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Innovation Insights by Stephen Shapiro

You attend conferences. You read books. You take training classes. All with the goal of learning strategies from those who have paved the path to success before you.

But what if following in their steps could lead you down the wrong track?

3M talks about its 15 percent rule–a philosophy that allows anyone in the organization to spend 15 percent of their time on something other than the products they are directly tasked to develop. For 3M this is an incredibly powerful strategy. Unfortunately, for many companies that try to replicate this, they often end up wasting 15 percent of their time and money on innovations that add no value.

Why is this?

There are two factors you need to consider whenever you study what someone else is doing:

  1. The underlying context
  2. The undersampling of failure

The Underlying Context

What works for one organization may not work for yours because the context is different.

3M’s culture has decades of experience with its 15 percent rule. There are many unwritten rules that support the concept, enabling it to be a powerful strategy for the company. 3M’s measurements systems are in line with this. Their performance measures enable it. In a nutshell, it is part of their DNA. It is hard to bolt on such a system if you don’t have all of the underlying principles and have it work properly.

There are other forms of context that matter. For example, your business differentiator may impact which practices make sense for your organization. If you look at the insurance industry, although nearly every company is moving heavily into apps and new technology as a differentiator, State Farm has continued to reinforce its personal touch. The company’s advertising rarely talks about technology but rather focuses on its widespread network of agents who are there to help. This has enabled State Farm to gain a lion’s share of the homeowner’s insurance market.

Undersampling of Failure

But there is a more deceptive reason why following someone else’s path to success may lead you in the wrong direction. It is called the “undersampling of failure” (a.k.a. Survivor Bias).

It’s important to recognize that when learning from others, quite often they don’t really know what made them successful. Was a particular “best practice” really the key to their success? The only way to truly know is to find a number of other companies who tried the same strategy. Were most of them successful? Or was the success limited to a small percentage? We see this all of the time. “Hey, this five-step strategy worked for me and it will work for you!” But what if 1,000 other people tried the same approach and failed. Would we ever hear about them? Probably not.

We tend to only study the successes (a.k.a. survivors) and undersample the failures.

Timing can also be a factor. In today’s fast-moving world, studying what someone did last year may be completely irrelevant to what will work today. People teaching you social media strategies may be outdated by the time you hear about them. I’ve had my own business for over 15 years. The approaches that I used in the past to drive my success would be silly in today’s environment.

And in some cases, a first-mover advantage may be the cause. The first people on Twitter had a better chance of making it big than those joining up today. And those who hopped on the Bitcoin bandwagon early on will certainly make more money than those who decide to invest there now.

These concepts are critical for all organizations (and individuals) to understand. We love to learn from others. And we should, because it can speed development times. But remember, replicating is never innovation. In fact, replication without skepticism, can lead to failure.

As I embark on my new column with Inc.com, I start with this article because I feel it sets the tone for everything I write. I will do my best to provide perspectives on how to drive higher levels of ROI with your innovation efforts. But as with any advice, be skeptical. Ask if it is right for you. Ask if it is right for you right now.

Read the original article here on the Inc. website

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