Stories of innovation usually follow a simple, but common narrative. Someone gets an idea, figures out how to make it work and changes the world. Yet that is rarely how it actually happens. Far more often, someone comes up with a great idea and it never gets off the ground because no one is willing to accept it. Continue reading “Transformation Takes More Than Ideas”
“The biggest change you are going to see over the next year is that we want to bring our toy stores to life,” newly minted Toys R Us CEO Dave Brandon told a reporter a little over a year ago. “I want kids to be dragging their parents to our stores because they want to see what’s going on at Toys R Us this weekend.” Continue reading “You Can Never Build The Future By Looking To The Past”
“Digital innovation laboratories are everywhere — and observant onlookers have had a few years to evaluate the results. I’ve had the privilege of meeting many of Singapore’s bank and insurance innovation teams and have heard numerous inside stories that give me a unique perspective on their successes and failures. In most cases, the labs haven’t truly succeeded in bringing innovation into the parent, despite their marketing departments’ attempts to show otherwise. They are failing in their primary mission. This is not for lack of trying, but because they unwittingly apply patterns of behavior that destine them to underperform.
At the risk of oversimplification, I will summarize these unique behaviors into what I call the “dirty dozen.” This list isn’t comprehensive; I look forward to comments suggesting other significant factors. I hope that if you recognise these behaviors in your own lab, it will help you initiate change to improve your results. …”
The tech media is obsessed with innovation. Front pages of sites like The Verge, Wired, or Fast Company tell us very clearly that innovation is all about cool, new ideas. Pragmatic iteration is overlooked as the boring rehashing of old things, while exciting ‘moonshots’ and 10X leaps are fetishised. However, the opposite is often true: the most successful companies in the world focus on nailing iterative execution, not constant reinvention. Continue reading “Innovation is Overrated: How Execution Can Make Up For an Average Idea”
Are we innovating in scholarly communications? What does it mean to innovate? This month the Chefs explore innovation. Come let us know your thoughts!
The post Ask The Chefs: What Is The State Of Innovation In Scholarly Communications Today? appeared first on The Scholarly Kitchen.
Workboard, a startup that develops software for companies to manage and measure their business strategies, has raised $9.3 million in a series A round of funding from Microsoft Ventures and Floodgate, with participation from other existing investors. Continue reading “Microsoft Ventures invests in strategy management software startup Workboard”
What happens when a traditional model no longer works? As Global Head of Strategy & Agency Business Development for Reuters, I’m in charge of identifying new avenues for our media business to pursue. That means I look for new ways to generate revenue and drive profitability beyond our short-term horizon, which entails exploring new areas and trying to bring untested ideas to fruition. Experimentation is a big part of my team’s mission. To rethink the way you can bring value, you must keep a sense of open-mindedness and be accepting of fresh ideas. Over time, I have learned that experimentation has to be more than blind trial and error. It has to be thoughtfully devised and strategically carried out. Here are several characteristics of an experimentation-focused outlook I’ve found have served me well: Continue reading ““More than blind trial and error”: Leveraging experimentation to shape the future”
In 2006, Blockbuster Video launched Total Access, a service that allowed its customers to rent videos online and return them to stores. The strategy was an immediate hit with customers and before long its online unit was making big gains against Netflix. It seemed that the video giant had finally cracked to code to renting videos on the Internet.
Alas, it was not to be. Investors balked at the cost of the new plan, while franchisees feared that online rentals would make them obsolete. In 2007, the company’s CEO, John Antioco, was fired and the online strategy was scrapped. Just three years later, in 2010, Blockbuster filed for bankruptcy.
Traditionally, we have looked at strategy solely as a set of plans designed to achieve specific goals. However, as we increasingly operate in a world of networks rather than hierarchies, leaders need to learn the lessons of social movements and focus on shared values. As the story of Blockbuster shows, you can’t change behaviors without first changing core beliefs. Continue reading “You Can’t Change Fundamental Behaviors Without Changing Fundamental Beliefs”
Completed in 1928, Henry Ford’s River Rouge plant was a marvel of its age. It was almost 100% vertically integrated, even producing its own steel and by the 1930s over 100,000 employees worked there, producing nearly every component for the cars that Ford built. It was, at the time, considered to be a key advantage.
Nobody makes factories like that anymore though. It wouldn’t make any sense. In today’s economy, it would be impossible for any one firm to be competitive in more than a handful of the thousands of components that go into a modern automobile. That’s why today we have global supply chains.
All to often, we think of innovation as an problem of developing internal capabilities but in today’s world, far more value can be unlocked by widening and deepening connections. So we need to learn to use the entire ecosystem, including partners, suppliers, customers and open resources and think in terms of value networks rather than value chains. Continue reading “Innovation Isn’t About What You Control, But What You Can Access”
Every bold new business idea starts with a success story. Either it is a single organization or an aggregate sample that implemented a particular strategy and achieved outstanding results. That solid track record helps to convince others to adopt it, yet somehow the new management fad fails to deliver as promised.
The problem is often one of survivorship bias. While it’s fairly easy to find an examples of those who were successful with a particular strategy, the ones who tried it and failed are often overlooked. Other times, a post hoc fallacy is at work. Just because someone implemented a particular strategy doesn’t mean that’s what led to success.
The truth is that a strategy can never be validated backward, only forward. The past is a very imperfect indicator for the future because circumstances are constantly in flux. Technology, competition and customer preferences change all the time, so whenever anybody tells us that they have come up with a sure-fire way to succeed, we need to be skeptical. Continue reading “Don’t Bet On Someone Else’s Success Story”
Amazon is jumping onto the augmented and virtual reality bandwagon with the launch of Sumerian, a new application that’s supposed to help make it easier for people to develop 3D experiences for a wide variety of platforms. Continue reading “Amazon launches Sumerian, a browser-based tool for building AR, VR experiences”
One of the things that startup guru Steve Blank likes to say is that no business plan survives first contact with a customer. What he means that every idea is wrong. Sometimes it’s off by a little and sometimes it’s off by a lot, but it’s always wrong and the sooner we find its flaws the sooner we can start making it work.
This holds true even when an idea is revolutionary, like electricity or the personal computer. There is always a gap between an idea and it’s impact. In fact, on average takes about 30 years to go from an initial discovery to a significant effect on our lives. That means that the “next big thing” is usually about 29 years old!
So there is no lack of fertile ideas, but still most organizations fail to innovate. The problem is not a lack of intelligence or ambition — any enterprise that is able to stay in business for any length of time obviously has both — but that innovating successfully is profoundly different than running operations, which leads managers to make four fatal innovation mistakes.
1. Seeking Only Large Addressable Markets
Every business plan starts with assumptions. You need to estimate costs, sales and growth for years in advance. Obviously, the more favorable your assumptions are, the better your business plan looks and the more likely it is to attract investment, so you want to build a case for high sales, rapid growth and low costs.
Of course, to be earn support, a business plan also needs to look realistic. Costs need to reflect market rates. Revenues need to be based on actual spending trends. There needs to be an analysis rooted in tangible benchmarks, you can’t just pull stuff out of thin air and expect to convince anybody that your plan is viable.
One solution to the problem is to target the largest addressable market you can find. In a multi-billion dollar market, capturing just a few points of market share can seem like a very reasonable assumption and, all of a sudden, your numbers start to work. From a small foothold, you can show years of steady growth.
Unfortunately, the world is not an Excel spreadsheet. No matter how big the market, somebody has to want to buy what you’re selling. So if your product is truly new and different, you need to build for the few, not the many and that means identifying a “hair on fire” use case — a customer who needs your product so badly that they will overlook early glitches.
2. Getting Trapped In Your P&L
The reason that executives feel pressure to identify large addressable markets is that it’s good operational practice. When you want to grow your business, it makes sense to look for more customers. However, there is a fundamental difference between innovation and optimizationthat leaders too often ignore.
When you are working to improve an existing business, you have a lot of information to work with. You already have customers and should have a good understanding of how they use your product or service. So identifying a large swath of new customers that have similar needs is an entirely sensible way to grow.
However, when you seek to create something that’s truly new and different, you have no way of knowing what the demand will be. The truth is that the next big thing always starts looking like nothing at all. So if you limit yourself to only the opportunities that you can quantify, you’re never going to achieve anything more than an incremental improvement.
One thing that I noticed in researching my book Mapping Innovation is that the best innovators always invest in uncertainty. Although they remain disciplined about resources and manage risk effectively, they make sure they are devoting resources to explore new areas with no idea about what the return will be. Ironically, this was the closest thing I found to a sure bet.
3. Failing To Look Beyond Internal Capabilities
A basic tenet of good management is that you want to leverage your capabilities over as large a footprint as possible. For example, once Amazon learned how to sell books online better than anyone else, it leveraged those same capabilities into other product categories and achieved similar success in the expanded markets.
So, not surprisingly, the first thing most companies look for is a proprietary asset or capability they can apply to a new market. That’s generally very sensible, but it’s also very limiting, because it ignores an enormous range of capabilities and assets among customers, partners, vendors and open platforms.
Sun Microsystems Cofounder Bill Joy once famously said, “no matter who you are, most of the smartest people work for someone else.” That’s very true, but it doesn’t go nearly far enough. The best of almost everything resides somewhere else, so by limiting yourself to what you have internally, you’re putting yourself at a real disadvantage.
Competitive advantage is not something you start with, but something you build over time. So focus less on the assets and capabilities you control and more on those you can access. By using the whole innovation ecosystem, you can greatly extend your ability to innovate.
4. Looking For A Great Idea Instead Of A Good Problem
At any given time, there are far more ideas buzzing around an organization than it can pursue. Rapid changes in technology, market trends and consumer behavior only fuel the fire. With everything that’s going on it seems that the potential for innovation is endless and, in a sense, it is. Every year countless new startups are funded and new products are launched.
Most fail. Just because you have an idea doesn’t mean it’s viable or that you can make it work. The truth is that innovation isn’t about idea, it’s about solving problems. The truth is that nobody cares about your ideas, they care about meaningful problems you can solve for them and that’s where you need to focus you energy.
While writing Mapping Innovation, I came across dozens of stories from every conceivable industry and field and it always started with someone who came across a problem they wanted to solve. Sometimes, it happened by chance, but in most cases I found that great innovators were actively looking for problems that interested them.
That’s why the firms that are able to innovate consistently — not one-hit wonders but those who make it happen year after year and decade after decade — have a systematic and disciplined process for identifying new problems. How they do that varies widely, but the core concept remains the same.
So forget about the hype and the myths. It’s the ability to identify and solve important problems that transforms disruption into opportunity.
An earlier version of this article first appeared in Inc.com
“No, it’s not possible. There are a million reasons why we can’t build that feature you want. The tech stack doesn’t support it and it’s just not doable.”
As product managers, we’ve all heard or said this. When an idea comes along, whether it be through marketing, design, product, etc., it’s easy to fall into the trap of saying no and saying why something won’t work. We’re trained to do it: to protect our team’s time, to defend our prioritized roadmaps, and to avoid another headache of scrambling in the weeds. Continue reading “Finding the Parallels Between Improv Comedy and Product Management”
Chester Carlson worked on his idea for years. It was tough, messy work and when his wife tired of the putrid smells, sulfur fires and occasional explosions emanating from the kitchen, his experiments were exiled to a second floor apartment in a house his mother-in-law owned. It took years, but he came finally up with a working prototype. He tried to sell his machine to the great corporations of the day, including GE, RCA and IBM, but to no avail. Eventually, he teamed up with the Haloid Corporation, which eventually changed its name to Xerox and in 1959, more than 20 years after Carlson began his quest, it launched the 914 copier and became one of America’s leading corporations. “Don’t worry about people stealing your ideas,” said the computing pioneer Howard Aiken. “If your ideas are any good, you’ll have to ram them down people’s throats.” The truth is that innovation needs combination and few ideas can make much of an impact alone. So if you want your ideas to amount to anything, you’re usually better off sharing them. Continue reading “Don’t Worry About People Stealing Your Ideas”