We're going to focus on innovation - what it is, how it works, it's role in business performance and
broader trends and implications for the economy and society. Including the notion of how to judge it as a stakeholder. As it happens this is a theme we've been striking for some time and we'll review the previous discussions later on. The gist of our hammerings are threefold:
1) Innovation is widely and broadly mispercieved - all to often being viewed as an isolated pocket of activity and not as the broad multi-function, multi-process and cross-enterprise set of inter-linked activities it needs to be.
2) Innovation is generally not well handled - most businesses will give lip service to the need for innovation but when push comes to shove they'll cut the resources devoted to it. Given that they've already been doing it badly that may not be such a bad short-term idea but it's going to leave them terribly positioned for the foreseeable future.
3) Performance and competitive pressures are going to see an accelerating macro-scale series of on-going disruptions from the functional to the company to the industry to the economy-wide scales for decades to come. Failures to grasp the widespread disruptions that are entrain will lead to the kind of "penalties" that the Auto Industry is paying, the Finance Industry paid and will keep on paying and will hit every other single industry in the developed world. The times they are indeed a'changing.
Needless to say, with these recurrent themes in mind, we were absolutely tickled to see Business Week (long a loud and informed champion of good design and innovation) publishing a story a couple of weeks ago on the failures of innovation over the last decade. The graphic is borrowed from that story and nicely illustrates the point; and if you have trouble believing it then ask youself why 'ol Larry-boy at Oracle has been feverishly consolidating things, why MSFT hasn't made any major breakthrus or why the pharmaceutical industry suddenly tipped over into hard times about 6+ years ago (again something we've been arm-waving about for a long time).
Re-Imaging the Airstream: Imagination in Action
While we were contemplating this post we ran across another TED Talk on the designer who helped to re-imagine the Airstream Trailer for this century instead of the last one. His engagement started out as an exercise to showcase how laminates could be re-thought for the interior. What he found was that the Airstream, originally conceived as a forward-looking icon of the open-road, freedom and innovation had received the interior of a '50s mountain-cabin. Not bad in and of itself but not consistent with the supposed strategic theme; and not likely to appeal to new markets, like active sports enthusiasts. Thereby locking Airstream into its old and dying marketspace. By (literally) taking the trailer down to bedrock they were able to build a prototype that reimagined the interior and then use to that to re-imagine a whole new and modern trailer with a completely re-thought interior that was consistent, appealing and which created new value for new markets. There are some real lessons here that everybody who buys into our basis thesis needs to pay attention....or join the roadkill. (Chris Deam Re-imagines the Airstream)
Innovation As-Is vs Should-Be: Going to the Movies
One of the interesting things the movie industry has started doing is loading up the DVDs they sell
with all sorts of special features giving you the back-story on how the thing was conceived, developed and delivered. The first time we really paid deep attention was listening to all this was for Sky Captain and the World of Tomorrow but since then we've made a special effort for every major movie that interests us. The preeminent example is Pixar and it's string of hits. Two things we'd point out about all that, perhaps three. First, they've proven that they can keep it up time after time. Second, do you think it was an accident that (maturity aside) that after Jobs went back to Apple his long-standing interest in good design and innovation took a couple of quantum leaps ? And third (something we gleaned from listening to the 2nd disc of the Ratatouille DVD set) the recent string from the Incredible to Cars to Up was conceived years ago at a restaurant lunch meeting and sketched on napkins. A familiar process for anybody who's ever had the joy and terror of playing on the bleeding edge. Of course from napkin to delivery to sales is a long....long way.
The graphic compresses the long discussions in a couple of prior posts and also captures 25+ years of sustained experience in trying to move from how it's typically done poorly to how it should be done well. Based on that experience we guarantee that anybody who manages to get this blueprint in place will start having some real impacts and will, in fact, be able to create a sustainable habit of innovation. Contrawise you can use the blueprint as a diagnostic of failures. If you were to go back and re-visit the various movies that have been wildly successful you'll find these arguments supported. You might, for example, compare and contrast Lord of the Rings with King Kong with typical run-of-the-mill summer thriller. Or consider Pixar or the Harry Potter series as other examples.
All too often what you find in companies doing the lip service thing is that at some point in their history somebody had a bright idea that's thrown over the wall to Development and if it sticks (in the marketplace) all well and good. After the original idea is turned into a product more or less then Marketing is called in to put lipstick and ribbons on a pig and it's handed over to Sales to push into the customer base. Over a period of time this becomes embedded in the corporate culture and feature after feature that creates no appreciable new value from the customer's view is stuffed out there. Two major problems exist on this level. First, invention is NOT innovation. Innovation turns invention into new products and services that create incremental new value, not move beyond the 80/20 cutoff point of death. Second, the transom-throwing is a Vegas crapshoot that's playing a numbers game. There's always going to be elements of uncertainty but you can change the odds in your favor dramatically by doing it right.
Doing it right starts with understanding customer and market needs, wants, desires, values and characteristics. Stop me when the failures of Detroit come to mind. Let me stop you if they don't but pick your industry. THEN the original problem identification goes thru a Design phase where the market-based, problem-solving goals are translated into product characteristics. Think about the LofR - Tolkien had a magnificent concept based on his life experiences and a lifetime of work in mythology and languages. That got us into the Design stage with the books if you would. Then the script-writing team spent years, literally, taking the books down to the next level of developmental detail. The extended edition DVD discussions on the subject are, IOHO, worth the price of the set for this alone. They're also worth it for the discussion of how special effects, weapons and fighting, horsemanship, filming, production design, etc., etc. etc. were all brought together in a synergistic blend of functions into a cohesive cross-functional development and delivery team. And serve as a model for how real, deliverable innovation should be being done by business or any other organization that needs to create new value.
Innovation Is A Team Sport
That highlights another major facet and the review of the LofR DVD will flesh it out if you pay attention and really think about what you're hearing. Innovation is not the result of any single innovater or even a small core. It's the result of a team scaled to the size of the problem with a wide and appropriate range of skills all working together.
Before we run on we suggest you run out and read Car: A Drama of the American Workplace by Mary Walton which discusses the design and development of the Taurus that save Ford when it first came out. A book that Ford tried to kill eventually after providing unprecedented access but perfectly illustrating our points - large and small. As well as Twenty-First-Century Jet: The Making and Marketing of the Boeing 777 by Karl Sabbagh about Boeing's creation of the 777. Guess who the Program Manager was for that and what he's doing now ? Now the graphic is adapted from the Technology business and it's worked for us for a long time; and contrawise killed us when we couldn't get the required executive support. But if you check out those books you can map what Ford did and doesn't and what Boeing did and still does (consider the Dreamliner) to the framework.
A Closing Thought: Tsunami's of Disruption
Just a brief closing thought, having run on at great length longer than intended. As the world continuse to go thru massive re-alignments, new countries enter the mainstream of the developed world and make their own moves up the value-add ladder of innovation we're all going to face continuous disruptions. We can no longer count on the occasional miracle to save us, our jobs, our companies or our socieities. On the other hand we've coasted for almost sixty years on the innovations that came out of WW2. Isn't it about time to do it again ? In any case the choices are not to avoid the problem - only how we deal with it. The graphic is from an earlier post that walks thru all this in some detail AND provides the evidence to back it up.
In the readings below you'll find some are on general principles and practices while others are on specific cases. We recommend, highly, at least skimmin them ! We don't have the space to walk thru each reading and map it to this discussion but that'll be an interesting exercise for the reader, right ? :) More to the point we've collected ALL the prior posts in a single downloadable PDF file and included this one as well. In that file you'll find extended discussions on each of the major components as well as discussions of P&G, examples from Apple to Yahoo to MSFT to the Auto, Energy and other industries and lots of tools you can "borrow". The various posts also give you the URLs for the on-line posts which we recommend if you want the background details. Our estimate is that there's a collection of 20-30 pp. of short paragraph excerpts you might be interested in: Innovation: From Aha to Development to Delivery
Two Cases of Innovation Thinking
Just ran across two outstanding interviews on Charlie Rose that bear on the topics at hand. The first with Ivan Seidenberg of Verizon and the second with Jeff Immelt of GE. Why should you watch - well we started talking about something we called the Theory of the Case (Beyond Specifics to Principles: Business Performance Principles & Outlooks) where you had to think about balancing today and the future as well as operations and strategy. Both are exemplars of that. Seidenberg not just for Verizon's strategic move after FIOs, it's fibre-optic network, but for what he has to say about the future of telecommunications. Immelt for his assessment of the industries and regions that one has to be positioned in for today and tomorrow. Both also come down heavily on corporate social involvement and responsiblity, another of our "pounded" themes. The graphic is taken from our recent dissection of the Automotive Industry while the embedded title is from an earlier discussion of business performance, though not the first introduction of the idea. In any case we really recommend, and hope, you listen to these interviews careful. And then apply some notions like these to diagnosing what you're hearing. It'll be worth your while IOHO ! :)
Continue reading "Run For Daylight: Innovation, Innovation, Innovation (Adds)" »