How not to fail with innovation — a 10 point guide
Innovation , as far as I can tell, falls into 2 categories: Your Stuff & The new Stuff..
Innovation , as far as I can tell, falls into 2 categories:
- Your Stuff (your existing products & services) that you should be incrementally improving within the next 1–2 years — with the help of innovative new ideas & improvements. And…
- …the New Stuff you should be looking at building. Completely NEW PRODUCTS AND SERVICES BANG CRASH WALLOP that are outside of your core business and outside of your comfort zone.
Simple enough? But if innovation is so simple, why is it so hard to mobilise a large company into a culture of innovation?
At Humblebee we’ve helped companies build (digital) products and services via their own”innovation labs” and in shorter-term innovation teams of all shapes and sizes. This article is some learnings and ideas gathered along the way…
Who might you be?
OK I’m going to guess you’re working for a medium to large company, and you have a core business / service that’s served you well for 15, 30, maybe even 50 plus years. That core business has to expand or change. You’ve been tasked with driving that innovation. It’s the most important job at the organisation. Sound about right? If not, this article is probably not for you… If yes, take a cup of tea and listen to my rant about how to build genuine successful innovation projects at your organisation.
Innovation mostly fails. It doesn’t need to.
If you look around the current business landscape here in Sweden (and beyond) it’s impossible to go more than 7 minutes without hearing about Company X’s Innovation Lab. Or Innovation Greenhouse by Company Y. Or Innovation Brand Garages powered by design thinking. Innovation Hub with Lean Agile Methodology Thought Leaders etc etc.
I understand. Innovation should be cool, yeh?? Put all the crazies in a quarantined room with post-it notes, string, lego men and nerf balls, ’cause HEY WOW YEH! Innovation has to be playful, right? Put some people in a special lab or unit, separated from the rest of the enterprise and let them believe “there’s no such thing as a bad idea!”. Damn right there is! There are plenty of bad ideas. Avoid them! They waste time & money.
The problem with the above secluded techniques for innovation lab building is that — 95% of the time — they do not lead to better outcomes.
Russell’s 10 Point Guide for those at Big Company X who need to drive innovation
1. What’s innovation?
My favourite definition is: innovation is the creation of a viable new offering. Oh my God that’s so good! I need to highlight it. Big respect to Doblin for this definition.
(1) Innovation is the creation of a (2) viable (3) new (4) offering.
In the words of MC Hammer… break it down >>
(1) Innovation = doesn’t have to be a new invention.
(2) Viable = the innovation projects need to earn their keep! They need to sustain themselves and return the costs of capital. Fair enough parameters I believe.
(3) New = there is very little genuinely new innovation. Most innovations are based on previous advances.
(4) Offering = think beyond products. Think beyond your core business. Look for the new ways of doing business and making money. Business Designing in other words.
2. What kind of innovation does my company need?
Eh? How should I know? All companies are different. You need an innovation strategy. Just like you have a business strategy, you need to create an innovation strategy. Keep it to 1 page though please… I know you love ‘dem thick Powerpoints, but resist the temptation!
The kind of innovation projects you’ll need are dependent on whether you’re a market leader, a medium-large business; what other companies are doing in your industry; and about 100 other parameters…
3. OK. So how do I make an innovation strategy?
It’s just a commitment to get alignment among all the diverse groups within your organisation. To get those objectives and priorities agreed. You’re used to doing this for marketing, operations, finance etc… so what’s stopping you? You look smart. Kind of. You’ve done a business strategy before, just do an innovation strategy! :) Or pling me, maybe I can help.
4. What happens after my strategy is in place? Who does what?
Well, you need buy-in from the bosses. Probably at the same time you create a strategy. I mean the boss of all bosses. Top people. Making an innovation strategy is a leadership challenge. The most senior leaders in your organisation need to be involved because innovation touches pretty much every sphere of your company… or at least it should.
“Changing the culture of an organisation is like trying to hug a cloud. You can see and feel it, but it’s hard to get a grip on”
5. What kind of team should I put together?
Innovation is a team game. It’s not the domain of a chosen few geniuses or eclectics. Everyone can, and should, become better at innovating. Make sure your innovation team is cross-functional (get representatives from different business units and disciplines). The aim is to wire innovation into your organisation!
That said, if this is your first attempt at innovation enterprise-wide, ensure the team members are cut from an innovative, entrepreneurial cloth and are high-potential employees. No douchebags. We all know who they are.
Get an internal team and external support as plug-ins.
To summarise, your team should look like this:
- Cross-functional representatives from your company (engineers, tech experts, researchers, the lot!).
- External plug-in support people. I’m obviously biased, but I’d fire in a few growth hackers, business designers and service designers from Humblebee (or similar company, if you can find one. You won’t be able to though). Let them bring out the best in your existing team, and ensure your initiatives stay on target.
The effect of having more than just your fellow employees in an innovation team, rather a whole Motley Crue of resources (e.g. the best data scientist from Company X, the best Service Designer from Company Y, the best Business Designer from Company Z etc) should naturally deliver a more powerful punch.
6. Your employees need elevated to leadership roles
You’ll have to empower the above mentioned high-performing “entreprenees” (entrepreneur + employee) at your company with leadership roles, a mandate and accountability for being the force behind your first innovation team. This is good on many levels. The best entreprenees will likely only be at your company for another year or two at most… so make the most of them before they leave, start their own business and begin (metaphorically) stabbing your business model to death with a smaller, better version of your business! Empowering them may even see them stick around at your company for a little longer.
7. How much will this innovation effort cost me?
You mean what proportion of resources should be invested in what type of innovation? Who knows! That will be specific to every single company. I’d say take a long hard look at your industry on a macro level; how any core-tech is evolving; what your internal strengths are; what your risk tolerance is; what are the consequences of NOT innovating…
8. Will this innovation initiative make me money?
Whatever the outcome of your innovation project, it has to get your customers (new or existing) to give you more money, or allow them to save money… or some kind of other tangible benefit, or your innovation project is not creating value. These are the facts. Hark back to the Point 1 (the definition of innovation by Doblin) where all innovation projects need to be viable… they should earn their keep.
9. You never answered my question Russell…
Yes yes yes, I know! It’s like any other initiative though, you need the right people tackling the right problems to increase the chance of success. If I was you I’d nail your innovation strategy, make a start on putting a team together (with a smattering of external growth innovator dudes to drive things along and provide the external viewpoints) and then I’d prioritise between:
- Shorter-term core innovation projects: These are probably closest to your core-business and easiest to grasp, and nearest to monetize in the shortest possible time.
- Bigger challenge “adjacent” innovation projects: These are tackling bigger problems and bolder issues than the shorter-term core innovation projects. Riskier, and you’re definitely moving out the comfort zone of your nice safe core business…
- Game Changer innovation projects: These don’t happen very often. They require the most thought, the most time, the most commitment and, weirdly, can result in the highest return. Nice for your company to have one or two of these up your sleeve in case you need to suddenly move into offensive mode. You can contact me for help here, I can be very offensive.
So to answer your question. You can monetize on all three options, but you’ll most likely see your ROI quicker with option 1.
10. How can we make sure it’s not a one-team-wonder in one city? How can we roll it out across the whole company?
That’s a good question. The above “lazy dog” guide is really for folk getting started from scratch. If you’re already up and running then make sure you have a system of visible reward for the innovation projects / innovation team.
By this I mean make sure your innovation team are being recognised across your entire company, whether that’s via your intranet, internal mail, Slack, at the breakfast meetings, whatever! Just make sure they get airplay.
The idea behind this is to encourage cross-company learning and promotion of the ‘entrepreneurial’ ventures going on within the “family” of your entire corporation.
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Anyhoo, I wish you luck. There are business graveyards littered with abandoned innovation teams and projects… don’t let yours join them! Here at Humblebee we’ve managed to help innovation teams build up their strategy, structure and of course roll-out products and incredible new services.
If you’ve read this far then you really are a lovely person. Don’t hesitate to reach out if you want to know more or hook up for a further dialogue.
// Russell Clark is a Product Manager and partner at Humblebee — a digital product & service design agency in Gothenburg, Sweden. //