100% effective method to kill innovation at your company
Is innovation important to your business? Probably yes. Are you having a team or a department of innovation? Likely. Are you sure you are not doing things that will make it fail? Probably not.
As the world of business is spinning ever faster each day, more and more companies realize that they need to innovate somehow. There is a bunch of strategies to do so like collaborating with design agencies or buying up and coming start-ups. Some companies decide to form their very own innovation departments. They hire eager creative people with the goal to bring freshness on board. And more often than not they feel disappointed as things don’t change. Why so?
The normal distribution of customers
Let’s consider for a moment how people adopt new solutions. We’ve got the Innovators and Early Adopters who are willing to try new stuff. Then we have early majority: people who are keen to purchase something new but only after they feel it’s safe to do so. They may not go for an electric car but for sure they stream on Netflix. then there is the late majority: people who buy stuff only when it becomes a bargain or they can’t use their old stuff anymore. In the era of DVDs these wold be the people to buy a DVD at a supermarket. Today they are getting used to shopping online as we speak. And, finally, there are laggards: people who will never accept a solution, no matter how many others use it. My late grandma chose never to switch from the analog phone with a rotator to the one with buttons. But don’t feel to smug. Everyone of us is a laggard in some ways — let it be the tooth brash, the ways of spending holidays or the time you go to bed. It is only sane to have laggard behavior in some areas. Otherwise we would go crazy from overstimulation.
Where is the money?
If you consider the product adoption process from the economic perspective, it goes like this:
There is fairly little money when it comes to selling to Innovators and Early adopters. It doesn't mean that they are not willing to spend quite a lot of money on new products. Quite the opposite. The tick is that there are relatively few of them, so even with a high price tag you can earn only so much on them.
The actual sales at scale begins with Early Majority — if you are able to sell to these people your market share and your profit will grow. You reach the pinnacle, when you manage to hit the late majority. Hence, it is very likely that your price had dropped at least three-fold by then. But for sure you are in the steady business.
Running the business
It doesn’t take a rocket scientist to see that the most sane thing any business can do is to focus on catering the needs of the Early and Late Majority. this is where the money is after all. But here’s the problem. Both these groups are fairly conservative in their expectations. They don’t want the newest shiniest innovation you came up with. They want their regular tooth brash. Maybe in a different color or a slightly different shape. But it needs to resemble what they know. What they are used to. They are willing to accept an improvement on their current reality but not the alteration of it. They can consider purchasing a cordless vacuum cleaner but not a cleaning robot.
So, the running business keeps a close eye on them. It investigates their needs and thinks of the incremental improvements that will convince them to purchase almost the same thing once more. Or to upgrade. Or add one more element to what they already have. It feels like the only sane thing to do if you want to maintain your customer group. But is it?
There is the growing realization that simply running business as usual is not enough. Hence all the strategies companies adopt to innovate, including creating their very own innovation departments. But how is it typically done?
Many innovation departments are located in the midst of the running business. They are led by people who report to those who are responsible for keeping the current customer base happy. Who focus on growth and profit. Who expect quick results. And this is the 100% effective strategy to kill any innovation there might be. Because innovation never sits in the running business. It lurks on the fringes where the Innovators and the Early Adopters are. And where there is not enough money to satisfy the expectations of the running business. Because if it were, it wouldn’t be innovation. It would be running business.
Is there a way to do it?
April Mills who wrote a book about becoming a change agent, keeps on blogging about the tips and tricks on how to create a sustainable space for innovation and any other change any organization seeks for. She also eloquently talks about it here. If I were to summarize the five main points, they would sound like this:
- Start small — find the Innovators and the Early Adopters in your own organization and create a team out of them. If you build an innovation team out of early and late majority members, you can only imagine that their focus will never hit the fringes.
- Give them protection — an innovation team can’t be managed by those who focus on the running business. If you allow them to have a say, they will unconsciously kill any “unprofitable” idea. Find an Innovator among your top leaders and let her become responsible for innovation at your organization.
- Give them the right success measures— innovation is not going to be born over night. If you are aiming to see the results create a success measurement that is not tight to money and profit. It can be word-of-mouth. It can be the level of provocativeness towards your running business. Or it can simply be the freshness if ideas comparing to the rest of the market.
- Give them freedom — if there is a place to adopt the “expert state’: a space where the experts have the final say, this is it. Innovation teams need to be self-running teams, otherwise they will just become the developers of the leadership ideas.
- Allow them to look for inspiration — it is unfeasible to expect that the innovation teams will perpetually run doing projects. The individual creativity can only take the team so far. Innovators need to keep on being inspired. They need to feed off the ideas from different groups and different domains. They need to have their creativity constantly stimulated. Some of this stimulation comes from being exposed to new knowledge, some of it comes from being idle and thinking. There needs to be space for both.
Is it a guarantee that some innovation will pop up? Certainly not. But building an innovation department with such support greatly increases the chances for developing a proverbial ace up your sleeve. Maybe not for today or tomorrow but for the future. Some of the ideas can become hits in a shorter term, some need even a decade (like, for example, MS KINECT, which was build in 1999, only to hit the market in 2008). So, if you plan to keep your business for the next few years perhaps it doesn’t make sense to invest in innovation. But if you plan to stay on the market for longer, you better have some people who think log term ideas. It just doesn’t make sense to see them the same way as those who run your business. Otherwise you will just have one more department doing pretty much the same only with a fancy name to it.
Aga Szóstek, PhD is an experience designer with over 18 years of practice in both academic and business world. She is a creator of a tool supporting designers in ideation process: Seed Cards and the co-host in the Catching The Next Wave podcast.