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May 2011A FUTURELAB ACTION GUIDE

So You Want To Be Innovative?Alain Thys

Prelude

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“Chance favours the prepared mind”

So you want to be innovative?

Louis Pasteur

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Let us start with a few questions:

Why do the space shuttle engines have the diameter they have?

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OK, that’s pragmatic, but why is the tunnel that width?

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That makes sense, but who decided on the width of tracks?

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Remarkable, but why choose this base for trams?

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OK, but then why make the axes this wide?

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So if the ruts lead to the cart, what caused the ruts?

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Standardised imperial chariots? Where did Ceasar get that idea?

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OK, but some Egyptian must have had an original idea!

2000 B.C.

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And so we find the answer: it’s all because of a horse’s ass.

2x

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Orthodoxies drive our behaviour

We copy and build on what we know to work

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In fact, it’s in our genes

... behaviour ...

... ways of working ...

... processes ....

... organisational structures ...

HUMANS

COPY

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It is the secret to human success and achievement

Reading and print Industrial progress

Agriculture Apps

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But there is also a dark side

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They can fail us if the world around us changes

Illustration by ~Si2. Print can be purchased at www.deviantart.com

Music industry Education Personal shame (1994/5)

“Browsing is for geeks.”“Blockbuster CD’s rule.” “No cheating.”

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They can be based on wrong assumptions

Earth is flat illustration by ~Si2. Print can be purchased at www.deviantart.com

Our actions have always been driven by

assumptions which everyone knows to be true.

“God does not play dice with

the universe”

Albert Einstein

on Quantum Mechanics

It can happen to the best of us:

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Worst of all, they can close our mind to other options

• We’ve always done it that way

• This is “best practice”

• That’s what everyone does

• Our world-view is right

Part 1: What orthodoxy does to innovation

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Tradition means giving votes to the most obscure of all

classes, our ancestors.


G.K. Chesterton

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What orthodoxy does to innovation.

No, I’m not going to talk about orthodoxy versus creativity

Think out of the box!

Wear a green hat!

Find your inner lightbulb!

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What orthodoxy does to innovation.

I am going to talk about the orthodoxy of innovation itself

Why we make it

harder than it

needs to be?

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Time for an innovation renaissance

Which would be the easiest route to cross this desert?

Through the

valleys?

Over the

mountains?

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Weird, most corporate innovators seem to disagree.

PROCESSED FOOD PHARMA

AIRLINES BANKS COMPUTERS

UTILITIES

Source: The Doblin Group, www.doblin.com

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Why?


Weird, most corporate innovators seem to disagree.

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Industrial revolution

Invention mindset

Better & more features

Lower costs

More volumeMass-production logic


Innovation is driven by industrial mass production orthodoxies

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This worked fine as long as we had room in our life for “more”

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But our world has changed – the tub is full

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Many of our innovation efforts are wasted

Product parity

Hypercompetition

Category overload

Too much choice actually

reduces the preparedness

of customers to make a

purchase.Barry Schwartz

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We consider massive failure as the norm (orthodoxy?)

“50-90% percent of innovation projects [are] judged to have made little or no contribution to

organizational goals” Wikipedia, 2011

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Our response: innovating even more

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Accepting “collateral damage” as it occurs

• Demotivation

• Stress

• Wasted resources

• Lost competitive position

• Complexity

Part 2: Time for an innovation renaissance

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Anything that won't sell, I don't want to invent. Its sale is

proof of utility, and utility is success.

Thomas A. Edison

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How do these guys do it?

The industrialist’s nightmare:

I sell overpriced, underspec’d

computers and people love them.

I take a traditional industry like finance,

travel or telco and slap a red logo on it.

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On innovation, they lead their people through the valleys

Experience innovation

Business model innovation

Service innovation

…

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They have let go of the old world orthodoxies

Better & more features

Lower costs

More volume

“Age of Scarcity”

Innovate for:

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They have recognised we live in a different era

“Age of Abundance”

In mature markets

It’s hard to get double-digit growth

from finding new customers.

It’s much easier to extend the

relationship with the customers

you already have.

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They innovate for relationships

Enough to keep things fresh

and interesting.But not too much.

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Or in business terms

“Age of Abundance”

Innovate for:

Stakeholder Lifetime Value

Better relationships & reputation

Lower costs

A compass for your consideration

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An innovation renaissance

Some remarkably good practices

• Hardware

• Software

• Infrastructure

• Hosting

• Consulting

• Operations

• ...

One more

thing

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A “not so best” practice

Every innovation poses a relationship risk.

Innovate to keep your relationships fresh, but don’t overdo it.

Innovate

for growth

How Planta almost lost me ... and still might.

Risk

relationships

DO DON’T


5 Steps to transform yourself

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A leader is someone who steps back from the entire

system and tries to build a more collaborative, more

innovative system that will work over the long term.

Robert Reich

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Step 1: Listen, Watch and Learn

Obvious? Test yourself:

If you’re in B2C: when was the last

time you really spoke to a consumer?

If you’re in B2B: how actively do you

manage all your stakeholder’s

emotions?

“Shop your own product”.

By walking in customers’

shoes you understand

how they see the world.

Georges-Edouard Dias

SVP, L’Oréal Group

Key Advice

Insights Choice DriversRecommendation triggers

Take the customer perspective ... all the way.

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Step 1: Listen, Watch and Learn

Asset leveraging

Bad profits

Global inspiration

Co-creation

Internal sensing

Market foresight

For most of us

Innovation is not invention.

Most of what you need will

exist in some shape or form.


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Adaptation of The Innovation Radar 2.0 by J.Chen and M.Sawney of Kellogg School of Management, 2008.

The Innovation Radar

There are 12-15

types of innovation.

Which ones are

your competitors

missing?

Step 2: Broaden your innovation horizon5 Steps to transform yourself

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Opportunities for

meaningful

differentiation

Areas to

keep up

or stay ahead

Look at

the niches

Copy when

proven only

High

Low

Low High

Cu

sto

me

r E

ng

ag

em

en

t

Innovation Intensity

Step 2: Broaden your innovation horizon

45.

The Innovation Strategy Matrix

Develop a “portfolio”

of innovation

strategies depending

on the situation.


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Innovation is a social, not a personal achievement. It does not belong in a “department”.

Step 3: Involve your people

• Engagement programmes

• Digital (open) platforms

• Organisational flexibility

• Corporate venturing projects

• Innovation teams

• ...


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Make sure people understand what you aim to achieve

Provide people with the innovation & design knowledge/tools to contribute

Build an innovation movement that rewards initiative rather than ask for instant ROI

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* Based on Norton, D. Aligning your Strategy to the Customer Value Proposition, 13/9/2005.

Only 5% of your workforce

understands your strategy*

Step 3: Involve your people

So how can they innovate upon it?


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Step 4: Make sure you got it “right”

“Failing fast” is no

excuse for being

sloppy.

Implement a simple system that allows people to evaluate their

own ideas and forces cross-functional co-operation.




Step 4: Make sure you got it “right”

Simplify, so your business is able to execute. Then simplify again.

The Laws of SimplicityJohn Maeda

1. Reduce

2. Organise

3. Time

4. Learn

5. Differences

6. Context

7. Emotion

8. Trust

9. Failure

10. The One

Food for thought:

Can you “appify”

your business?

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Step 5: Go to market to enhance relationships

How do your

innovations strengthen

your existing customer

relationships?

The experience IS

the product.

Peter Merholz

Experience

Delight

Loyalty

Profit

Racing to market is no excuse for being sloppy.

Align your business as if it were the only innovation

you’ll ever launch.

Conclusion

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Finally, in conclusion, let me just say this.


Peter Sellers


CONCLUSION

Break innovation’s orthodoxies.

STEP 1

Listen, watch and learn.

STEP 2

Broaden your innovation horizon.

STEP 3

Involve your people.

STEP 4

Make sure you got it “right”.

STEP 5

: Go to market to enhance existing relationships.

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Conclusion

Focus on the valleys that lead to customer success

You can innovate less

Because no one is there, you

make your life easier.

Innovations have more meaning

With the same effort you can

differentiate yourself more.

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Conclusion

In Summary

But with More meaning.Innovate Less

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Alain Thys

Email: [email protected]

Twitter: @FLB_alainthys