In today’s depressed economy, successful corporate innovation isn’t an optional extra.
It may be the one factor that keeps the lights on at your business, while competitors fall by the wayside.
Walking the talk
But while everyone pays lip service to “innovation” very few walk the talk, says Larry Keeley, an innovation strategist and president of Doblin, a consulting firm in Chicago.
Keeley was speaking at the Ontario College of Art and Design Wednesday on The Science of Innovation – a topic he’s very conversant with, having spearheaded innovation programs in several companies since 1979.
He currently teaches innovation strategy at the Institute of Design at Illinois Institute of Technology.
Innovation, said Keeley, has advanced to about the same level of sophistication as medicine had when leeches, liniments and mystery potions were used as state-of-the-art treatments.
This may seem too cynical a view, but Keeley cited the numbers to prove it.
More than 95 per cent of all attempts at creating innovation fail, he noted. Only four per cent of all companies who seek out innovation succeed.
On a positive note, daunting though it may be – successfully creating an innovation strategy gives you a distinct edge in a competitive market.
And there are many other reasons to be optimistic. Though this is one of the worst recessions, said Keeley – who has lived through 11 previous ones – innovation is rising, not declining.
“In every other recession, people have acted defensively and pulled back – but for the first time, the best leaders are looking for a new narrative, a new way to think about transformation.”
Shun irresponsible innovation
But there are hurdles to be overcome before all this eagerness about innovation can produce results, Keeley believes.
For one, corporate innovation initiatives are too arbitrary, he suggested, calling brainstorming “the next carcinogenic.”
Most senior executives, he said, decide to innovate out of the blue, and assign miscellaneous team members to the task of creating a new product or service.
This is done without research or identifying a key problem to be resolved.
Instead of such a haphazard approach, Keeley recommends use of “explicit step-by-step protocols.”
“Don’t tell people to innovate without giving instruction,” he said. “We would never do it in any other profession; I wouldn’t tell someone to defend me in court without studying law first.”
Innovation often starts with diagnostics – using tools to identify human errors of omission. “The hardest thing to pay attention to is errors of omission, but those should be driving new ideas.”
The basis for innovation is finding a problem and fixing it, Keeley said.
“Whether it’s a cell phone or a remote control, identify the functions, features and [work out] a way to improve on them.”
The new strategy should also produce some long-term business benefit, he said, such creating a new brand, identifying new talent, or devising a business plan for the future.
By meticulously examining the root causes for failure, it is now possible to systematically boost innovation success rates to between 37 and 70 per cent, Keeley said.
Steps of innovation
He outlined key steps in a well-structured innovation initiative.
The first step is to abandon restrictive segmentation, he said.
Companies, Keeley said, shouldn’t limit new offerings to a single market or demographic because great products transcend such boundaries.
He cited the iPod, which is now being toted around by teenagers and grandmothers.
Departing from popular cliché, Keeley said companies should learn to think inside the box, rather than outside the box. In other words – they should bring skepticism to a project
The most useful thing a company can do right now is to catalogue the skills of each of its employees, and use that list as Lego building blocks to create a plan for what it’s going to do next.
“This will triple your rate of effectiveness.”
Those spearheading innovation programs should make their messages distinctive, focusing efforts on a common problem that needs fixing, said Keeley.
Recruiting team members with a mind for design, is another pre-requisite for creating an innovative product, according to Christopher Ferguson, partner at Cooler Solutions, a consulting firm in Toronto.
“It’s something that can’t be taught.”
The company’s architecture should support the design team, Ferguson said.
In these tough times, he said, it’s important for a designer to be able to do more with less.
This, he suggested, is possible with focus – “marrying great technology with a very specific need.” All projects should be user-centered, he said.
Platforms vs. products
Keeley urged companies about to launch a new product or service to use analytics after developing prototypes. “A surgeon wouldn’t open your chest without doing x-rays first.”
Rather than just create products – “the least valuable strategy to pursue” –he said innovative firms strive to create platforms.
There are a million different types of mouse traps and toilet brushes on the market, he noted, and none of them are making anyone famous.
Keeley said companies need to be thinking bigger and creating platforms that address a real need – can deliver incredible success and financial gain.
He cited Google and Microsoft Office as examples.
Even “the least valuable B2B platforms are worth more than $10 billion,” he said. “The most innovative ones transcend enterprises, industries and political borders.”
While now may be the perfect time to innovate, Keeley cautions companies thinking along those lines about the innovation paradox – because innovation is more pervasive, it’s also far less profitable.
He said many firms are using technologies and workflows – such as new design tools or processes – which cut costs.
He cited the example of the American animated sitcom – The Simpsons, which was never drawn in the U.S.
Every single frame and show was outsourced to a company in Korea that built the cartoon for a reduced rate using the same tools an American would have selected.
The best way to tackle the design paradox is to pursue innovation before a problem arises, he said.
Think about how you can be improving a product or service before being asked about it.
He urged innovators to constantly interact with other creative minds – sharing ideas, patents and collaborating on the next big platform.
By developing a blog and having employees constantly thinking about how to create a better idea or how to improve current services, a firm can collectively improve the business plan and hopefully get ahead at a time when most companies are barely making ends meet.
