If you follow any business or technology channels these days, the topic of innovation seems to be gaining in popularity. Now, everyone likes to believe that they’re innovative. Like being funny, charming or cool, most of us like to believe we are pretty innovative. Coming up with new ideas is usually thought of as a good thing in business and successful companies necessarily meet this creativity requirement. But, lately I have seen a significant uptick in the amount of discussion about innovation. And it’s not just discussion. Concern is a better description, if not full-blown panic.
There seems to be a growing sense of urgency behind the need to innovate, particularly in established businesses. In my own work with clients the topic of innovation is rapidly climbing to the top of their agenda, as customer expectations and options grow exponentially.
What Happened to Innovation?
Innovation is core to our humanity. It is how we survived and then thrived in a world full of dangers and opportunities. We all seem to have at least some appetite for new thingamabobs and whatsits, even those who complain about modern living and wish nostalgically for simpler times.
From their smartphone.
Most of us like innovation and reward innovators with our attention and our dollars.
Despite these positive feedback mechanisms for being innovative, it seems many organizations have lost their ability to do so. Decades of cost cutting, process optimizing, Six-Sigma-ing, Just-In-Timing, risk-mitigating and ROI-meeting, thought processes seem to have driven innovation out of our companies faster than a tiger chased from a jungle by an empowered, high-performance tiger team. Despite all of our efforts to constantly improve our business operations, there seems to be a growing sense that modern businesses have lost their ability to actually innovate, much to their detriment.
The ROI Rut
It shouldn’t be surprising that innovation has lost out to improvement. We need only look at the fields and calculations in the Return On Investment (ROI) models we create in Excel. Inevitably, before most organizations invest in changes they want to ensure that their investment bears positive returns. To do this, we must estimate both the cost of developing an innovation and the potential value of the innovation. But, if we are truly innovating, rather than merely improving, we should not be able to calculate either variable with any real accuracy. To explore something new means not being able to forecast either the costs or the benefits, because they are unknown, but our processes dictate that such measurements be made, whether they are rational or not.
This leads to organizations seeking improvements to their products or services, rather than actual innovation. Saying that you’re going to make something X percent better for Y percent investment feels achievable, and less risky. So, many attempts at innovation fall far short of break-through performance. They have to, because our spreadsheets say so. In my experience, the best way to kill off innovation is to ask for, and expect accuracy from, ROI analyses before the fact.
The Last Fruit on the Tree
This doesn’t mean we don’t still try to innovate. Indeed, it seems that we are working harder than ever to improve our business performance. But, many of the executives I work with find that results come harder, the rewards seem smaller, and the challenges grow steeper as they struggle to improve. Doing the same old thing, merely faster, cheaper or better, no longer nets the same gains as it used to which should be worrying to organizations who have focused their efforts on incremental improvement for years or even decades.
At some point along the way, it seems that many businesses became confused by the differences between innovation and improvement, so that the latter eventually dominated the former. This shouldn’t come as a surprise, as quality guru Edward Deming foretold of this phenomenon over a half-century ago. Deming, the father of the Kaizen method of constant process improvement also spoke of the need for periodic, destructive change. Deming reasoned that when you do something new there are many possible avenues for improvement. Through Kaizen, you first fix the easy, cheap, simple and obvious challenges in a process; the so-called low hanging fruit. Improvements come easily when you first implement something new.
After a while, this low-hanging fruit of improvement is picked clean, and you need to move on to harder, more complicated issues to earn further gains. Mid-hanging fruit still yields results, but they come more dearly in time and treasure. Eventually, any further gains become increasingly difficult to obtain, until eventually your tree is stripped bare of fruit. At this point, improvements come at great cost, and give little gain.
Many of the companies I work with find themselves in this situation. After years of optimizing, off-shoring, out-sourcing, right-sizing, Kanban-ing and so on, they find that it is increasingly difficult to squeeze further improvements from their operations. The same old, same old no longer works, while the expectation of improvement remains relentless. At this point, they have been so dedicated to the idea of improvement, that they have forgotten how to innovate.
What are business leaders to do when they find that their organizations have lost the spark of innovation? I would suggest that effective innovation is less about thinking and brainstorming and more about doing and learning. To be effective, innovation must be active rather than passive, and breakthroughs are a result, not a beginning.
The Power of Words
So how do we relearn the process of innovation? Is innovation about the creative idea that changes the world, or is it the process that leads us to a new outcome? Is innovation better used as a verb (to innovate) or as a noun (the innovation itself)? Words are an interesting thing. The words that we use reveal our thinking, often more than we might intend.
A quick search on Google provided the following definitions:
Innovation (noun): a new method, idea, product, etc.
Innovate (verb): to make changes in something established, especially by introducing new methods, ideas or products
The definition of innovation suggests that what is required is a result that is new. This is true of the verb innovate, too. The emphasis of innovation is generating an outcome that is new.
As someone who has spent a quarter-century in the world of information technology, and have worked on more than my fair share of high performance, multi-disciplinary tiger teams, I have also experienced what many people mistake for innovation. In many of these instances, the word that would have been more appropriate was:
Daydream (noun): a series of pleasant thoughts that distract one’s attention from the present.
Daydream (verb): to indulge in daydreams.
Often, the exercises in trying to be innovative amounted to daydreaming. We were tasked to think of new, out of the box ideas for dealing with an issue, but in the end those ideas were as far as we got. We would document those great ideas for posterity, and then return to the same old grind. Because those ideas weren’t acted upon, weren’t explored, weren’t realized, they amounted to little more than daydreaming.
Living the Dream
Again, the words we use reflect our intentions. When we dream of a possible future, but do not act on those dreams, are we innovating, or merely daydreaming? Does innovation lie in the “Great Idea,” or is it only in the realization of that great idea? Many people seem to feel the idea makes the innovation. I’d strongly disagree with this. In an age where three or four billion of us have access to nearly infinite amounts of information, there are few truly unique ideas left out there, and I’m always skeptical when someone tells me they’ve come up with something that “no one else has ever thought of.”
Instead, it’s the act of bringing an idea to reality that is true innovation. It is seeing it through (uncertainty, challenges and unknowns aside) that defines innovation. It is the discovery of what you didn’t know, rather than simply knowing something better, that leads to breakthrough results. And this is why our long-standing love affair with Kaizen and incremental improvements has dulled our ability to truly innovate.
To help with your own attempts at innovation, I’d offer a few simple principles that might help
- Creativity is good, but emphasize action. Innovation doesn’t end with brainstorming, that’s where it begins.
- Your first and last impressions are probably your best, but the middle matters. Brainstorming what-ifs is the starting point, and a new solution is the end, but, don’t discount the value of the process in between. Vetting out ideas, failing in small ways as you explore, and adjusting your goals based upon incremental learning is critical to getting from A to Z.
- There’s a huge difference between criticisms and counter-arguments. While in an innovation process, be wary of those who criticize but embrace those who make counter-arguments. Criticism attacks the idea itself, and those who came up with it. Counter-arguments instead question the beliefs, assumptions or estimates that have been made along the way. One of my most useful and productive professional relationships is with a colleague who, while never criticizing an idea, manages to produce a flurry of great counter-arguments to each new idea or innovation presented to him. He is masterful at seeing the other sides of whatever his colleagues have come up with, and does so in a way that leads to better answers at the end. He never criticizes the idea, but he certainly makes sure that the thinking around it is sound and fully-vetted.
Start small, but shoot big. Adjust your goals according to the risk appetite that has grown within your organization. Companies that are highly risk-adverse have typically created very large barriers to making investments. Because of this, only large investments, with certain returns, generally get funded. Such projects are, almost necessarily, improvements, rather than innovations.
To get real innovation, come up with your “Big Idea,” but immediately look for small, inexpensive, non-threatening steps that demonstrate that the innovation is both possible and profitable. Breaking an unknown destination into a range of smaller, easier to evaluate steps reduces the perceived risk, allows the business case to build upon itself, and allows finer control of the decision-making process. Giant leaps are great for the big screen of the movie theater, but far more innovations see the light of day when they consist of hundreds of baby-steps, taken rapidly, cheaply and thoughtfully along an as-yet-untrodden path.
Innovation Means Insight Plus Action
To recharge your organization’s ability to innovate you must break through the trap of incremental improvement. It’s also imperative that you move beyond mere brainstorming, and actually bring your innovative ideas to life. Innovation should be defined as doing something new and different, rather than thinking about it. Without action, without actually seeing a new idea put to work, your organization may be daydreaming; wishing things could be different without realizing any benefit.