One of the common mistakes in understanding innovation is the notion that innovation comes whenever it is ready. The belief that innovation requires this stroke of lightening that brings those amazing, earth shattering ideas. People believe that the essence of innovation is inspiration − an “accidental occurrence” that provides the recipient with a bright new idea not yet known to the world. But accidents are rare and very difficult to anticipate. Lightening strikes when it is ready, not where and when we want it to.
This line of thinking is risky. It assumes that the company’s fate is dependent on outside forces that behave in an irrational way. This is not a way to run a business. Luck is not a business strategy. Long term survival and success cannot be based on an arbitrary stroke of lightening. Companies need to plan for innovation just like they plan for success. The two are interwoven. Innovation has to be a product of ongoing well defined processes that capture and evaluate innovation regularly and not occasionally. It should not wait for the innovation to arrive arbitrarily, but rather plan for regular periodical meetings that will discuss innovation, market trends competitive landscape, new technology availability and changes in customer preferences and trends in order to create fruitful soil for innovative thinking. By creating innovation by design rather than by luck, we shift to a more predictable system in which, after establishing it, the risk of arbitrary innovation is eliminated. It is about taking control of the innovation process and leading it rather than being lead by it. Innovation by design is about instituting a system, a mechanism that captures and evaluates innovative ideas regularly. It is an integral part of the business operation and is not left to arbitrary availability.
Customer Driven Innovation
Another popular innovation perception is that innovation comes from listening to customers. Although customers can assist in improving the products, their input can hardly be described as innovation. Customers often drive incremental innovation that results in the continuous improvement of products. The business impact due to those incremental changes is proportionally related to the actual innovation; it is also incremental and cannot be sustained for the long run. If Sony Corporation would have listened to their customers, the Walkman would have never been invented. 25 years after making the courageous decision of not listening to their customers, they turned this small device into a huge growth engine with over 300 million walkmans manufactured to date. So is this an argument to stop listening to customers? No it is not. There are two key elements to innovation, the Now and the Wow. Companies must manage both and retain a delicate balance. Focusing too much on a Wow will leave the door open for competitors to refine their raw innovations and steal the market. Focusing on the Now and incrementally moving current products forward, will distract their attention from the need for the next big thing that will impact their business beyond the 10% growth. As argued by Christian Clayton in his book “The Innovators Dilemma”, it is exactly that success and focus on customers that can result in missing major market trends and business opportunities.
So while customers are important for incremental innovation, order of magnitude innovation largely relies on the company’s own initiative. Companies can not and should not wait for their customers to tell them what to do. Their innovation responsibility is much greater. This innovation will come through the collected information and accumulated experience of the company as well as its users who are participants in the information and experience creation. The need for information based innovation becomes more crucial and requires greater attention to the management of information in the innovation process. Successful companies are designing the innovation process including innovation discipline and innovation management to ensure that they are not subject to luck. Luck is not a defendable business strategy. Expecting luck is one of the greatest risks a company can take. Taking charge of innovation as a way to add value to customers is a critical competitive advantage that must be nurtured and managed regularly. Leave luck for your Last Vegas trips.
Adapted from Lior Arussy’s new book Innovating IT – Transforming IT from Cost Crunchers to Growth Drivers (John Wiley & Sons, December 2004) Available exclusively at http://www.amazon.com/innovatingIT