is to take action.

Albert Einstein epitomized the first approach. He said that, given one hour to solve a problem, he would spent 55 minutes thinking about it and only then try to solve it.

Google exemplifies the second approach. Once a new idea is approved, Google’s next step is usually to build a working version and launch it to a subset of their users to see what happens.

Which of these two approaches produces more success?

In our innovation projects, we find that the greatest mistakes happen when teams advance to action before spending enough time on study. For example, one company did excellent work on the first two phases of innovation, Discovery and Invention. The result of their work was a solid short list of promising projects, including enthusiastic feedback from customers who wanted the company to create a new product.

With such encouraging results, the company swung into action. They created a working model of the product, and then another. However, each time a working model was presented, the customers had some objection that required the company to redesign the product. The company overlooked our approach to Step 3 of the innovation process: Refinement. In their bias toward action, they missed the chance to learn about the customers’ objections through lower-cost study instead of expensive and time-consuming product design.

Similar mistakes occur frequently during Step 1: Discovery. The purpose of this step is to recognize a valuable insight that will lead to a breakthrough innovation. Some companies omit this step altogether. Others study only until they get their first positive results and then act based on premature conclusions, a bit like consultants, who are sometimes teased for believing that a single data point defines a trend.

World-class innovation addresses the dichotomy between study and action in a clever way. Rather than bookish learning, mere reflection, or blind action, a scientific approach that combines study and action is the solution. The goal is to learn, and each step in the process should be a well-designed experiment or research activity that will produce useful knowledge.

The linked article discusses some of the author’s experiences with start-ups, where the tension between study and action led to some difficult – and wrong – decisions. How well do you manage this tension in your innovation process?

Additional reading on this topic: When It Comes To Digital Innovation, Less Action, More Thought

 
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Posted by on October 21, 2015 in Uncategorized

 

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