Grow Your Business: Keys to Innovation
Dan Arens is an Indiana-based business growth advisor.
Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowQ-Tips, Cellophane straws and disposable razors all have one thing in common. While the concept of innovation has always existed, there is someone who is credited with creating all of those items.
An individual. "Innovation has never come through bureaucracy and hierarchy. It’s always come from individuals." said John Scully, a former chairman of Apple. To add fuel to the fire, Economist Burton Klein examined fifty major innovations developed in America over the last several decades. He discovered none of the innovations came from a company that was an industry leader at the time of the innovation.
When it comes to the innovation personality, we need to be on the lookout for it. Clayton Christensen, the noted author and Harvard professor has made an attempt at describing the personality of an innovator. In an article for the Harvard Business School, Christensen went on to say "innovators are good at associational thinking…They make connections between seemingly unrelated problems and ideas and synthesize new ideas." In other words, innovators are able to “connect the dots”, whether they are related or not. Innovators see in areas and in relationships where others do not see anything.
Henry Ford is credited with saying “Necessity is the mother of invention.“ While Ford did not really invent anything, he did find many ways to innovate. In his book Creating Innovators: The Making of Young People Who Will Change the World, author Tony Wagner is a firm believer in disruptive innovation. He goes on to say “Innovation occurs in every aspect of human endeavor, most people can become more creative and innovative-given the right environment and opportunities.” The key then becomes having the right individual or group of individuals that can create opportunities with a successful framework.
Noted author Melissa Schilling suggests that by taking a look at the historical aspects of a particular industry, a firm should be able to predict what can happen in the future. In an article for the Harvard Business Review, she presents a new approach for the innovation process. Her key point relates to understanding your particular industry from a technological perspective and being able to extrapolate the products or services your customers will be buying in the future. Those key points are much easier said than done, however, Schilling does suggest a framework of three steps to help narrow the scope of the next great innovation.
Identify key dimensions in your industry. In order to identify the dimensions, you must be familiar with the history of the industry. As Schilling says, "For example, computers became faster and smaller in tandem; speed was one dimension, size another. Developments in any dimension come with specific costs and benefits and have measurable and changing utility for customers."
Locate your position. The author suggests you need to develop and determine where current industry innovations are on a utility curve. Then plot the dimensions you determined in the first step on that utility curve. Schilling sites a perfect example with regard to speed and automobiles. She points out “The first cars were too slow to be very useful. As they became faster and roads improved, consumers valued ever-greater top speeds- up to about 90 miles per hour. Beyond that, extra speed makes no difference to most drivers.” As a case in point with reference to innovation, as autonomous vehicles begin appearing, according to her, the speed utility curve for autos might change from being flat at 90 mph to more of an upward shift.
Decide where to focus your innovation efforts. Schilling suggests scoring each dimension on a scale of 1 to 5 (with 5 being very important). The scoring sheet should be represented by categories such as its importance to your customers, potential for improving/advancing the industry, and the how easy it would be to implement the innovation. The higher scoring dimensions should get the most attention.
The exercise "can help managers broaden their perspectives on their industry and shift their focus from ‘This is what we do’ to ‘This is where our market is (or should be) heading.’ It can also help overcome the bias and inertia that tend to keep an organization’s attention locked on technology dimensions that are less important to consumers than they once were."
An argument could be made that hindsight always results in vision that is 20/20, but for many companies, by just going through an innovation exercise, many new and exciting realizations can be developed, learned from, and added to the growth trajectory of your firm.
Dan Arens is an Indiana-based business growth advisor.