Category Archives: Strategy

Veracity Required for Innovation Success

3 Replies

Veracity Required for Innovation SuccessA recent post by Jeffrey Phillips titled Velocity is the Only Innovation Outcome That Matters sparked respectful disagreement inside me.

I believe that when it comes to innovation, veracity is more important than velocity. Let’s look at the definition of the word veracity from our friends over at Merriam-Webster:

Veracity

1: devotion to the truth : truthfulness
2: power of conveying or perceiving truth

In my opinion it is more valuable to spend time on identifying the right customer insight and the right way to communicate with customers about the solution which you create to serve the insight, than it is to spend the same amount of time inventing faster or launching faster.

In fact your innovation velocity can exceed your innovation veracity as shown in this article.

And many a company has fallen foul of going too fast and thinking an invention will become an innovation when they are ready to launch it, including Microsoft with the Windows Tablet and Apple with the Newton, only to find that customers were not ready to adopt it as an innovation until years later.

Velocity is definitely important, but more isn’t necessarily better. Many times the competitor with a lesser innovation velocity but greater innovation veracity has ended up winning. Look at Apple and the iPod, the iPhone, the iPad, etc.

It’s also more important to look for the barriers to adoption than it is to look for the barriers to creation. Innovation is all about value and this is why it is so important to pay just as much attention to value access and value translation, as you do to value creation, because it takes doing all three really well with a solution with real innovation veracity to find innovation success.

Fail to identify a solution with real innovation veracity and you are likely to miss potential elements of optimal value creation, you will likely struggle to make its value accessible, and there is a greater likelihood that you will fail to properly translate the value of the solution for your customers.

So, taken another way, the search for innovation success is a search for truth. You must therefore unlock the inner truths of your intended customers (think unmet needs or jobs-to-be-done), you must search in areas that your intended customers will feel are true for your brand, and areas that feel true to employees given the company’s mission and values. When your pursuit of innovation centers around truth and when you commit to a focused effort to increase your innovation capability – and to pursue Innovation Excellence – then and only then do you have your best chance at innovation success.

What innovation truths are you searching for?

How much innovation veracity can you create?


Build a Common Language of Innovation

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

New White Paper on External Talent Strategies

Leave a reply

Innocentive - New White Paper on External Talent StrategiesFollowing on the heels of a recent thought leadership webinar (link to recording) on the same topic, this white paper explores the intersection of talent management and open innovation strategies. The paper dives into why having an external talent strategy is becoming increasingly important and how it can help your company accelerate innovation, shows how leading organizations manage their open innovation and crowdsourcing efforts (including case study examples of companies like P&G), and provides proven strategies and steps to take for attracting talent to your organization’s innovation efforts.

Download this Complimentary White Paper

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Making Innovation Sustainable – Part 1 of 4

Leave a reply

Making Innovation Sustainable - Part 1 of 4Key Dangers:

  • Viewing innovation as a temporary, extraordinary effort in response to a crisis, or pursuing innovation as a competitive response.

  • Treating innovation as the domain of only the R & D or Marketing department, or some other subgroup.

  • Treating innovation as a project-based activity, instead of as an integral organizational capability to be invested in and professionally managed.

Success can be blinding. Organizations often drive themselves by trying to look through the windscreen and in the rearview mirror, only to get blindsided by something from the left or the right. Put another way, organizations often focus on what they’ve already done and moving it forward (often in an incremental way). Organizations also invest in defending and extending the core products and services that made them successful — focusing a huge amount of energy on protecting their flank. Don’t get me wrong, incremental innovation is important, but all of your competitors are trying to make their products and services incrementally better than yours at the same time. At best, your efforts will allow you to maintain or make slight improvements in revenue and profitability.

Success can be blinding. Organizations often drive themselves by trying to look through the windscreen and in the rearview mirror, only to get blindsided by something from the left or the right. Put another way, organizations often focus on what they’ve already done and moving it forward (often in an incremental way). Organizations also invest in defending and extending the core products and services that made them successful — focusing a huge amount of energy on protecting their flank. Don’t get me wrong, incremental innovation is important, but all of your competitors are trying to make their products and services incrementally better than yours at the same time. At best, your efforts will allow you to maintain or make slight improvements in revenue and profitability.

And of course, companies that fail to invest in at least incremental innovation efforts often find themselves getting less and less competitive in the marketplace. Ultimately, the organizations that create sustainable success are those that invest in not only identifying and implementing the change that their customers desire and require, but also the change that is necessary inside the organization to deliver it.

Who Innovates?

Do you have a group of innovation elites in your organization? Maybe these are folks in Marketing or in Research & Development. Or do you make a concerted effort for all of your employees to feel that it is part of their job to innovate? If people feel that innovation is someone else ’ s job, then they ’ re not going to participate, and you are going to miss out on a whole spectrum of interesting innovation ideas. The fact is that markets are too big, too complex, and opportunities for insight lie in too many different reference industries and geographies for any small number of people to be able to successfully sense and ideate. I heard Dr. Alph Bingham, founder of Innocentive, recently talking about who actually solves most of their challenges, and he said that if you were to classify people across a spectrum of those who you believed would be most likely to solve the challenges on the left and those you believed would be least likely to solve the challenges on the right, most of the solutions come from the right-hand side. So if the best solutions are most likely to come from those you would deem least likely, wouldn’t it make sense to include everyone in your organization in your innovation efforts? And possibly people outside your organization?

Innovating in a Crisis

Companies that only have the courage to innovate when there is a crisis, or a competitive response is needed, will be unable to achieve sustainable innovation. Not only that, but their innovation attempts are likely to lack the vision necessary to leap ahead of the crisis or competition — instead they will merely meet the threat and keep the organization as a reactionary pursuer of innovation instead of becoming a leader. This is the GM approach to innovation — constantly trying to catch up to where Toyota was five years ago — instead of trying to jump the next curve and regaining a leadership position. Innovating in crisis often means that the main motivator is going to be fear. Fear does not serve as an effective motivator for innovation. We know because of the inverse correlation between the fear of failure and the quantity and quality of innovation in organizations. Organizations looking to innovate in a crisis cannot do so over and over, and so they must find a way to transform feelings of fear into a believable, committed challenge mentality. To make an analogy: When the Russians launch Sputnik, you have to commit to an innovation moonshot.

Innovation Is Not a Project

Often when companies attempt to innovate because of a crisis or in response to the competition, they pursue innovation as a project. When you pursue innovation as a project, the organization does not build any kind of innovation capability. Instead a group of people come together to tackle a particular challenge, and when the work is complete everyone goes back to their day jobs. None of the learnings are retained in a meaningful and easy-to-access manner for future projects, and there is no opportunity for policies and processes to be refined for greater efficiency next time. You may be pursuing a portfolio of innovation projects, but innovation itself is not a project. Projects start and stop, but for innovation to be sustainable, it must be continuous. This often means investing in a small core team of people (maybe only allocating part of their time) to serve as innovation shepherds — identifying and cataloging innovation best practices and building the innovation capabilities of the organization so that all innovation projects in the portfolio
may benefit.

Excerpted from Stoking Your Innovation Bonfire. You can read ahead by getting the book or downloading the sample chapter, or by checking out parts 2-4 here:

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Harnessing the Global Talent Pool to Accelerate Innovation

1 Reply

In this webinar hosted by Innocentive I explore how organizations can utilize open innovation and crowdsourcing resources as an essential talent management strategy to drive their business.

You can engage me to create a webinar or white paper for your audience here.

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Embedding Innovation

Leave a reply

Distributing Innovation Knowledge for Innovation Success

Embedding InnovationIs innovation in your organization a project?

Or are you trying to embed innovation into your organization as a new core competency?

Is innovation part of the new business as usual you are trying to create for sustained growth?

If so, you must take real actions to not only create a culture of continuous innovation but to sustain it.

You must consciously and continuously manage two of the key tensions that often inhibit innovation:

  1. Exploitation versus Exploration – Maximizing existing revenue possibilities while also creating new revenue opportunities
  2. Executive Mindset versus Entrepreneurial Mindset – Unleashing your executives to create predictability and repeatability in the existing business while also unleashing intrapreneurs to create new businesses

To be successful in the long run, you must pursue operational excellence AND innovation excellence at the same time.

And you must provide your entire workforce with the tools and training to support continuous, sustainable innovation.

Ideally this would include:

  1. Creating a common language of innovation in your organization

  2. Communicating an innovation vision, strategy, and goals across the organization

  3. Creating instructor-led and/or e-learning with Human-Centered Change & Innovation founder Braden Kelley to set a baseline understanding in your organization of your innovation process and the innovation tools available to help stimulate increased innovation in your organization

  4. Give your employees a steady diet of innovation inspiration and education by embedding an RSS Feed (or feedburner) from Human-Centered Change & Innovation into your corporate portal or into your Idea Management System

  5. Get involved with the Human-Centered Change & Innovation blog to showcase the fantastic innovation work you are doing and to be one of the first organizations to get an inside look at what others are doing

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

No Time to Innovate

Leave a reply

Take an Innovation Vacation

Innovation VacationA popular set of questions that I get asked repeatedly by clients and audience members includes the following:

We know we need to innovate, but who has time?

How do companies balance the day to day operations with the need to innovate?

Without a budget to allocate people to innovation, how can I make innovation part of people’s day jobs?

We all know that when it comes to business, and life in general, that there are two major constraints we all face – and often trade off one against the other – those two constraints are time and money.

Every organization may understand the need for innovation, but it is difficult to execute in a repeatable way because so many of our organizations are set up to maximize the extraction of value from today’s operations and do a poor job of balancing this admirable and necessary goal with the need to develop tomorrow’s revenue and profit-generating operations.

Some organizations set up research and development departments, new product development departments, corporate venturing arms, incubators, or skunkworks to try and address the needs for future revenue and profit streams, but this limits the number of people that can potentially contribute to the potential innovation process and success of the organization – and isolates the efforts from other valuable perspectives and inputs.

Other organizations like Google and 3M also have some of these structures, but in addition try and say to employees that they can spend up to a certain percentage of their time on innovation projects (or whatever work-related pursuit they might want). In 3M’s case the figure is 15% and in Google’s case it is 20%.

There is only one problem with percent time.

The day-to-day deadline pressures and fire drills never disappear in any organization (even an innovative one), and so often the joke goes – sure Google employees get 20% time, but only if it’s on Saturday or Sunday.

So what’s the solution?

Well, after talking with the folks at Intuit as part of the research for my next book project, I’ve come to discover that they approach the time for innovation problem slightly differently.

Instead of just allowing people to spend up to a blanket 10% of their time on innovation projects, instead they allow employees to accumulate that time and then schedule time off to pursue a specific innovation project, often doing so at the same time with 3-4 other employees so they can collaborate on the project idea and push it forward.

I like to call it taking an innovation vacation.

I think this is the best approach I’ve heard so far to balancing the needs of the day to day business and its need for predictable resourcing, with the desire to invest in innovation to sustain the business into the future.

Allowing employees to schedule a collaborative innovation vacation achieves SEVERAL key business goals:

  1. Predictability – It allows managers to do capacity planning and schedule around the employee’s absence

  2. Retention – Allowing employees to take a week or two here or there to pursue an innovation project they are interested in, is likely to lead to higher job satisfaction and retention

  3. Collaboration – If you encourage people to take their time off as cross-functional groups, we know that not only do diverse teams solve problems better, but we also know from EMC’s data on innovation submissions and finalists that projects pursued as teams instead of by individuals are 33% more likely to make the final cut

  4. Increased Organizational Performance – Organizations that have deeper networks and stronger cross-functional knowledge (more T people) are more likely to work together more efficiently, have fewer blind spots, have higher employee engagement, and just have more fun

Time out for a sanity check. 10% time equates to about five weeks a year, and 20% time would equate to about ten weeks a year. So, if you choose to pursue an innovation investment strategy like innovation vacations, you must plan accordingly in terms of staffing (factoring in of course that most employees won’t make full use of it), but I believe it can be done and should be done – for the long-term health of the business.

We try and convince people to allocate 10-15% of their income towards retirement so that they have money to provide for themselves when they grow old and retire, why shouldn’t an organization allocate a similar percentage?

What do you think, could you establish something like this in your organization?

What would you do with an innovation vacation?

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Innovator Lifetime Value

2 Replies

Innovator Lifetime ValueBy now, if you’re in marketing you’re probably familiar with the concept of customer lifetime value. Put simply, it’s the idea that a customer is worth to the organization not just the value of a single transaction, but the collection of all of the transactions that they might make during their relationship with you. And when speaking of customer lifetime value, we generally don’t talk about any single customer, but speak about their value in aggregate, averaging out the high value (many, many purchases) and low value customers (one or a few purchases).

The concept is usually linked to discussions of how much you can afford to spend to acquire a customer and whether a particular advertising or marketing effort is worth undertaking.The concept has been even applied to non-profits (lifetime donor value) and even to social media ROI.

But what’s a good outside innovation partner worth?

As I was speaking with several of the innovation leaders at Intuit on their campus in Mountain View last year, it came to me that organizations should be seeking to build and strengthen relationships with their customers, suppliers, and other potential innovation partners in ways similar to their approach to traditional relationship marketing.

Having helped several clients with their relationship marketing strategies, it seems to me that there is no reason why the same principles can’t or shouldn’t be applied to your potential innovation partner community.

After all, as more and more companies begin to understand and engage in the practice of open innovation, then there will be an advantage accumulated by the organizations that do a good job of building strong and profitable relationships with the most passionate and prolific suppliers, customers, academics, etc. over those organizations that don’t.

What organization out there wouldn’t want to accumulate an innovation advantage, a growth advantage, a relationship advantage over their competitors?

But the real questions are of course:

  1. Do you have the required internal innovation capability built already to support open innovation?
  2. Are you engaging in open innovation already? Or are your competitors?
  3. What are you doing to build strong relationships with you potential innovation partners?
  4. Are you tasking skilled relationship marketers with creating and maintaining these conversations and building these relationships?

So, do you? Are you?

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

An Innovation Eclipse

Leave a reply

An Innovation EclipseThe failure of Solyndra – a United States solar energy venture backed by $535 million in federal loan guarantees drew the ire of many people concerned with the state of the federal budget deficit and the growing national debt. But was the federal government wrong to offer loan guarantees to Solyndra?

This is the question many people asked back when the failure happened, and I would be interested to hear what you think.

In a previous article I stated some of my thoughts on the role the federal government should play in the overall innovation ecosystem in the United States, and I stand by what I said in that article – An Open Letter on Innovation to President Obama.

To quote the relevant part for the discussion:

We need to take a step back and define what the role of government is in our overall innovation efforts as a country:

  1. What are the big research challenges that companies are unwilling to spend on that if pursued and conquered, would unleash a wave of innovation?

  2. How can companies and the government work together to fund and share technology that doesn’t define competition, but does accelerate productivity and global competitiveness of U.S. firms against foreign competitors?

  3. How can we restructure our tax system to reward successful American firms for taking the bigger risks that will help them continue to lead their industries in the future?

  4. How can we incent American exporters trailing foreign competitors to try and leapfrog and disrupt foreign competitors, take market share, and create jobs in this country?

  5. Should we build a deep innovation coaching capability into the Small Business Administration so that small companies can get access to innovation education?

  6. If the last wave of innovation in this country was built on the passion and ideas of foreign born entrepreneurs, should we not be doing more (not less) to encourage the world’s best to come here and study and start businesses?

  7. If we are in a war for innovation, should we not be building innovation alliances with countries in the same way we have built military alliances for centuries? More and more companies are doing this, why not countries?

You’ll notice that nowhere on this list was funding companies. This is a special skill and one that most people wouldn’t think about the government as having, especially when you take into account that identifying a potentially successful startup is not about the idea, but about identifying strong management teams that have the capability to lead a team of people to find and overcome the critical flaws in the founding idea and get the final solution to market. Funding companies isn’t something that the government should be focusing on – even when they pursue it in a portfolio approach (Solyndra represents only 2% of the Department of Energy’s committed loan guarantees).

From an outsider’s perspective the $535 million would have been better spent in discovering and transferring a platform technology to multiple companies that could then work towards getting the basic platform technology to market (funded by the private sector). Then other American entrepreneurs could have generated even more jobs by building upon it. Think about the growth in the US Economy that the platform technology of the Internet generated. It is too soon to see whether the failure of Solyndra will be a big blow or a small blow to the Obama administration’s innovation efforts, but it probably also didn’t help that last week Alan Greenspan was quoted as saying:

“Can innovation create jobs? The answer is that is not its focus,”

“Jobs are created in that process and what happens in private industry as technology decreases unit costs and especially labor costs, profits go up, companies expand and then they hire people,”

“Innovation reduces jobs, and there is no way getting around that syllogism,”

Alan Greenspan may be simplifying things here and ignoring that there are more types of innovation than cost innovation, but hey, let’s give the guy a break as innovation is not really his focus.

Also this week it emerged that Thomas Friedman has a new book coming out with Michael Mandelbaum called That Used to be Us that essentially says the United States must innovate or else. After all, we’re never going to be cheaper, so we have to better and more innovative. That leaves a huge challenge for the government of the United States.

To replace all of the debt-fueled, consumption-related jobs that will likely never come back, the United States must come together as a collection of public, private, and charitable institutions to re-train our workforce and change our mindset as a country to focus not on consumption but creation in order to generate the new jobs necessary to reduce a 9.2% unemployment rate.

But for all of the focus in the media and academia on improving the quality of Science, Technology, Engineering, and Math (STEM) education in America, we must also introduce an equally strong focus on creating young people that are equally capable of becoming the flexible and adaptable workforce that organizations will need to continue to succeed at innovation. This includes helping reinforce the value of unplugging in our always-on society that suffers from expectations of immediate response.

All of this taken together still shows that the United States still needs a cohesive, long-term, committed innovation strategy if we are to prevent the country’s continued loss of ground to other rising economies over time. Because any innovation strategy requires long-term focus and commitment, I remain doubtful that the United States politicians will be up to the task, and very doubtful that in an era of collapsing education budgets that we will be able to train our children to be more flexible and adaptable with the requisite skills in language to translate the value of their ideas, the technical skills to create the value, and the logic to create the systems necessary to make it easier to access the value of their ideas. But we will see.

It is my belief as I have said before in my article Stop Praying for Education Reform that we must come together outside the normal school day to educate our children in the skills necessary to create the innovation capacity they will need to take our country forward through the rest of this century, and help to maintain its place near the top of the economic pyramid.

Ultimately the question is not whether the United States CAN still lead the world in innovation, but whether we have the WILL.

What do you think?

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Innovation is All About Value

30 Replies

Innovation is All About ValueI’ve been talking for a while now as an innovation speaker how crucial value is to innovation. It is no consequence as a result that value sits at the center of my definition of innovation:

Innovation transforms the useful seeds of invention into solutions valued above every existing alternative – and widely adopted.

In this definition you will also see that I draw a distinction between useful and valuable, and I develop it further in my book Stoking Your Innovation Bonfire – the following is an excerpt on the topic from the book:

“Often usefulness comes from what a product or service does for you, and value comes from how it does it. If you’re looking to truly deliver innovative products and services into the marketplace, then once you succeed at the designing and developing the ‘what’, don’t forget to also focus on achieving excellence in the ‘how’.”

One of my favorite example of the useful versus valuable distinction is the mousetrap. Despite the hundreds or thousands of patent applications submitted every year for new mousetrap designs, most people still purchase the same simple snapping mousetrap that you see in cartoons and that has been around for a hundred years. The mousetrap is a great example of how easy it is to generate innovation investment opportunities and how difficult it is to create something that is truly valuable.

This distinction between useful and valuable is one that you must seek to understand and by turning this into a lens through which you can look at the potential of your innovation investment opportunities, the higher the return you will have from your innovation portfolio.

Speaking of which, maybe we should stop talking about idea generation, idea management and idea evaluation and instead begin thinking about ideas as innovation investment opportunities. Just changing the language we use in talking about innovation can change the way we think about things and the outcomes that we are able to generate. The images we choose and the language we use is incredibly important and we’ll discuss this in more detail here in a moment. But first I would like to share my innovation equation to counter the popular (innovation = idea + execution) equation. I like to say that:

Innovation = Value Creation (x) Value Access (x) Value Translation

Now you will notice that the components are multiplicative not additive. Do one or two well and one poorly and it doesn’t necessarily add up to a positive result. Doing one poorly and two well can still doom your innovation investment to failure. Let’s look at the three equation components in brief:

Value Creation is pretty self-explanatory. Your innovation investment must create incremental or completely new value large enough to overcome the switching costs of moving to your new solution from the old solution (including the ‘Do Nothing Solution’). New value can be created by making something more efficient, more effective, possible that wasn’t possible before, or create new psychological or emotional benefits.

Value Access could also be thought of as friction reduction. How easy do you make it for customers and consumers to access the value you’ve created. How well has the product or service been designed to allow people to access the value easily? How easy is it for the solution to be created? How easy is it for people to do business with you?

Value Translation is all about helping people understand the value you’ve created and how it fits into their lives. Value translation is also about understanding where on a continuum between the need for explanation and education that your solution falls. Incremental innovations can usually just be explained to people because they anchor to something they already understand, but radical or disruptive innovations inevitably require some level of education (often far in advance of the launch).

Done really well, value translation also helps to communicate how easy it will be for customers and consumers to exchange their old solution for the new solution. My favorite example of poor value translation and brilliant value translation come from the same company and the same product launch – The Apple iPad. It’s hard to believe, but Apple actually announced the iPad with the following statement:

“Our most advanced technology in a magical and revolutionary device at an unbelievable price.”

This set off a firestorm of criticism and put the launch at risk of failure. But amazingly Apple managed to come up with the Out of Home (OOH) advertisements with a person with their feet up on a couch and the iPad on their lap (see above) by the time the product shipping. If a picture is worth a thousand words, this particular picture will probably end up being worth billions of dollars to Apple.

Never Forget!

Value creation is important, but you can’t succeed without equal attention being paid to both value access and value translation…

Because innovation is all about value…

Value Creation (x) Value Access (x) Value Translation = Success!

Click here to see the ‘Innovation is All About Value’ video

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Building a Global Sensing Network

10 Replies

Building a Global Sensing NetworkIf the innovation war is just beginning, then you need to make sure you’re fighting it outside your organization — not inside.

The old way of succeeding in business was to hire the most clever, educated, experienced and motivated people you could afford and then direct them to come up with the best customer solutions possible, organize and execute their production and marketing predictably and efficiently, and do their best to outmaneuver the competition.

But the battlefield of business success is changing. Future business success will be built upon the ability to:

  1. Utilize expert communities.

  2. Identify and gather technology trend information, customer insights and local social mutations from around the globe.

  3. Mobilize the organization in organic ways to utilize resources and information often beyond its control.

  4. Still organize and execute production and marketing predictably and efficiently in the middle of all this complexity.

At the same time, market leaders will be increasingly determined not by their ability to outmaneuver the competition in a known market, but by their ability to identify and solve for the key unknowns in markets that will continue to become more global and less defined. Future market leaders will be those organizations that build superior global sensing networks and do a better job at making sense of the inputs from these networks to select the optimal actionable insights to drive innovation.

By this point, hopefully you are asking yourself two questions:

Continue reading this article on the American Express OPEN Forum.

Download the white paper – ‘Harnessing the Global Talent Pool to Accelerate Innovation’


Build a Common Language of Innovation on your team

Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.