11 ways to successful innovation

As an interim summary of the last term in the E-Business and Innovation programme, I compiled what I consider some of the important factors for taking innovation beyond the buzzword. The keywords after each section are meant as starting point for further research.

1. Know the difference between invention and innovation.

Before thinking about successful innovation, it is important to understand what innovation is, and what it’s not. Innovation is an evolutionary process, not a product of Gyro Gearloose’s workshop. Innovation combines a new idea with the question of what is feasible. An innovation should always be linked to a tangible market opportunity. Some innovations fail because they are ahead of their time; others fail because they never got beyond the stage of invention. Don’t be fooled by the hordes of companies who put innovation in their mission statement without having a clue of the underlying principles and theoretical concepts. Like every other business process, innovation has its own set of rules and factors that decide over success or failure.

Keywords: invention, innovation, invention vs. innovation

2. Listen to your Pain

Many companies are obsessed with market research to find the next big thing. But oftentimes opportunities for innovation are closer than you think. Look at the current processes or ask employees and there will be some degree of pain, something that could be incrementally or radically improved. The obvious step here is solving that pain to improve the current processes and improve efficiency. But do not stop there. If you feel this pain, there will be others that feel it too. Try to view the solution isolated from its current usage and think about the value it provides. The stronger the pain it solves, the more likely it is that other people are willing to pay a premium to get rid of the same pain.

Keywords: user innovation

3. Know your Assets

For companies that produce tangible products from materials and machinery it is relatively easy to see available assets. For knowledge-intensive firms (KIFs), individual assets are harder to grasp as the supply-chains in consultancies or agencies are less visible and transparent. Nevertheless, getting an overview of the individual parts that are used every day can be a great source of innovation. A piece of code whose functionality could form a new application by itself, a methodology that can be applied to a different sector, a business model that can be utilised for a different type of product. Viewing assets out of context and thinking about (unconventional) re-usage opens new, innovative perspectives.

Keywords: small pieces loosely joined, code repository, asset management

4. Orchestrate the Pieces

This is partly related to the previous point, but with a more global perspective. Today’s opportunities, especially in the software sector, are not restricted to what happens inside of a company. A major part of innovation is about combination, not creation. When thinking about innovative links, always consider both internal assets and externally available pieces. Open-source software, open APIs, existing data and secondary research play a crucial role in innovation. Don’t reinvent the wheel. If something already exists, use it and focus on creating new value with it. If another organisation has its core competencies in something that you require, ally with them instead of wasting resources on duplicating.

Keywords: API, orchestration, open-source, core competencies

5. Use Lasers, not Shotguns

When pursuing innovation, especially in products, it is easy to get carried away by possibilities and features that could extend the core idea. In reality, thinking too broad oftentimes dilutes the innovation and eventually renders it impractical for both the innovator and the target audience. Restrict yourself to a small, focused idea instead of feature overload. You probably won’t create the next iTunes, YouTube or Twitter. You don’t need to, either. Instead of fighting these platforms, make use of them. The scale, tools and ecosystems around these established platforms should be considered opportunities, not threats. Want to create a service for classifieds? Build it on top of Twitter instead of competing with Craigslist on your own, proprietary platform. Focus on your niche within the market and make smart use of dominant designs.

Keywords: dominant design, KISS principle

6. Think Intrapreneurship, not Entrepreneurship

When describing entrepreneurs, media coverage regularly restricts itself to drawing an image of the young, lone, visionary thinker who changes the world over night. Not only is this image plain wrong, it also creates unnecessary confusion in corporate innovation. For many employers innovation simply means “I will lose employees and intellectual property”. Yet the concept of innovation is not restricted to tiny garage startups. An established organisation has its unique set of advantages to facilitate innovation. Resources, core competencies and established networks are only three examples. Instead of keeping employees away from innovation in order to retain them in-house, embrace innovation as continuous process to stay competitive.

Keywords: corporate entrepreneurship, change management, virgin’s corporate culture (Richard Branson)

7. Prepare to Have Your Ideas Changed

Note that the headline does not say “prepare to change your ideas”. When coming up with innovative ideas, it is most normal to react nervous when the innovation is not being used as intended. Resist the urge to educate people about “the right way” to use your innovation. Instead, pay close attention to the ways your innovation is used and let it influence your strategy. In most cases, a market comes up with ideas so diverse that you can’t possibly think of them all. Allow some flexibility for market influence and user innovation and make your users a remote part of the development team. There is no right way in innovation. Whatever works, works. Besides, letting users steer (a bit) is a great way to establish long-term customer relationships.

Keywords: flickr history, feedback mechanisms, user innovation

8. Foresee Diffusion

In Innovation, diffusion is a combination of how, why, and at what rate a new idea or technology spreads. In other words, successful diffusion means that an innovation “took off” in the market. Even though an innovation has made the first step into public awareness, immediate absorption is not guaranteed. Internally, missing a unique selling proposition, wrong positioning of the innovation towards its target market (or entirely missing it), insufficient quality or wrong communications can hinder diffusion. In the outside world, cultural aspects, existing competitors, strong existing standards (e.g. QWERTY vs. DVORAK), governmental regulations or lack of demand from target groups can cause a fail of diffusion. Diffusion is hard to predict up front, but key factors can be identified in order to avoid some of the mentioned pitfalls. Take a critical look at the current stage of the innovation and ask yourself what would have to change to push diffusion forward. While diffusion is a complex dialogue between innovators and the target market, identifying specific barriers is crucial.

Keywords: diffusion of innovations, the tipping point

9. Know the Key People

Innovations that diffuse follow an adoption curve. This curve can serve as tool to not only create milestones, but also to determine the key influencers of the diffusion process. Look at the individual consumer groups and analyse who fulfils these roles for your particular innovation. Who are the lead-users that we have to convince? What is the critical mass that takes the innovation into major adoption? The more precise you can define these key groups, the easier it is to target them. Look at similar innovations and evaluate who their key customer groups are. The S-curve is a useful and simple tool to quickly segment a target market. Don’t expect to find the same customer groups at all stages of the diffusion curve. It is likely that entirely different groups have to be targeted at different points in time.

Keywords: diffusion curve, s-curve, adoption cycle

10. Keep it Lean

Although it might seem handy to have massive resources to throw at innovation, keeping the process lean has significant advantages. Innovation requires regular re-combination of knowledge and re-configuration of structures, which is why the underlying process should be as streamlined as possible. In fact, following some of the previous points will already result in a rather lean development process. By taking advantage of available assets and restricting yourself to simple, straightforward ideas it is possible to innovate with much less waste. Allowing for a pull-mechanism from the market, rather than aimlessly pushing things into the market, is another characteristic of lean production. Whenever there is a chance to reduce waste or simplify a part of your innovation process, do it.

Keywords: lean production, Toyota production system, kaizen, lean startup, agile development, extreme programming

11. Facilitate Collaboration

If there is one direct action to take, this is it. Whoever the people in your organisation are – employees, partners, your mentor – make sure they have the tools to collaborate. This can be as simple as installing a Wiki on your web server or creating a collaborative document on Google Docs. Not only reduces collaboration the amount of waste and inefficiency in your communications, it also makes sure that no innovative idea is lost because of bad infrastructure. Many companies still hesitate to employ collaborative tools, although the advantages are obvious. The more diverse the user input, the higher the frequency of innovative ideas. Since innovation is about new combinations, it is important to bring all parts of an organisation together in one centralised place.

Keywords: collaboration, wiki, enterprise 2.0, social enterprise, collaboration platform, social media

Tags: Innovation

This entry was posted on Saturday, February 6th, 2010 at 18:14 and is filed under Innovation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.