The Truth About Innovation No One Wants You to Know
If you heard it once, you heard it a thousand times:
- Big companies can’t innovate
- We need to innovate before we get too big and slow
- Startups are innovative. Big companies are dinosaurs. They can’t innovate.
And yet you persevere because you know the truth:
Big companies CAN innovate.
They CHOOSE not to.
Using Innovation to drive growth is a choice.
Just like choosing to grow through acquisition or expansion into new markets is a choice.
All those choices are complex, uncertain, and risky. In fact:
- 70 – 95% of innovations fail
- 70 – 90% of acquisitions fail
- ~80% of market entry efforts fail
Hold on. The odds of failure are the same!
All three growth drivers have similar failure rates, but no one says, “Big companies can’t acquire things” or “Big companies can’t expand into new markets.”
We expect big companies to engage in acquisitions and market expansion.
Failed acquisitions and market expansions prove us (or at least our expectations) wrong. Because we don’t like being wrong, we study our failures so that we can change, improve, and increase our odds of success next time.
We expect big companies to fail at innovation.
In this case, failure proves us right. We love being right, so we shrug and say, “Big companies can’t innovate.”
We let big companies off the hook.
Why are our expectations so different?
Since the dawn of commerce, businesses engaged in innovation, acquisitions, and market expansion. But innovation is different from M&A and market expansion in three fundamental ways:
- Innovation is “new” – Even though businesses have engaged in innovation, acquisitions, and market expansion since the very earliest days of commerce, innovation only recently became a topic worthy of discussion, study, and investment. In fact, it wasn’t until the 1960s that Innovation was recognized as worthy of research and deliberate investment.
- Innovation starts small – Unlike acquisitions and new markets that can be easily sized and forecasted, in the early days of an innovation, it’s hard to know how big it could be.
- Innovation takes time – Innovation doesn’t come with a predictable launch date. Even its possible launch date is usually 3 to 5 years away, unlike acquisition closing dates that are often within a year.
What can we do about this?
We can’t change what innovation is (new, small, and slow at the start), but we can change our expectations.
Finish the sentence – “Big companies can’t innovate” absolves companies of the responsibility to make a good-faith effort to try to innovate by making their struggles an unavoidable consequence of their size. But it’s not inevitable, and continuing the sentence proves it. Saying “Big companies can’t innovate because…” forces people to acknowledge the root causes of companies’ innovation struggles. In many ways, this was the great A-HA! of The Innovator’s Dilemma: Big companies can’t innovate because their focus on providing better (and more expensive) solutions to their best customers results in them ceding the low-end of the market and non-consumers to other companies.
Be honest – Once you’ve identified the root cause, you can choose to do something different (and get different results) or do everything the same (and get the same results). If you choose to keep doing the same things in the same ways, that’s fine. Own the decision.
Change your choice. Change your expectations – If you do choose to do things differently, address the root causes, and resolve the barriers, then walk the talk. Stop expecting innovation to fail and start expecting it to be as successful as your acquisition and market expansion efforts. Stop investing two people and $10 in innovation and start investing the same quantity and quality of resources as you invest and other growth efforts.
The first step in change is admitting that change is needed. When we accept that “big companies can’t innovate” simply because they’re big, we absolve them of their responsibility to follow through on proclamations and strategies about the importance of innovation as a strategic driver of growth.
It’s time to acknowledge that innovation (or lack thereof) is a choice and expect companies to own that choice and act and invest accordingly.
After all, would it be great to stop persevering and start innovating?
Explaining Innovation
5 ways to Build Your Innovation Muscles in the New Year
According to a 2018 survey by NPR and The Marist Poll, the most common New Year’s resolution is to exercise more. Not surprisingly, losing weight and eating a more healthy diet ranked third and further, respectively (“stop smoking” was #2, in case you’re curious).
Hitting the gym to drop weight and build muscle is a great habit to build, but don’t forget about the regular work needed to build other muscles.
Specifically, your innovation muscles.
Innovation mindsets, skills, and behaviors can be learned but if you don’t continuously use them, like muscles, they can weaken and atrophy. That’s why it’s important to create opportunities to flex them.
One of the tools I use with clients who are committed to building innovation as a capability, rather than scheduling it as an event, is QMWD – the Quarterly-Monthly-Weekly-Daily practices required to build and sustain innovation as a habit.
QUARTERLY
Leave the office and talk to at least 3 of your customers
It’s tempting to rely on survey results, research reports, and listening in on customer service calls as a means to understand what your customers truly think and feel. But there’s incredible (and unintended) bias in those results.
Take, for example, this story from former P&G CEO AG Lafley:
One very quick story; I will never forget this. We used to do annual research in the laundry detergent business, and every year consumers would rate the Tide powder cardboard package as excellent; excellent to shop; excellent for opening; excellent in use–on, on, on.
So, probably 27 or 30 years ago, I’m in basements in Tennessee, in Kentucky, doing loads of laundry with women, and after three or four or five of these one-on-one sessions, I’ve realized that not a single woman has opened a box of Tide with her hand. Why not? You’ll break your fingernails!
So, how did they open the box? They had nail files; they had screwdrivers; they had all kinds of things sitting down on the shelf over their washing machine, and yet they thought our package was excellent. And we thought our package was excellent because they were telling us our package was excellent. We had to see it and experience it.
Here’s the problem–consumers cannot really tell us what they want. They can tell you why they like it or why they don’t like it, but they cannot tell you what they want.
Schedule a day each quarter to get out of the office and meet your customers. Ask them what they like and what they don’t. More importantly, watch them use your products and then share what you heard and saw with your colleagues.
MONTHLY
Share with your team a mistake you made and what you learned from it
Silicon Valley mantras like “fail fast” and “fail often” make for great office décor but, let’s be honest, no one likes to fail and very few companies reward it.
Instead of repeating these slogans, reframe them to “learn fast and learn often” and role model the behavior by sharing what you learned from things you did that didn’t go as expected. You’ll build a culture of psychological safety, make smart risks acceptable, and increase your team’s resilience. All things required to innovate in a sustainable, repeatable, and predictable manner.
Do 1 thing just for the fun of it.
In the research that fed into their book, The Innovator’s DNA, professors Jeff Dyer, Hal Gregersen, and Clayton Christensen, found that the most common characteristic amongst the great innovators of our time was their ability to associate – “to make surprising connections across areas of knowledge, industries, even geographies” (page 41). Importantly, their associative thinking skills were fed by one or more “Discovery Skills” – questioning (asking “why,” “why not,” and “what if”), observing, experimenting, and networking.
Fuel your associative thinking ability by doing something NOT related to your job or other obligations. Do something simply because it interests you. You might be surprised where it takes you. After all, Steve Jobs studied calligraphy, meditation, and car design and used all of those experiences in his “day job.”
WEEKLY
Make 1 small change for 1 day
Innovation requires change and, if you’re an innovator, that’s the exciting part. But most people struggle with change, a fact that can be frustrating for change agents.
In order to lead people through change, you need to empathize with them and their struggles which is why you need to create regular moments of change in your work and life. One day each week, make a conscious change – sit on the other side of the conference room table, take a different route to the bathroom, use a black pen instead of a blue one. Even small changes like this can be a bit annoying and they’ll remind you that change isn’t always the fun adventure you think it is.
DAILY
Ask “How can we do this better?”
Innovation is something different that creates value. Which is good news because that means that all it takes to be an Innovator is to DO something DIFFERENT and create VALUE. The easiest way to do that is to find opportunities for improvement.
The next time you’re frustrated with or confused by a process, ask “how can we do this better?” Better can be more simply, faster, cheaper, or even in a way that is more enjoyable but, whatever it means, the answer will point the way to creating value for you, your team, and maybe even your company.
In closing…
Block time on your calendar for these quarterly, monthly, weekly, and daily habits. After all, the best reflection of your priorities are the things in your calendar. And, if you stick with this, you’ll be among the 8% who achieve their New Year’s goals.
Originally published on December 5, 2019 on Forbes.com
How to Get Corporate Executives to Walk Their Innovation Talk
Things we know we should do because they’re good for us:
- Eat 5 servings of fruits and vegetables each day
- Floss twice a day
- Get 10,000 steps a day
- Buy insurance
- Consistently invest in innovation
Let’s be honest, the above list could also be titled, “Things we know we should do but don’t.”
Why? Why do we choose not to do things that years of research prove are good for us and for which solutions are readily available?
Because they’re inconvenient, uncomfortable, expensive, and, most of all, because we have not yet been burned by not doing them.
Experience is a better motivator of change and driver of behavior than knowledge. We don’t floss until we’ve had one (or more) painful and bloody dentist appointments. We don’t buy insurance until we have to deal with a break-in. We don’t invest in innovation until we’re desperate for revenue, profit, or growth.
The good news is that, at least when it comes to innovation, we don’t have to wait to be desperate or to get burned before we do what we know we should. We can create experiences that motivate change.
Borrow relevant experiences
Experiencing success, even if it’s vicariously, is key to getting people to do what they know they should. One way to do this is to find proof that the change is possible and do-able. To do this you need to find relevant and recent examples (i.e. not a field trip to Silicon Valley and not stories about Steve Jobs).
Find a company in your industry (or a similar one) that has successfully achieved the goal you’ve set. Tell their story to people within your organization. Set-up a conversation between a current or former member of their team and a key stakeholder in your organization. Buy their product and display it as evidence that success is possible.
Create experiences of success
Innovation takes time, especially if you’re working on something breakthrough. But people lose interest and faith quickly, especially in organizations that are judged by quarterly numbers. As a result, the worst thing you can do is to go into “stealth mode” and try to “fly under the radar” until you have a huge, earth-shattering success to announce.
Instead, spend time learning about your decision-makers’ and stakeholders’ doubts at the same time you’re learning about your customers’ problems. Then, when you prove those doubts wrong, celebrate the win…politely, and publicly.
Does your boss think Legal will never approve your idea? Work with Legal, ask them what it would take to get an approval, and when you do that and get the Yes, tell your boss. Does Finance think no one will ever pay the price for your solution? Open a “lemonade stand” to sell the product and then take Finance out for drinks, using your first dollars of revenue to pay for the first round.
Small and steady wins give people experience with success and buy you the time, resources, and support you need to achieve the earth-shattering ones.
Immerse everyone in the experience
While borrowing and creating experiences can be powerful, nothing is as convincing or compelling as actively engaging people in achieving success.
Involve innovation leaders, decision-makers, and key stakeholders in the hard work of customer discovery, solution design, and business testing. Make them listen in live to customer interviews, hand them the sharpie (or the mouse) during ideation sessions, and “hire” them to staff your “lemonade stand.”
By making people lean in, roll up their sleeves and do the work, they’ll experience how hard innovation is and why it takes longer than they think. They’ll be invested in your work and your results. They’ll feel the rush of the small successes.
Innovation is a Head, Heart, Guts endeavor
People decide what to do with their hearts, justify their decisions with their heads, but it takes guts to take action. Knowledge feeds the head, but it takes experience to have guts.