My colleagues and I attended an “Innovation Workshop” last week. We learnt the concept of “active deferral of judgement”, which I shall employ here with full gusto! Anyway, as we went through the entire process, I started to think of how useful a workshop like this one would actually be when I was back at work at my desk. I decided to read up on some literature and see if someone’s researched this thought. And did they?! I found quite a lot of literature, but what came closest to answering my questions was a body of impressive work done by INSEAD Professor of Entrepreneurship Morten Hansen(http://www.insead.edu/facultyresearch/faculty/profiles/mhansen/) and visiting professor Julian Birkinshaw.
Innovation isn’t all about great ideas they argue. Companies often fail because they don’t recognise that innovation is a chain that requires strength at every link to succeed. The chain starts with idea generation (generally happens at workshops such as the one I attended), but then moves to the really important issues of prioritising and funding ideas, to converting those ideas to products (dont think this is possible where I work) and finally to diffusing those products and business practices across the company.
A very interesting phenomenon that Hansen saw was that managers who are constantly working to come up with new ideas when there are other problems in the chain actually may be causing more problems. Like I say to some colleagues, innovating to kill the business! “What you’re essentially doing is pumping more ideas into a broken process and that makes it even worse.” He cites one company that was intent on becoming more innovative (doesn’t every one of them?). “They had a great pool of ideas but management started having more brainstorming sessions … believing that they just needed more ideas,“ he says. “Ideas did not get selected or funded and nor did they die. Nothing happened to them at all. They were just floating around and, as a consequence, the company did not develop new products.”
This can become an even bigger corporate problem because creative employees quickly become disillusioned when none of the ideas that emerge during brainstorming sessions ever sees the light of day. Those employees eventually leave to find a more innovative place to work. So, the authors argue, companies need to develop a process, a chain, to get those good ideas to market.
Many managers look for a one-size-fits-all innovation management solution. They always want to import something from a successful company. “One size does not fit all,” Hansen says. Managers must first understand their unique problem, then they can go out and look for a solution that fits their needs. “That’s a very big difference. It’s a very big change in the way that you think about improving innovation in a company.”
Put simply, companies are idea poor, conversion poor or diffusion poor. Idea poor may be obvious. Conversion poor means companies are unable to pinpoint the best idea, fund it and bring it to market. Diffusion poor means a company may have a good idea, but cannot generate company-wide support and cannot develop the idea into new products or new markets.
Hansen says Proctor & Gamble and Apple are good examples of companies that have shown real success across the innovation value chain. If you look at Apple, they’re very good at generating good ideas. They’re very good at bringing those ideas to market and they are also very good at monetising them. They are able to further expand the product offering, with different extensions and different versions. Note Apple’s iPod and iPhone products. It’s not just about trendy products. Apple knows how to take those good ideas and, using the innovation value chain, turn them into successful products.
Hansen and Birkinshaw’s prescription works for all types of innovation. Innovation can be defined broadly, to include products and services, new business models and best practices. IMHO, how you do things in a company, as a process on a day to day basis – that’s the best innovation. Innovation, or at least thinking innovatively, must be practised every day and not just at workshops. This process must be applied to every single thing that is considered “routine”. Only then would companies not only move (even a little) towards really innovating but would also work hard to retain the best and the most creative of their people!