The State of Business Innovation Today

Let’s face it. Innovation has been over-hyped these past few years, forcing CEOs to proclaim it was and may still be critical to their companies. Middle managers have been assigned to be innovation managers and to innovate or else face the consequences.

Idea management software has been bought, brains have been stormed dry and consultants of dubious nature have sold useless innovation advice at hundreds of Euro per hour. Not surprisingly, managers are starting to feel they’ve been led on. “This innovation thing has just been another business fad!” they proclaim, while wondering what the next fad will be.

Are they correct? Has innovation been useless hype? Well, the answer is yes and no. As I wrote recently, all companies are innovative. All companies innovate. That’s why Ford’s cars today are technically far, far advanced from the Model T. Products are improved. Processes are improved. But, for the most part, these improvements have been incremental. Breakthrough innovation is much rarer, harder to implement, disliked by management and employees and often greeted with disdain by customers. Really.

Customers Often Dislike Your Innovation

Think about it. If you use Facebook, what happens with every major upgrade? People complain. Bitterly. And they do this even before they accustom themselves to the changes. Why? They don’t like changes — especially changes outside their control. Those changes may well make the user experience better. Facebook certainly thinks so. But users don’t like changes. But, as they have no choice, they become used to the changes and even come to like them so much that they complain bitterly with the next round of changes. Yet no one wants to revert back to a significantly older version of Facebook. That would also be change.

Almost 30 years ago, Coca Cola innovated their star drink and launched New Coke. Research, taste tests and more indicated that the flavour of the new drink was much better than regular Coca Cola. But no one liked the new drink. It was a failure and soon was consigned to the history of disastrous marketing mistakes. Coke drinkers, it seemed, did not want newer and better. They didn’t want anyone innovating their favourite drink. The wanted the same old thing.

Indeed, very often when a company attempts a significant change of a major product, it is met with derision and dislike. Customers complain. They don’t want change. They don’t want radical innovation, thank you very much! Incidentally, Coca Cola apparently continuously tweaks the ingredients in its drinks — resulting in incremental change. Their customers don’t mind that. Incremental improvement is desirable. Big change is not.

Innovation Initiatives Often Fail to Deliver

Sadly, the experience many organisations have with innovation initiatives is that they fail to deliver. Suggestion scheme and idea management software products generate 100s and 1000s of ideas, many of which often sit in the software’s database awaiting further development. Brainstorms take expensive employees out of the office for a day or two and generate dozens of ideas. But those ideas are seldom very new and are often buzzword ideas. Often, ideas from brainstorms are not implemented and those that do get developed tend to be ideas managers were working on already — the brainstorm was just a means of legitimising those ideas as innovative. Even when the brainstorm manager chooses the best idea, research indicates she is most likely to choose moderately creative over highly creative.

There are a number of reasons why these initiatives fail. Sometimes it is because consultants were not very good. Sometimes it is because initiatives are poorly conceived and not in line with corporate strategy. But often, it is because people really do not like creative ideas. And innovation comes from the implementation of creative ideas. Think about it. Managers tend not like implementing creative ideas, because they are very risky. And while most managers would love to be behind a highly successful innovation project, their fear of being behind a project that fails is greater! As a result, most managers prefer to back less risky — and hence less innovative projects. A project to improve slightly a top selling soft drink is far safer than a project to re-conceive that soft drink or launch an all new, untested drink product. How do you think the team behind new Coke felt?

Moreover, employees do not like the change that innovation brings, especially when they have no control over that change. And they hate it if they fear that the change will cost them their jobs. This is perfectly understandable. Would you be in favour of an innovative idea that would lead to your unemployment?

When You Need to Innovate

So, you, your managers, your subordinates and your customers all dislike innovation — at least big, obvious innovation that involves significant change. So, why on Earth is innovation your company’s number one priority? Why is it important to you? Why is it plastered all over your company web site? Why are you hiring innovation product managers when you don’t really want them to be innovative — or at least not very innovative?

To be honest, I don’t know!

But I do know this. There are times when you need to get creative, develop truly innovative ideas and implement them. Here there are…

No Existing Solution to a Problem

Thanks to modern technology, it’s remarkably easy to find proven solutions to problems. My partner dropped her smart phone and cracked the glass cover over the screen. She contacted the company that supplied the phone and they told her it would cost 100s of Euro to replace the screen. Then we spent 10 minutes on Google. We learned how to prise the glass cover off the phone and replace it with a new glass cover. Then we found companies in China that would sell us a cover for a couple of Euro! Would creativity have helped here? Probably not.

But sometimes, there is no established solution or there are reasons you cannot use the existing solutions. Some 40 years ago, a scientist at 3M developed a moderately sticky adhesive that could easily be removed from surfaces. He thought it was cool, but had no idea what to do with it. At the time, there were no established uses for glue that didn’t stick very well and the product languished in 3M for years before a solution was found through creativity: put the glue on little pieces of paper. PostIt notes were born.

Faced with Disruptive Innovation

What do you do if your company has been plodding along happily for years making a quality line of products — and one day some small start-up invents and launches a product that causes your market share to disappear within months? You basically have two choices. Pretend the disruption won’t affect you because your products are better than the start-up’s or innovate in a big way! To me, it’s obvious the second choice makes more sense. But corporate graveyards are full of businesses that ignored disruptive innovations which they believed inferior to their long-established products. Kodak and Polaroid were brought to bankruptcy by digital photography. Fuji, another highly regarded photographic film company, survived by being innovative with their business model. Yes, Fuji was hit hard and lost a lot of business. But the company survived thanks to some serious innovation.

Different Differentiation

Imagine you are mandated with developing and marketing a new brand of toothpaste. There is a lot of existing literature on how to market new products and, in particular, the importance of differentiating your product. But if you look in any supermarket, you will be overwhelmed with dozens of different kinds of toothpaste — each one ever so slightly differentiated from the other. The only way you will get your product noticed in such a mess of mediocrity is not to differentiate – but to be radically different. No marketing book will tell you precisely how to do that. Rather, you will need to come up with some crazy idea about how to package, market, deliver or sell your toothpaste — or it will simply get lost among the zillions of competing products.

This is what Apple did with its iPod and iPhone. When they launched the iPod, there were many digital music players on the market. But Apple’s was sleek, easy to use and beautifully designed. It was cool and different to the others. Likewise, there was an overabundance of mobile phones on the market when the iPhone was launched. But it’s easy to use touch-screen was different and desirable.

Invention

Sometimes, you just have a brilliant idea as well as the wherewithal to build it and bring it to market. Twitter is a good example. Who knew millions of people would devote so much time to posting short messages on the web? If you had asked me, I would have guessed the idea was daft. So, it’s a good thing the founders never asked me!

At other times, you simply spot an opportunity to exploit. Microsoft did this when IBM launched the first personal computer. Until that time, software was not big business. Computers were. So, IBM happily licensed Microsoft to provide an operating system for their computers. Jeff Bezos quickly grasped that the world wide web was a great place to set up a bookshop — and Amazon was born.

In situations like these, it pays to be radically innovative. It’s worth building wildly creative ideas and testing them. It’s worth taking the risk of innovating in a big way.

But in your day to day operations, you are probably right to focus on incremental improvement over big innovation. It will keep you and your customers happier!

image credit: financial symbols image from bigstock

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  Jeffrey Baumgartner is the author of the book, The Way of the Innovation Master; the author/editor of Report 103, a popular newsletter on creativity and innovation in business. He is currently developing and running workshops around the world on Anticonventional Thinking, a radical new approach to achieving goals through creativity — and an alternative to brainstorming.