I recently posted my 6-minute animation video that explains my innovation philosophy. If you prefer it in written form, here it is…Enjoy!
Innovation. You know it is essential for long-term growth. You are clear that it’s the key to beating the competition. And… you avoid it like the plague.
Why? There are MANY reasons organizational antibodies are killing off innovation. Topping the list… not enough time. As it is, you’re stressed out, overwhelmed and frustrated with what you already have on your plate. You think innovation takes too long and rarely generates the expected results.
If you are like most companies I work with, you also struggle to address your customer’s needs. You shoot BLINDLY at a target, MISSING the mark altogether, WASTING precious time, money, and resources. It’s no surprise that innovation has a bad reputation.
But it doesn’t have to be this way. Unfortunately, there are so many misconceptions surrounding innovation and so much bad advice being given. The truth is, innovation can be done quickly, and with low risk and high returns.
And innovate you must! When the pace of change outside your organization is faster than the pace within, you will be out of business. Entire industries are seeing widespread commoditization where companies are competing SOLELY on price. In others, new entrants are disrupting the long-standing players. Change is the only constant.
I am here to put an end to the sea of bad advice and help you stay one step (or maybe even 10) ahead of your competition. After 20 years of working with dozens of Fortune 100 companies, I’ve discovered THE three simple steps that will increase your Innovation ROI, not just incrementally, but TENFOLD over traditional methods… three simple steps that can be the difference between success and failure.
[Differentiation] To begin with, most companies dilute their innovation investments by trying to improve EVERY aspect of their business. However, you can’t be the best at everything. Therefore, the first step in increasing your Innovation ROI is to determine what makes your organization unique, and focus your energies there. In other words, INNOVATE where you DIFFERENTIATE.
The concept of differentiation is difficult. Few companies understand it. And getting it wrong can mean disaster. The $2.5 billion dollar Revel Casino in Atlantic City was indeed different. It was extraordinarily high-end and classy. Unfortunately, Atlantic City is neither, and the casino closed its doors 2 years after opening. It is important to note that being different is NOT the same as being differentiated. Your customers must value your differentiation. One company that gets it right is USAA, offering financial services ONLY to military members. By focusing on making the lives of their customers easier, they retain 98% of them annually with 95% saying they will never leave. This is unheard of in the insurance industry. Innovate where you differentiate. FOCUS your energies. DISTINGUISH your organization and deliver what is TRULY VALUED by the market.[Framing] Now that your differentiator is clearly defined, you take the second step for improving your innovation ROI: Asking Better Questions. Unfortunately most companies are obtaining useless or even damaging answers to their problems because they don’t even realize they are asking the wrong questions to begin with. Progress with 1989 Exxon Valdez oil spill cleanup was slow because the icy temperatures apparently froze the oil/water mixture as it was extracted. However, two decades later, scientists discovered that temperature was not the problem. They realized that the Molecule Seizing was caused by a common fluid dynamics issue called VISCOUS SHEARING. Solving THIS problem led to a quick solution.
An airport with a notoriously slow baggage claim process innovated on how to speed up the bags. This questioning led to complex and expensive solutions. They found success when instead they looked for ways to slow down the passengers so that their bags were waiting when they arrived at the carrousel.
Not only are we asking the WRONG questions but we are compounding the problem when organizations tell their people to think outside the box when generating solutions. This is terrible advice as it reduces the QUALITY of solutions while increasing the NUMBER of bad ideas. We saw this with the 2010 Deepwater Horizon oil spill cleanup, when scientists asked concerned citizens for their out-of-the-box ideas on how to stop the flow of the oil. Although they received over 123,000 submissions, almost none were useful, costing valuable time and money.
Thinking outside the box is not the solution. Instead, find a better box. Ask a different and potentially better question. Or, as Einstein reputedly said, “If I had an hour to save the world, I would spend 59 minutes defining the problem, and one minute finding solutions.” The reality is, most organizations are spending 60 minutes solving problems that DON’T MATTER.[Breakthroughs] Now it is time for finding solutions – the third step. And who you ask for those solutions can make all the difference. From my experience, expertise is the enemy of innovation. Solutions developed by experts are typically incremental and build on the past. Breakthroughs require a fundamentally different perspective.
A whitening toothpaste was created using a blue dye similar to what is found in laundry detergent to make white clothes whiter. A computer chip company eliminated bubbles from the manufacturing process by studying the way champagne is made. Car companies now reduce road noise, not through more insulation, but by using the same technologies used in noise cancellation headphones.
Science proves that the HIGHEST VALUE solutions are typically not derived from people cut from the same cloth, but rather when people from DIFFERENT areas of expertise bring together divergent points of view.[Summary] With all this being said, you know innovation is VITAL for your business’s continued success. And despite your reservations, it doesn’t have to be expensive, difficult, or stressful. It takes just three simple steps. DIFFERENTIATION – this doesn’t just mean making yourself different for its own sake. Focus your energies on what makes your business unique. FRAMING – Before looking outside the box for solutions… consider whether or not you actually need a completely different box. And BREAKTHROUGHS – Gather together people with different points of view and levels of expertise. These tools apply to any business, at any time, in any industry. Just three simple steps. [Last Words] Change is going to happen, whether you like it or not. By harnessing innovation effectively, you can make sure the change is beneficial.