Innovation illusion? - learning from entrepreneurs

A lot of times people do not know what they want until you show it to them – Steve Jobs
Comparing what people say they want with what they actually need creates curious anomalies. In a recent survey of UK CEOs[1]; the biggest challenge to growth were cited as “building customer relationships”.  Innovation was bottom of the list.  Yet if we define innovation as “finding new or better ways to serve customers’ needs” and in the same report, CEOs define customer relationships as ‘sharper understanding of customer needs’ and ‘better products’.  Then what they really need is innovation.  So why is it such a low priority?

Why do we need innovation yet do not want it?
5 big misconceptions might be putting people off innovatio.  Perhaps they regard it as illusion, overhyped or just too hard.   Yet every day entrepreneurs spot opportunities where there are unmet needs, they are unmet because few really innovate with any rigour.  So what insights can we glean from an entrepreneurial mindset?

Innovation is risky?

The best way to predict the future is to invent it – Alan Kay
Our perception of risk is heavily shaped by what we realise that we do not know.  So any process where the end result is opaque seems risky.  But surely the elephant in the room is the disruptive innovation that turns our whole market upside down - is it really less of a risk just because we cannot see it coming?  Yet customers needs change slowly; if we know their aspirations and what frustrates their daily routine, then there should be no surprises from left field unless of course we fail to act on our insight.  We come back to that one later because it is more common than you might imagine.  The riskiest practicecan be to seek insight from competitors rather than customers.

Innovation is too creative and not pragmatic?

Creativity is thinking up new things – innovation is doing new things – Ted Levitt
One of the frustrations of off-site workshops and training is all the energy and creativity that stays off-site, left on the flipcharts and whiteboards that never see action.  We do not need “blue sky thinking” for pragmatic innovation.  It is much more about an evidence-based problem solving process, which digs deep for customer insight and then applies unconstrained thinking to the solution. Often the best solution is already working well in a different context.  Borrow with pride rather than trying to come up with something completely new, untested and with the risk of unintended consequences.  Entrepreneurs steer clear of bleeding edge technology for good reason.

You cannot teach Innovation?

Innovation is the ability to turn ideas into invoices – L Duncan
Following on from above, the other reason off-site sessions rarely work is that they lack real workplace context.  At best they are abstract and theoretical, but at worst plain inappropriate.  It is much better to get practice using  real customer opportunities and learn from what works and what doesn’t - that’s how entrepreneurs do it.  An experienced facilitator guiding a team through a disciplined process tailored to their need is far more effective at transferring skills and changing behaviour - 4 times according to research - than a theoretical approach.  That is on top of the benefits of the help provided with the customer problem.

Too much innovation fails?

Discovery is the journey; insight is the destination – Gary Hamel
Product flops stem from an inadequate innovation process.  New products fail because customers do not want them or do not ‘get’ the benefits.  This is the big danger of push rather than pull marketing.  Entrepreneurs use pull marketing – they design products around the deep insight garnered from their target customers.  Traditional product marketing is more push, where customer needs are gained from market research (which lacks real insight) and the real effort goes into selling the products once finished.  Entrepreneurs know that their first concepts will not be right, but with little invested in development, getting it wrong is not a failure, more an opportunity to make what they have better.  The real failure comes from learning too late in the process.

Innovation is not in our organization’s culture?

It is about the people you have, how you’re led and how much you get it Steve Jobs
Whilst we might intellectually agree with the 4 previous points, if our teams are just not set up to do it then it is all rather academic.  It is stark that the Parliamentary Commission addressing management issues is asking whether British “Management is short sighted short termists or long-term growth visionaries?” Many are a lot happier with the certainty of management accounts and KPI dashboards than the uncertainty of future growth; not helped by the short-term horizons of many stakeholders. 

It takes both a different leadership mind-set and a different front-line skill-set to innovate well, but the capability can be developed with the right approach and success in one project quickly spreads elsewhere.  But we tend to overlook Leadership.  The skills to manage a task to perfection are very different from those that set a growth vision and empower the front line to deliver it.  In another survey of 750 UK Leaders 1/3 acknowledged that they were ineffective at decentralizing decisions and ¼ at creating agile teams.  We could double those figures if we include managers who simply do not get it.  Critical self-awareness is a good start, but it takes action to enable change.  Fortunately skills development is much more evidence based now and the habits of effective entrepreneurs are well documented.  The capability can be transferred if wanted.

Effective Innovation is simple, but that is not the same as easy.

You could be forgiven for thinking that the previous section is a bit glib and trivializes the issues.  Of course brevity forces simplicity and there is easily a chapter on each of the 5 factors – several on the last one, but the principles really are quite simple.  That said, to be successful is not easy.  You need 3Ps.  Passion – you really have to want to do this; Precision – you need to follow the process properly and not cut corners; and Perseverance – customer insight for anything other than incremental innovation is hard to win.  After all, how can customers want what they do not even know exists, but for sure they know the outcome they need and it is in that gap that the best opportunities for innovation and partnering lie.

[1] CMI The UK CEO Challenge - July 2013

Banner image © Mark Neild 2013  Dolphin in Bay of islands New Zealand taken shortly before we went swimming with them.