GUEST POST from Jeffrey Phillips

I’m going to let you in on a secret.  Doing innovation isn’t really all that hard, once you get the hang of it.  Yes, there are dozens of methodologies and approaches. You can tap into your employees and/or your customer base for ideas.  You can search for interesting technologies in research labs and universities.  You can prototype, test and tweak ideas based on customer pilots.  In fact, you can do just about anything in innovation.  That is, if you can get it started.

What few people seem to realize, except innovation consultants, is that innovation is the proverbial irresistible force.  Once the momentum gets started and people understand what to do, innovation can become a powerful force.  That’s not to say there aren’t resisters along the way, but as people gain skills and insights, and get to create new things of value, innovation can take on a life of its own.  But this is predicated on overcoming the immovable object – inertia, distraction, focus on other priorities, budgets, short term thinking.  Call it what you will, there is a huge barrier to getting started.

In the last few weeks we’ve been approached by several firms who want to become more innovative.  They have executive backing to start an innovation team and want to create an innovation discipline, not just deliver one innovative product or service.  Having been to a few of these rodeos, I can tell them exactly what will happen – which is, distraction.  You see, innovation is important, but rarely urgent.  The urgent stuff constantly creeps in to disrupt the important.  An executive meeting scheduled for January to approve an innovation project was pushed off to March due to other priorities.  Funding for an innovation team was held up due to a poor quarter.  Simply getting started with an innovation effort is a monumental task.  There are several reasons why this is true.

Everyone’s an innovator until the money is due

CEOs regularly respond to surveys stating that innovation is one of their top three priorities.  Yet a recent NSF survey reported that only 20% of manufacturing companies and 8% of services companies reported a significant innovation over a three year period.  There’s a big talking-doing gap, created because there are rewards for simply talking about innovation, but definite costs for doing something.

Covey was right

The urgent always overcomes the important, and today is far more urgent than tomorrow is important.  Creating an innovation team, capability or discipline is an investment in the future and a cost today.  Given the competitive nature of the current business environment, it is easy to emphasize costs and efficiency today rather than profits and possibilities in the future.  Innovation is almost always important but not urgent, and when it is urgent that is a signal that you are too late.

Inertia

Nothing and nobody likes change, and our business as usual cultures have adapted themselves well to an effective, efficient capability.  We’ve honed our operating models to peak efficiency, but in doing so made them far less flexible, less nimble and much more suspicious of change.  Doing anything new or different creates distractions, forces change and uncertainty on people and programs that have spent years avoiding change and uncertainty.  Inertia and fear of the unknown make innovation difficult to start.

Get a plan and get moving

The old joke goes – don’t just do something, stand there – and it’s reasonably true.  While I encourage my clients to get started as quickly as possible, because inevitably innovation will be derailed and delayed, you can’t just take a running leap.  You need some semblance of a plan, and if you aren’t given one by a sponsor, then just make one up and dare people to tell you you are wrong.  Define your plan, and get started as quickly as possible.  You will face delays, but by the time the slothful operations and engines of your business realize what you’ve done, their only argument will be that they aren’t ready.  They can’t debate the importance of innovation and can only quibble about your goals and direction.

You will face the important/urgent dichotomy, and you will face resistance, and you will face inertia as a team starting an innovation effort.  You can allow and accept that, which will lead to questions six months down the road about what you’ve accomplished.  Little or nothing.  Or, you can define a plan and strike out quickly, forcing the naysayers to catch up.  Believe me, it is better to be out ahead, with a head of steam, than trying to justify your important but not urgent project.

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GUEST POST from Jeffrey Phillips

I’ve made the argument previously that corporate culture is one of the most significant barriers to innovation.  Yet corporate culture is ephemeral, hard to grasp and change.  Like Potter Stewart’s definition of pornography, you can’t define it, but you know it when you see it.  Why is it that culture is so powerful yet so hard to define and manage?  If culture lacks definition and isn’t transparent, why is it such a major obstacle to innovation?  Finally, if culture is powerful, what does your culture do to your innovators?

First, we ought to debate whether or not “corporate culture” exists.  Certainly we can’t see it, can’t “cage” it.  Corporate culture is really the belief system a company has about itself and how it operates.  It can’t be seen, and in most cases can’t be documented or defined.  While many executives would like to believe that they influence and control the culture, they are usually wrong.  Culture is far more powerful than an executive who will take on a role for just a few years.  The culture, like a rubber band, will simply snap back into place once the executive who attempts to promote some change moves on to another position.

Really, arguing about culture is like debating why an airplane can fly.  We know there are scientific principles and aerodynamic reasons for flight, but most of us can’t describe them yet we willing strap ourselves in and read comfortably during the flight.  Culture is similar to that – most executives can’t define and can’t control corporate culture, but willingly partake of the impact and benefits.

Why is corporate culture powerful?

Corporate culture is powerful for at least three significant reasons.  First, it defines what people should focus on and what they should avoid.  Yes, this should come from managers or executives, but there aren’t enough managers or executives to go around telling people what to focus on.  Culture, formal and informal, defines what is valuable, what is important and what will be rewarded.  Second, culture is cohesive.  It helps a broadly distributed organization work to common purposes, without constantly consulting a documented process map or decision tree.  Culture helps people in very disparate organizations make similar decisions given the same data.  Third, culture acts as both an on-boarding mechanism and as a guidepost to bring people into line, or cause people who aren’t aligned to the culture to leave.  Culture reinforces itself – attracting more people who think similarly to the culture and forcing those with different perspectives to change their thinking or encouraging them to leave.  These powers are vast and important – they shape the way work gets done and how people think.

Why is culture important for innovators?

That last sentence says it all – culture shapes the way work gets done and how people think.  Culture reinforces specific goals, work styles and perspectives and rejects others.  When new ideas arise in a company, the culture quickly surrounds the ideas like antibodies, evaluating the idea to determine if 1) it is a threat to the culture and 2) if it is within acceptable bounds of the existing frameworks.  If either of these concepts isn’t true, the culture will try to reject, stymie or change the idea until it is killed or changed to fit within the cultural framework.

What does existing culture do to innovators?

Unless your existing culture sponsors and encourages innovation (a very small minority of companies) culture has a corrosive effect on most people who want to explore and promote innovation.  Most cultures exist to protect and defend “business as usual”, and innovation in inevitably a threat to existing business process.  Therefore, culture blocks innovation and innovators, telling them “we’ve never done that before” or “that failed the last time we tried it”.  Culture ensures that safe, incremental ideas are funded and new, risky ideas don’t receive resources or funding.  Innovators are constantly scrambling to find money, time and resources to pursue even simple ideas.  Further, the culture presents a skeptical face to new ideas.  Innovators are asked – do you really think that will fly?  Their ideas are belittled.  The tools they use, especially tools to discover future needs or understand how the future will unfold, seem strange and unfamiliar.  The work seems frivolous next to the “hard” and valuable work of achieving the next quarter.  In short, existing cultures isolate, frustrate, belittle and starve good innovators.  Which is why far more entrepreneurial firms create interesting new products than large corporations.

Can you create a culture of innovation in an existing business as usual company?

I think the answer is “yes”, but the time, focus and commitment necessary is significant – starting from the most senior executives and working through to the most important keepers of the culture – middle managers.  Creating a culture of innovation starts by reframing the importance of innovation, carefully defining what innovation is and then constantly reinforcing the importance of innovation by setting specific goals, measuring innovation progress and changing compensation and reward programs to reinforce innovation.  And “innovation” isn’t a “this year” thing, by the way.  I hear far too frequently that someone’s CEO has decided that innovation is going to be the focus for the year.  As if your corporate culture is intimidated by a yearly focus, or can be whipped into shape within that timeframe – or will remain in its new state once the focus changes.

There is no free lunch, especially where corporate culture is concerned.  Too many firms, too many executives have become comfortable with cultures that return enough to keep shareholders happy but those same cultures resist innovation.  Your innovators are frustrated, isolated and angry, and are voting with their feet.  As more and more innovators leave, the short-term, efficient, business as usual culture is only reinforced, creating a vicious cycle of ever more efficiency and increasingly, no capability or appetite for innovation.

Your culture may seem innocuous, but many cultures are kryptonite to innovators.  And, unlike in the Superman comic strip, there more to be done than simply removing the kryptonite in order to get more innovation.  You’ll need innovators who have skills and understand how to get things done.  The absence of innovation barriers by itself will not ensure innovation success.

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GUEST POST from Jeffrey Phillips

I was speaking with a client recently who reminded me of the metrics her CEO had set out for innovative new ideas.  While I think it is important to have clear goals and quantifiable metrics for innovations, I was a bit apprehensive about these measurements. Take a look at them and see if you can guess which one gives me the most concern:

• Concept must generate more than $30M annually in revenue
• Must command at least a 40% margin
• Must be protectable
• and must do all of this in less than five years

As they say, last, but not least.

It’s great that this firm has very clear milestones and evaluation metrics for its new ideas.  Clear expectations help teams make decisions.  But I have some real concerns with this set of metrics, as reasonable as it may seem.

I don’t have a lot of heartburn with the margin requirement.  Clearly a new product should drive more margin than an existing product, or at least attract a larger share of the market.  It’s also valuable to have ideas that are protectable, so that your team can defend the concept and hope to prevent new entrants who simply copy the idea.

No, the real concern I have is with the revenue achievement and the timeframe.  As a business gets larger it becomes less interested in mucking around with “small” opportunities.  They require a lot of overhead and don’t generate enough revenue to warrant the attention they demand.  The minimum revenue size of a product in order to achieve thresholds varies from firm to firm, but in this case if a product couldn’t achieve at least $30M in revenue within five years of the launch of the idea, then the executives didn’t want it presented, regardless of the margin it would generate.

How does that work in the “real world”?  Can we get some statistics on firms, or products that grow rapidly?  In fact, we can.  The website linked below examined some of the fastest growing technology firms, from their start to achievement of $50M in revenue and onward to greater growth.  Remember these are fast growing technology firms.  Go take a look and come back.  I’ll wait.

Did you note the message near the bottom?  Almost 50% of these fast growing technology firms took more than eight years to achieve $50M in revenues. And these are fast growing firms in a hot sector.

Furthermore, these firms reflect entrepreneurial firms trying to win new business, without any other encumbrances.  They don’t compete with other products in a portfolio, don’t compete for resources with other products, don’t have other executives who aren’t sure they want that product to succeed.

Now, think again about $30M in five years.  If venture backed entrepreneurial firms in the software and hardware industries found it difficult to achieve this kind of growth, what do you think the odds are of a product in a relatively stodgy industrial or agricultural or even pharmaceutical firm will be able to do the same?  That’s right, pretty low.  Here’s a question – of all the products that the firm has created and released in the last “x” years, how many have achieved what you’ve now established as the benchmark for innovation and growth?

So, this presents a quandary: while we need goals and metrics, do we risk establishing growth and revenue goals that are difficult for even fast growing, free standing technology firms to beat?  And, if so, do we simply doom all our ideas to a quick death on the management decisioning chopping block?  What are the right goals, given that these may be a bit aggressive?

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GUEST POST from Jeffrey Phillips

Last week I was talking with a client about the reasons why innovation seemed to be difficult in her business. We talked about the usual suspects – commitment, funding, focus and so on – and then she said: of course, there’s also the tyranny of today. There are some moments in a person’s life you have to look back and wonder if they were scripted. She actually said the tyranny of today, and if it were possible I would have reached through the phone and given her a hug.

The tyranny of today? What’s not to like? For innovators the tyranny of today is personified as Lex Luthor, superman’s alter ego. The tyranny of today as a phrase does more, with less, to describe the barriers to innovation than almost any description I’ve heard. And I should know, I wrote Relentless Innovation trying to define how to overcome the tyranny of today.

What’s today got to do with it?

Today has become paramount in business thinking. What can we solve today, what problems exist today, what are our revenues today? This focus on today has led to ever shortening timeframes, smaller and smaller decisions, less and less risk and far less investigation into future needs and trends. Today is paramount, and as I’ve argued before we prize fire-fighting far more than fire prevention or fire proofing. Rather than investigate emerging threats and create new products and services, we heap praise on people who fight the fires today that should have been predicted and avoided months and years ago. But the tyranny of today doesn’t allow that to happen.

One big reason for the tyranny of today? An “all hands on deck” mentality, which means that all available resources are focused on today’s issues, today’s needs, today’s problems. Ever more efficient operating models have pared organizations to the bone, meaning that anyone not working on today’s issues seem superfluous. Until the new products and services cupboard is bare because no one was working on new products and services.

We’ve created very powerful “business as usual” engines, and increasing, these engines no longer serve us, we serve them. The BAU models dictate how we think, how we deploy resources and how we reward people. The tyranny of today is based on our business as usual operating models and the perverted ways in which they drive our strategies, our thinking and the way we apply resources.

Is today important?

Sure. Today is very important, but change is inevitable and the pace of change is increasing. If there were no change then maintaining and improving the status quo would be paramount. Since the forces of change are inexorable, any firm developing more skills at standing still, locked in they tyranny of today is simply marking time till its own obsolescence. Since we KNOW that change is occurring, since we know that the pace of change is accelerating, since we know that the cost of entry for new competitors is decreasing and the number of competitors is increasing, deep down we know that while today is important, tomorrow is even more uncertain. And perhaps that increasing uncertainty causes us to flinch away, ignoring what’s behind the dark door for what’s in the evident present. But simply ignoring the future, honing the present business model and hoping that change will pass us by is not strategy, it’s the absence of strategy, and abdication of decision making.

Focus on the Future

Rather than wait passively for the future to unfold, stymied by the tyranny of today and existing business as usual models, we need to create an equally important “focus on the future”. Balancing a tyranny of today, with its requisite efficiency and short term goals with a focus on the future, to understand and embrace new products, services and business models, restores a balance between reactive, short term efficiency and proactive, long term vision. And that balance creates a more nimble, flexible company that can survive the tyranny of today and overcome the fears of the future.

Next time the tyranny of today forces your firm into decisions or actions that defer innovation and promote short term thinking, ask yourself and your team: can we balance the tyranny of today with a focus on the future?

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GUEST POST from Jeffrey Phillips

So my wife’s favorite aunt has arrived for a visit. This sounds like the set up for a vaudeville punch line but actually leads to some great stuff. We sat at dinner last night and she turned to me and asked “So what does your firm with the funny name (OVO) do, anyway?” I love slash hate this question, especially from people who aren’t quite sure what “the Google” is, anyway.

So I broke it down as best as I could. I told her that we helped companies try to create new ideas that become new products and services. We help with new product and service discovery, refinement and identification. We help them innovate.

She thought about that for a while, and in her own inimitable way said “that sounds wonderful”. Actually, it can be.

But it left me thinking about what it is that an innovation consulting firm does, and I think I’ve managed to break it down into at least four significant offerings that help me think about what we do, and hopefully help you think about what you should expect from an innovation consultant.

First, I like to think we help organizations rediscover their inner entrepreneur. Every firm at one time was based on a single idea. The founder or founders had an idea that they could offer value – products, services or business models – that were unique and different. Over time what happens is that the business becomes much more focused on keeping the existing businesses afloat and loses focus on the creation of new things. In fact, keeping the existing business afloat and profitable becomes such an effort that new, different and disruptive things are shoved aside or cut. So our first job is to remind firms that they were once innovators, and have to be innovators again in order to grow. We remind them by helping the executive teams create a strategic vision and communicate that vision that reminds the business about the importance and relevance of innovation. We help by establishing goals – for example, 3M’s goal that 30% of its revenue must come from products generated in the last five years. Your goals and strategies don’t have to match 3M’s, but you must have a specific goal for innovation, just as the initial founders did. Asking for innovation isn’t enough.

Second, we remind people about the future. All new ideas will launch in a future that’s not quite the same as today. Having a “future orientation” is important because innovators need to identify the needs and wants of customers and address them before others do, otherwise you are simply a fast follower at best. In the hustle and bustle of a large corporate enterprise, the vast majority of the people are worried about the next quarter. That’s how they are compensated and what the market dictates. Very few people are worried about a 3 to 5 year horizon, but that’s what will make or break the company. The future, as William Gibson has pointed out, is already here, it’s just not widely distributed. In other words, without a lot of work we can begin to discover what’s likely to happen, and how that will effect our products, services, customers and markets. And with some luck, we can create new products and services that allow us to take advantage of the unfolding future.

Third, we create a conduit for ideas. I’ve yet to enter a firm that doesn’t have lots of ideas, and in many cases we’ll encounter not just “lots of ideas” but some actual good ones as well. The problem isn’t ideas. The problem, strangely enough, is the process for ideas. In firms that have highly automated processes for just about everything, including time for stretching, snacking and restroom breaks, the most important process – the one that will create the valuable new products and services – is non-existent. In most cases people with good ideas simply give up, frustrated with the fact that there appears to be no way to present a good new idea and move it to some commercialization. That’s because the firm is organized in stovepipes and silos, and any idea that doesn’t align to those silos is automatically rejected. Even ideas within silos are suspect, because they’ll upset the natural order of things that we have humming along so nicely. People forget that it’s not the responsibility of the business to simply operate efficiently. It needs to create new things as well, and anyone who has been present at the birth of a baby or a product can tell you that it is messy, loud and frequently not on time. Note as well that I didn’t say good innovation consultants “create” ideas. My belief is that we assist your teams to find the great ideas that are “out there”. If you rely on innovation consultants to “give you” ideas, you’ve outsourced your strategic thinking.

Interestingly, innovators are also storytellers, because we tell these stories to influence our customers to do things that they know deep down they should be doing. Stories have a way of reminding people about core values and inner truths that often can’t be confronted directly. Finally, a good innovation consultant also is a training and cultural maven, able to help the client think about the dichotomies of innovation and the “day job”. Why ask someone to spend time innovating when they will be evaluated on their original “day job” performance? All you do in that situation is create dissonance in the individual’s mind. While they want to innovate (who doesn’t) they are forced to spend time in the day job because that’s where their income and evaluation bread is buttered. We, as hopefully successful innovation consultants, have to help our clients think through the rationale of evaluation, recognition and compensation as tied to innovation work. Most firms prefer to reward actual, measurable results, except in many cases for the CEO, while giving lip service to the importance of innovation. Once again, we innovation consultants need to try to encourage our clients to balance requirements and expectations between commitment to innovation and individual return.

Now, back to Aunt Sally. How does one encapsulate all of that into one simple statement? I’ve not yet found the short elevator speech that can encompass all that I think we innovation consultants need to be able to do to help our clients succeed. I do like to think we offer all of those skills, but I find it hard to create a short, sweet description.

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GUEST POST from Jeffrey Phillips

Every day when I come to work I scan my Twitter stream and get insights from hundreds of people who have excellent perspectives on innovation. There are people who write about open innovation. There are people who write about business model innovation. There are people who write about new products, innovations in specific industries and topics like reverse innovation. The diversity of insights and range of topics demonstrates how valuable innovation can be. But while there is great diversity of opportunity, there also remains a great distribution of success and failure, which creates innovation risk. And while there are many types of innovation, one common factor in all innovation efforts is risk.

As I’ve written in Relentless Innovation, innovation is fraught with risk. There is risk that an innovator won’t identify important needs. Risks that innovation teams disrupt the regular operations of a business. Risks that even a promising idea isn’t accepted by the customers whose need it was meant to address. Instead of the scarlet “A” from Hawthorne’s novel, every innovator and every innovative idea wears the black “R” for risk. And in the modern business model, risk is to be avoided at all costs.

Risk introduces uncertainty, costs, variability and unpredictability. These factors run in opposition to business as usual – the work most firms have done to streamline operations, create predictable short term results, eliminate unnecessary costs and reduce or eliminate variability. Innovation introduces the snake of risk back into the garden of efficient, effective business operations. And yes, that snake whispers sweetly to some executives about the mythical risk/reward tradeoffs.

Clearly, if our highly efficient, productive business models are to become more innovative, they need to believe that innovation risk can be reduced or controlled. Either that or the operating models must become far more comfortable with risk and its costs and variances. I suspect the latter requires far more cultural change than many firms will sustain. If the tradeoff is trying to reduce innovation risk or reduce the resistance of the culture to risk, I think the former is the place to start.

How does a firm reduce or eliminate innovation risk? I think there are at least five actions that can dramatically reduce innovation risk. Note that I didn’t say eliminate risk. I doubt that is possible, but I do believe innovation risk can be dramatically reduced through the following actions:

• Align innovation to strategic goals. Far too often, innovation activities jump the tracks, pursuing interesting ideas that aren’t in line with corporate goals and strategies. This is an especially damaging result: good money and resources spent on poor outcomes. A clear strategic goal and documented scope provides a framework for innovators, increasing their chance of success.
• Executives clearly committed to innovation. Rather than propound the need for innovation, executives need to provide the best resources, provide funding and stay engaged in early innovation efforts. Otherwise innovation is viewed as the flavor of the month and slowly withers from a lack of engagement and a dearth of resources.
• People who understand what to do. Many innovation teams are simply going through the motions of innovation, pantomiming their way to an acceptable idea. They aren’t trained in innovation tools or techniques, and, more importantly, aren’t open to really big ideas. They haven’t changed their perspectives, still encumbered by the risk profiles of the business. Only when the best people are on innovation teams, have released their thinking anchors and have received training on the best innovation methods and tools can innovation succeed regularly.
• Clear insights into customer wants and needs.  Far too often innovation teams review existing market research and suggest ideas that extend existing products and services. It’s rare that an innovation team meets a real customer, much less explores new unmet or unarticulated needs. Identifying and validating new needs and creating ideas based on these needs will greatly reduce the risk of innovation.
• Doing innovation at speed. Most innovation teams struggle with the culture, which is resistant to innovation, focused on the status quo, stuck in meetings.  Most innovation teams lack sufficient resources and pull people on a part-time basis from their day jobs. Most innovation teams have to invent their innovation processes, which delays the work and forces the people around them to question they ability to innovate. The longer an innovation project drags on, the less likely it is to be successful. And the longer a project drags on, the less valuable any needs or insights that were spotted become. Innovators can reduce risk by creating educated teams following defined workflow and working quickly to ascertain needs, generate ideas and validate those ideas in the marketplace.  Instead of slow and steady, move fast and steady.

By the way, while we are on the subject, there are several ways of reducing risk that don’t work well:

• Reducing the scope of the idea. Many, many ideas start life as interesting and disruptive concepts, and over time are reduced, shrunk and rounded off to become incremental at best. Yes, this reduces the risk but also eliminates much of the differentiation and the reward
• Fast follower. Many organizations believe that they can wait for others to innovate, then quickly copy the product or service. The fast follower model works if 1) your development teams are truly fast (which most aren’t) and 2) you understand what the customer values in the product you are copying (many times firms don’t understand the customer value proposition). As product cycles shrink and customers become ever more discerning, fast followers are left with less and less margin. Again, little risk but little reward.

There are many more ways to reduce innovation risk, but we don’t have time or space for them in a blog post. This should be the first order of business for any innovator – trying to define the types and nature of risk that innovation presents, and understanding how to eliminate or reduce risk. It’s strange actually – everything about business is a risk/reward tradeoff, yet in many organizations we’ve lost the ability to balance the two, and seek only opportunities with no risk and little reward.

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GUEST POST from Jeffrey Phillips

I was thinking about writing a blog post about corporate culture and its resistance to innovation. I even had this snappy analogy ready about how corporate culture is like a wet blanket thrown on the fire of innovation. Other ideas I wanted to explore included how corporations “but” ideas to death. But it won’t work, but we don’t have the people, but it will distract from our existing products. And so forth.

However, the more I thought about writing that post – and don’t worry – few seconds were lost in that perusal – the more I was certain that everyone knows that culture and organizational perspectives are for the most part inimical to innovation. But what really stumped me, thinking just a bit more, is the dissonance between the reaction many people have about innovation in their organization, and their wondrous, blithe acceptance of innovation from other firms or individuals. It’s almost as if most of us have bifurcated minds – absolutely rejecting the possibility of innovation WITHIN our organizations while simultaneously DEMANDING innovation from other firms.

A case in point to illuminate the discussion. Many of our clients, when confronted with new ideas that may actually benefit the firm by attracting new customers, worry about their ability to produce the idea, market the idea, fund the idea. They worry about how management will perceive the idea, whether or not the organization will fund the idea. They worry about disrupting existing products or cannibalizing their own markets. Every possible exception is made to demonstrate why it will be so difficult to innovate.

Yet these same individuals whip out iPhones at the sound of the xylophone that is now the ubiquitous ring tone. They jot notes on yellow sticky pads that have become a requirement of modern business work. They search for specific terms in a web browser and search engine. They wear the latest in water-proof, wind-proof, sweat-proof, dirt resistant shells. They expect, no DEMAND, innovation in the products and services they buy, and are disappointed when the brands they know and trust fail to deliver ever more innovation.

What causes the dichotomy? Why are so many people unable to imagine their own firms creating interesting, innovative new products and services? Why are so many firms resistant to innovation, when there is clearly so much expectation and demand for new products and services? Why do the same people who “yes, but” an idea to death in their own organization immediately rush out and acquire new products and services? Clearly these innovations came from somewhere – an imaginary land of innovative firms where “everyone” is innovative.

These consumers – who are really all of us – want new products and are evidence of the opportunities that interesting new products and services create. Yet somehow when we return to our desks, doubt and uncertainty creep in. Only certain firms can innovate. There’s not really a market for this. Stick to your knitting and let others develop the new markets. We become economists, who thankfully only have two hands, who say “on the one hand, there might be a market for this idea, but on the other hand…”.

My only conclusion is that the threshold to many corporate office buildings must hold powerful magic that creates temporary amnesia and replaces demand with fear. Every person who “yes buts” an idea in a conference room while texting on an iPhone or Android should take a long look in the mirror. We have met the enemy of innovation and he is us.

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GUEST POST from Jeffrey Phillips

Why is it that something as important as innovation should be so fraught with contradictions? Today, as I was leading an innovation training class for a client, I stopped to think about the number and variety of contradictions that are embodied in successful innovation. In fact these contradictions are what make innovation so difficult.

The first contradiction is that innovation requires a business to embrace processes and methods that are far different from the efficient, effective processes that sustain short term profitability. Innovation creates new, risky, uncertain concepts that will pay off in quarters if not years. Most “business as usual” processes reject these kind of ideas as contradictory to the existing operating model. Which is like eating your seed corn. I addressed this issue in my book Relentless Innovation.

The second contradiction is that while executives want innovation, they don’t want the disruption or investment that innovation requires. This simultaneous demand for innovation results and refusal to invest in innovation efforts creates dissonance in the teams that are actively trying to do interesting innovation work, and leads to confusion and then cynicism.

The third contradiction focuses on the importance of transparency, visibility and commitment. Most innovation activities are isolated in the far reaches of a business, far from prying eyes and easily swept under the rug if the innovation doesn’t pan out. In an era of vocal leaders, we need far more emphasis on innovation, rather than the circumspect way many organizations approach innovation, out of sight and out of mind. Doing innovation work is tough, and doing it without the full support of the senior team, constantly demonstrated, means that many innovators have far fewer resources than they need.

The fourth contradiction, and perhaps the biggest barrier to innovation, is the contradiction between what we TELL people to do and what we PAY people to do. Often we express the importance of innovation and assign people to innovation teams. We ask them to do important work, creating new products or services. Yet we do nothing to change how these individuals are evaluated, compensated and rewarded. In fact most of these people are held accountable in their evaluation period to the work they did in their “day job”. Which leaves the potential innovator in an awkward position – follow his or her passion and spend time on innovation that may detract from success in the day job, or work on the day job and give short shrift to innovation.

There are more contradictions than these I’ve listed. I hope you’ll be willing to add your own in the comments section. Perhaps my other favorite is the old saw about protecting interesting ideas from others, to keep them from stealing your ideas. If an idea is truly unique and disruptive, you won’t have to worry about anyone stealing it – you’ll have to cram it down their throat to get them to pay attention. Oh, the irony of it all. Perhaps it can best be said that good innovators are people who recognize the irony in their work.

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GUEST POST from Jeffrey Phillips

As an innovation geek, I always enjoy reading over the latest reports about innovation. Like a kid at Christmas I eagerly await reports on innovation from management consulting firms like PWC or Booz Allen. They provide a yearly assessment of the world of innovation, and especially what CEOs believe to be true about innovation. And, like Christmas, many of them occur at this time of year. Recently, GE published an innovation report entitled the GE Global Innovation Barometer. It is worth taking a look at if you haven’t done so already.

One of the items that surprised and, yes, troubled me the most is to be found near the back of the overview presentation, on page 30 of 32 pages. That’s where the report analyzes how CEOs define innovation.

The report offered five definitions and asked the respondents to choose two. Here are the five definitions:

1. The implementation of new processes, products, organizational changes or marketing changes
2. An environment/culture that embraces positive change, creativity and continuous improvement
3. Research and development, new intellectual property (IP), and inventions
4. Staying ahead in the market and being a market leader
5. Solutions that benefit society and societal outcomes (including environmental outcomes)

These definitions don’t trouble me too much, although they define very different things. What troubles me is that no definition above was selected more than 35% of the time by the respondents.

I’m sure we could spend hours debating about the definition of innovation, much like ancient scholars argued about how many angels could dance on the head of a pin. Unlike the angels on a pin, however, the definition of innovation MATTERS. While it could get academic and esoteric, it needn’t be. The reason a definition of innovation is so important, if not at a global level at least at company level, is that a definition signals intention, commitment, direction and importance.

Innovation is tough enough when well defined. After all, in most cases an organization is asking its people to dream up new products or services that aren’t aligned to existing products or services at a time when there are few resources or dollars to accomplish the most rudimentary tasks. If innovation is poorly defined, innovation is like discovering a new continent without a map, without a compass, and without knowing what’s important when you discover it. Columbus went west to discover gold and spices. Imagine his disappointment to discover just a bunch of sandy islands with little demonstrable wealth. That’s what innovators who work without clear definitions face.

Returning to the definitions GE used, the first (implementation of new processes, products, organizational changes, etc) is a COMPONENT of innovation, but only if those changes add significant value, are truly new and unique and important and relevant to a customer. Implementing change is only innovation when it brings new concepts or new ideas that are valuable to a customer or stakeholder.

The second definition (environment/culture that embraces positive change, creativity and continuous improvement) is an ATTRIBUTE of innovation, not a result! Good innovators know these conditions must exist, and by the way, this definition is too limiting. It only mentions continuous improvement, not disruptive innovation.

The third definition (research and development, IP, inventions) is an INPUT to innovation, and too limiting. R&D and IP are definitely a part of innovation, but this definition doesn’t consider commercialization and market success. Creating new ideas and new IP is great, but only if there is a market that needs and wants the concepts. Moreover, this definition limits innovation to products, when innovation can clearly be applied to business models, services and customer experiences.

The fourth definition (Staying ahead in the market) is a STRATEGY, and not even a well-defined one. You could accomplish this by cutting costs, acquiring other firms.

No wonder the CEOs struggled to define innovation – because true definitions of innovation are complex. What a CEO says about innovation matters, in terms of the commitment of the rest of the organization, in terms of direction, in terms of investment, in terms of strategy. The starting point for any successful initiative or venture in any business is a clearly articulated goal, definition or strategy, which is then backed by deep commitment. If we can’t define innovation well, how can we possibly be committed to its success?

Here’s a really simple tip for any firm trying to become more innovative: create your own definition of what innovation should be for your business – and not just for an initiative, but an overarching definition for innovation. Then, ensure you have the commitment to follow through on the definition and that the people responsible for carrying out the definition understand it, and the vision, strategy and goals behind the definition. Otherwise, like a rowboat with only one oar, you’ll find your team constantly circling.

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