Innovar — What We Are Learning

Otherwise known as going to battle with nine horsemen.

In conversations with current and prospective clients, the path occasionally deviates towards an acceptable meaning of innovation or how much priority it should be given in comparison to other ‘urgent’ issues within the business leader’s peripheral vision.

A Rake’s Progress, Part 2 — William Hogarth (1732–35)

Rarely is any consensus definition reached during these discussions, but instead the outcome often cuts through to either the question of, why am I told my business has to innovate or die? Or its more important follow up, how do I go about it?

First of, at every stage in an organization’s life cycle — from startup to decline, there is the small matter of ever-rising customer expectations. In many instances the actual stage of the business in the cycle can be directly mapped to how well it has responded to these expectations — or otherwise. And in traditional industries the ability of ‘staid’ market leaders to cope with the threats of increasingly eccentric customer demand is further exacerbated by new entrants who have figured out innovative ways of satisfying the customer and only need to hack distribution to replace the more successful incumbents. Today’s new entrants become tomorrow’s industry leaders and the cycles of innovate or die perpetuates itself indefinitely.

“It’s more important than ever for companies to focus on inventing the future. Companies have to start giving more power and prestige to growth innovation, or risk becoming irrelevant.” — Alex Osterwalder

Realizing the need for action raises inquiry on the how and it isn’t unusual to find business leaders displaying a high level of panic accompanied by the search for a radical intervention, that one silver bullet. On the contrary, solving the innovation puzzle while requiring bold steps in the right direction also calls for a careful evaluation of tools available to be deployed within the organization’s unique context.

In finding the right fit, there are two questions the business leader need ask. One is how vigorous a process do we seek to undertake and the second being do we prefer to rely on internal or external expertise or a hybrid of in-house and outside capabilities.

The sections that follow introduce available options and a choice depends on the preferred source of a program driver and also varies in increasing complexity.

Internally led interventions are often the easiest to undertake and perhaps best to control as most of the expertise deployed already resides in-house.

One. Bolster Innovation Capability within the Organisation. We take it for granted that most organisations already possess a fairly talented workforce employed for the task of maintaining the status quo or optimizing business operations as is. An innovation capability program invites members of the team to create new ideas or business concepts; the benefits of these are the opportunity to spark a thriving internal innovation culture and to design new products/services that can define the future of the organization and industry.

Two. Crack team — The Special Forces. Here, particular individuals within the organisation that have exhibited a penchant for innovating both internal processes or the customer experience can be organized into a cross-functional expertise sharing group and on an going basis be saddled with coming up new methods, products and business lines within the organisation.

Three. The Formal Standalone Unit. At some point it becomes imperative to establish a formal department within the organisation to coordinate all innovation activities and ensure that a culture of questioning the existing business design and executing radical business models (that are based on listening and responding to customer wants) is embedded within the structural fabric of the organisation.

Sometimes the search for a best-fit calls for a fresh perspective to challenges, and these programs anchored on reaching in from the outside may be a bit more complex to facilitate, but often times the out of the box point of view serves as a great way to kick start the conversation.

Four. An Innovation Challenge. This is an open event or a series of events usually requiring a big PR effort where members of an industry are corralled to butt heads and left to proffer solutions to internal organisational challenges and other issues concerning the company’s existing business model or to explore the future of the industry.

Five. A Non-resident Business Incubator. Tomorrow’s biggest threats to today’s market leaders currently exist in various stages from idea to initial prototyping. Organisations can engage in a search, screen, select, support, grow and evaluate approach to harnessing these external business opportunities. This approach entails exploring or calling for radical ideas or pre-market innovations that have the potential to disrupt the incumbent’s industry and then provide an incubation platform to speed up taking the idea to market, in exchange for a stake in future success.

Six. Full Blown Investment Fund. Closely related to point five above is the creation of a fund that seeks to take up investments in external opportunities with already demonstrated proof of concept or some form of market traction. As a guide, the company only has to identify opportunities that are in line with its strategic objectives and position itself as a white knight via a full acquisition, merger or stake purchase in any of these startups showing potential.

The last sets of innovation programs — hybrids — mix internal and external capabilities, and like the preceding categories vary by intensity and desired overall objective.

Seven. Design Sprint. Also known as the flagship program at Gumi. Highly practical in nature, it entails five days of crucial conversations where real life customers are involved in the process of prototyping or testing new initiatives to enable the organisation make rapid progress on propositions seen by the customer as their greatest pain points. The sprint relies on knowledge, feelings and tools that every participant of the program already possesses and thus compresses an endless debating cycle and periods of time into a single workweek.

Eight. In-house Accelerator. These programs have become the mainstay in SV giants who allow employees to free up time outside existing work configurations for the pursuit of special projects or ideas. The next step is to then equip this in-house talent with resources and capabilities to bring their ideas to life and if successful, independently grow them to boost the organization’s prospects. The main advantage of this program is it allows for the all too important cross between internal knowledge and exploration of new opportunities and paths for growth.

Nine. New Business/Service Lines. Sometimes the path to innovation appears when businesses beam the spotlight on smaller or emerging business divisions or value propositions, which on careful selection demonstrate the potential for profit and becoming future large business units or cash cows in the corporate portfolio.

There go the nine horsemen.

In exploring the best innovation program for an organization, other questions exist that can help in deciding which option or sequence of options present the best path for securing the future and coping with the threat of the barbarians at the gate.

And at this point in the firm — client conversation, considerable progress will usually have been made towards showing what the organization stands to gain and how it can secure an ‘unassailable’ position in future.

There is a quote by John D. Rockefeller that simplifies our primary philosophy on innovation and getting clients out of their comfort zones into new growth areas:

“If you want to succeed you should strike out on new paths, rather than travel the worn paths of accepted success.”

Gumi & Company

Fun trivia: The title of the painting above is Surrounded by Professors and Artists. At different times we see ourselves as one or the other, either describing in vivid imagery, what the future of a client’s business should be or at other times simplifying complex business concepts towards creating forward motion.