Innovation & Status-quo
I don’t know it all, and I assume neither do you… but if you do, stop here because this article will just be a waste of your time ;).
What’s this article about?
- Numbers
- Innovation
- Abstracting
- Routine
- Basic Expectation
- MAYA Principle
- Status-quo
1. Numbers
If we look at the Fast Company report The World’s 50 Most Innovative Companies in 2019 we can see a lot of company names that we never heard of. But their stories are very interesting, about how they managed to offer common services in different ways that differentiated them from their competitors, about how they managed growth and how they achieved billions in profit. Inspiring success stories that for sure have a lot of work, inspiration and maybe some luck behind them.
If we look the other way around (When product launches go awry: 50 worst product flops of all time) we can see large organizations or startups that failed in building innovative products. Is it because their idea wasn’t good enough? It could be one reason, but let me list other:
- There is no magic innovation formula. (it would be really odd if there was one, I imagine)
- Lack of VISION understanding and team alignment
- Bad or lack of Sales & Marketing STRATEGY
- Wrong identification of target AUDIENCE
- Lack of EMPATHY within a team and towards users
- The world is not yet prepared for your IDEA
- Trying to innovate using the same old methods of building products. Many companies are very conservative in terms of EXPERIMENTING with new methods and remain hooked in their own status-quo
- No Value Proposition VALIDATION in early stage
- Wrong RISK ASSESSMENT
- Bad EXECUTION
- and the list can go on and on
According to McKinsey, 84% of executives agree that innovation is critical for their business but at the same time, 80% of business models are at risk. Only 6% of executives are satisfied with their innovation performance, even though just 4% have not defined innovation as a strategic priority. How hard is to innovate? To sum it up: 11 out of 12 startups fail while 19 out of 20 product innovations fail. True, these are numbers from 2010 but things haven’t improved too much in the last years.
According to the 2017 PwC’s Innovation Benchmark Report 54% of the executives struggle to align innovation strategy with business strategy and 72% say they're not out-innovating their competitors. The main challenges are:
- Too long development times: 42%
- Selecting the right ideas: 32%
- Risk-averse culture: 31%
- Lack of coordination: 25%
- Not enough great ideas: 22%
- Marketing innovations: 20%
Seems like 82% of organizations run innovation the same way they do regular operations, from which 72% miss crucial growth opportunities and 60% struggle to learn from past mistakes.
It’s interesting to see that innovative companies are pushing the boundaries of innovation both inside and outside their organizations by breaking down traditional barriers and seems that more collaborative operating models outpace traditional R&D, so we have:
- Open Innovation: 61%
- Design Thinking: 59%
- Co-creating with customers, partners, suppliers: 55%
- Traditional R&D: 34%
Human experience and insights of all kinds seem to gain ground contributing to delivering new ideas, solutions, products or services, bringing value to market and businesses. In the same PWC report, 60% of the participants answered that internal employees are the most important partners for innovation, and 65% consider that innovative behaviors and culture is the most important factor that impacts successful innovation.
Why are these numbers important? Because they ring a bell, that in order to build innovative products or services, organizations need to first strategize innovation, need to make their culture more flexible and change their status-quo. This is a process that for large companies could take years, and that’s why innovation strategy should grow in parallel and in sync with the business strategy, even to merge in certain points.
Let’s break down things by starting with what innovation is and explore different methods that could help to shift to a culture of innovation in organizations.
2. Innovation
According to a 2014 survey on how the software industry defines innovation, a definition given by Mary M. Crossan and Marina Apaydin was considered the most complete:
“ Innovation is production or adoption, assimilation, and exploitation of a value-added novelty in economic and social spheres; renewal and enlargement of products, services, and markets; development of new methods of production; and the establishment of new management systems. It is both a process and an outcome.”
We often see articles about success stories and innovative ideas, we see millions of dollars flowing around between companies, and these things influence many to focus on metrics like how to monetize an idea, how to increase sales or how to be famous, rather than on how their idea can improve people’s life. That often leads to a wrong path to follow because these are outcome metrics that don’t have the quality to help you start, maybe just to grow.
If you are looking just to the surface and start envy or idolatrize those who succeed you will miss the opportunity to learn from those who failed, and more importantly, you will miss learning from your own mistakes. This is a lesson that applies to our daily lives as well so we should already know it, right? But do we always follow it?
Under each success story, there is a lot of hard work, a lot of setbacks, and maybe drastic vision pivoting. We often don’t read about these things because they are boring and unsatisfying. Let’s take for example Pinterest, the popular “pinning” social network that pivoted from “Tote”, an app that allowed users to browse and shop their favorite retailers. The creators of “Tote” realized that the users were more interested in adding favorite items in their collection and then share it with friends. This was the trigger that shifts Pinterest’s business model into what it is today. An app that has over 70 million users from each 80% being women. If that made you intrigued, here are other 14 Famous Business Pivots that could inspire you.
Innovation is mostly about learning, experimenting and re-shaping ideas.
3. Abstracting
But let’s abstract to a minimum on what innovation is:
- Remixing
- Good execution
- Value
Remixing
Did Google invent the search engine? No, but they made it better.
Did Tesla invent the electric car? No, but they made it better.
Did Slack invent the chat? No, but they made it better.
Did Airbnb invent booking? No, but they made it better.
Did you get the idea? Hopefully yes.
It’s all about mixing existing ideas, model them into new shapes and with a touch of empathy, build the right product that solves a real problem. You should always have in mind this question: How would my idea improve peoples lives?
Good execution
You may have a genius idea, a solution to a problem that many people or businesses face. That could give you the marketing gap you have to fill on a platter. But with a bad implementation, you are just as doomed to fail like any other with a bad idea, for example. Here’s where quality should beat quantity.
Value
I think that many still confuse value with money. Of course, you want to earn a lot of them at some point. But money is just a consequence rather than a goal. Value is about how can your solution can make peoples lives better. If they see meaning in your product or service, they will be more than willing to pay for it. Track client’s satisfaction, track user’s behavior, do user testing, request constant feedback and fix pain points. Validate before build and learn what value is, before is too late.
4. Routine
Our daily life is a set of routines. We brush our teeth, we eat breakfast, we meditate, we jog, we go to work, we go out with friends or family, we watch GoT, or whatever. We each create a script that we follow almost without deviation. Our brain loves this, trying to be as efficient as possible. But there is another thing that our brain loves, and it’s called disruption. If you decide one day to disrupt your vacation’s routine for example and do bungee jumping, if you make it out alive, you will create a powerful memorable moment in your life that you will remember forever. These things are well described and exemplified in the amazing book of Chip and Dan Heath: The Power of Moments.
“Routine is the enemy of innovation”
Tom Kelly, the general manager of IDEO and the author of the bestselling Art of Innovation.
You can imagine how a set of routines in an organization turns into a status-quo that every employee needs to follow. This is not a bad thing necessarily, but it can become one if the organization wants to strive for innovation. An organization that wants to innovate first needs to innovate the way it creates products. It needs disruption in its own working process and culture and must be opened for such a change.
But there is one more thing. This changes may conduct a new set of routines. What then? Well, that’s the whole point. To be seen as an innovative company, like Apple, for example, organizations need constant change. This should be a real routine and a sustainable culture, always experimenting, always look for new opportunities and always look for solving real-life problems.
5. Basic Expectation
One of the best theory that illustrates the routine changes over time is the Kano Model, one of my favorites.
We have two axes, one for Investment and one for Customer Satisfaction , and three lines representing:
- Basic Expectation (basic functionalities that a customer expects to have in a product or service)
- Satisfiers (constant customer request and implementation to keep them pleased)
- Delighters (that thing that the customer doesn’t expect that makes the experience delightful)
This small delights that break the routine may transform into meaningful and innovative ideas. But of course, evolution takes over and transform this delights into basic expectations over time. The internet for example at first was an amazing breakthrough that delighted everyone. Now if you don’t have free wi-fi in a Caffe or in a hotel, it’s like they are in prehistorical period and makes you think twice if you will re-visit them. You get my point. It’s important for businesses to always stay on top of things. Is their job to at least fulfill this basic expectation.
Here is an article by Jared Spool to help you understand better how this works: Understanding the Kano Model — A Tool for Sophisticated Designers.
6. MAYA Principle
Raymond Loewy is considered to be the founder of modern design and spent 50 years working in industrial, architectural, interior, product and graphic design. From his work we can extract Shell, Exxon, Coca-Cola vending machines, the Lucky Strike package or Air Force One branding. He was guided by his own philosophy that he called MAYA, or Most Advanced Yet Acceptable.
MAYA is about the stimulation of the new and the deep comfort of the familiar. Combining familiarity with futuristic, comfort with surprise to create something that’s undeniably interesting for people. You can build products that solve complex problems, but it all turns down to create meaning using wise simplifications. These things as well as many others you can read in Derek Thompson’s book: Hit Makers: The Science of Popularity in an Age of Distraction.
The human mind works this way, it needs to hook to something that is familiar, to have a foundation over which it is able to accept new things. That’s why research is so important. Because through research we can identify those familiar spots, common for a large audience, and then address it, presenting our solution to their common problem.
7. Status-quo
We have an old saying in Romania: “Vicious nature, has no cure”. I think there is a problem with these old sayings because they often keep us stick to old mentalities. We grow with them in mind and they have the power of even shape personalities. But this is a discussion for another time :).
This is exactly what an organization needs to stay away from. Staying anchored in these old status-quos is as if they oppose innovative thinking. How often we hear from stakeholders: We’ve done things this way so far and it works. Why should we change something that works? … but at the same time, they ask you to innovate. I think that it is as hard to change an organization status-quo from the bottom-up as is from the up to bottom. That is why a strategy, built step by step with everyone's involvement is the best way to change a culture, a process, a mindset, a status-quo.
In conclusion, in order to innovate, you need to:
- learn from yours and other’s mistakes
- experiment with different ideas
- look for quality when implementing
- make sure that your solution brings value to customers or businesses
- break the routine
- determine how you can delight your customers
- make sure your new solution has a certain level of familiarity
- disrupt your status-quo
To be competitive on the market you need to be time-efficient, cost-effective, and build empathy among employees and towards users.
Thanks for reading! 🤘
