The system of Innovation
Is innovation the problem?
Innovation is a term that gets used a great deal, often with only a vague notion of what it is. Companies will often decide that they need to be more innovative. This can often be because their competitors are starting to pull away from them in their market, and are seen as doing so because they’re ‘innovative’. They become convinced that if they release a new product, that will solve everything. Sometimes that’s the perfect solution, but other times it isn’t.
Because being innovative doesn’t mean making a new thing. It’s an approach to running the whole business in an innovative way that creates the environment in which innovative products can come out as a natural product of normal operation.
Businesses are machines
Businesses are complex systems, that need to have all the constituent parts operating correctly to function, and to accelerate, the systems need to be changed to enable the business to run at the faster pace demanded by the modern world. Inventing a great new product but then trying to force it to fit into an old system, with outdated processes will never reach the full potential of the product.
The system for innovation
For a new product to be a success, it needs to come from the business machine, to work efficiently with all parts of the system, if you’re trying to disrupt your market, you’ll need to start by disrupting how your business functions so that you move to an innovative, Agile business that enables new products to come into being.
A clever new bit of software, bodged back into an old computer will always have to deal with the legacy hardware, resulting in much time spent on working around the hardware. The end result is always better when the new software is developed with new hardware, and the two are designed to work together as an efficient system.
Innovate the System
Innovation is a simple idea really, it’s taking an idea and turning it into revenue. But how you measure revenue can vary depending on the problem you’re trying to solve. Looking at your business as a system and trying to identify areas that are not as efficient as they could be, or have the potential to improve. Define the objective, and work on ideas to improve. This might be as simple as moving from a paper based process to an electronic one. The new revenue is the shorter time to complete a task.
The Machine of Business
Going after a new market, or trying to regain a market share, requires the ideal machine for the job. It is important to understand the market, particularly if you’ve lost share, because it may be that the nature of the market demands that you start doing things differently. It might be that you need to move from making a product to selling a service which could be a slight twist on what you already do, or the market may require a wholly new approach to your way of doing business
The problem of Innovation
It’s sometimes easy to say ‘We need to Innovate’, tell someone to make a new product, and then assume everything is fixed. But to be truly innovative, we need to be sure that we are solving the right problem, which means we need to understand what we are trying to achieve. If a competitor is selling more products than we are, what are we doing differently in our approach and day to day operation that is not enabling us to be the market leader? If we’re going to commit to being innovative, we need to be prepared to admit that the system of how our business functions may need to change.
We need to solve the right problem.
(First published on LinkedIn)