How Can You Jump Start Innovation?

by Jay Deragon on 09/14/2015

jumpstart innovation

To thrive in 2015 and beyond the name of the business game is innovation. But that is a business game that requires more than a new marketing label or adding a new feature to an old product. It requires creating new things and doing things differently.

Finding new things can be difficult if not impossible because it is not predictable, tangible or certain but it is a requirement to be a market leader. It is also extremely difficult to do using the same mental models that framed the ways and things you’ve always produced and done for the same customers year after year.

New things come from innovation and innovation is everywhere these days. The demand for innovation has 6 out of 10 CEOs making it a priority focus or one of their priorities according to a survey of PWC. So one may wonder what this intangible thing is called innovation that seems so necessary for an organization to thrive in 2014.

Let’s see how others have defined innovation:

  • An innovation is something original, new, and important – in whatever field – that breaks in to (or obtains a foothold in) a market or society.
  • It’s not the same as invention, although folks often confuse the two. Invention is a unique discovery or finding; innovation is introducing something new.
  • Innovation can be an application of someone else’s invention in a new and practical way.
  • In Innovators Don’t See Different Things – They See Things Differently, Steve Tobak writes about what Malcolm Gladwell calls the Creation Myth: which is an innovator may not be the guy who comes up with the idea but the guy who turns that idea into something people can use.

So the collective meaning of innovation can be summed up as:  something new, original, useful and meaningful enough that it transforms the markets behavior from one state to another. Read it again and ask yourself who is really bringing innovation that changes the markets behavior.

Many organizations say they have or are about to release innovative products as if just saying the word makes it true. Consider nearly half of the S&P 500 used the word “innovation” in their Q3 conference calls. Shane Snow said it best “If you go around telling people you’re humble, the opposite is true.”Humble” is a descriptor that’s bestowed not seized. The same is true with “innovation.”

Innovation Doesn’t Follow It Leads

In a connected marketplace of consumers with growing influence innovation is the magnet of attraction that fuels the influence. Entire markets have been changed by Apple’s products, Google’s search engine capabilities, Facebook’s network effects and many others who have introduced disruptive innovations.

Innovation is the fuel of the 21st century. Innovation provides the value stakeholders and stockholders seek.  Stakeholders get enormous value out of using innovation while stockholders gain economic value from massive consumption of innovation. Just how much value? Instagram’s entire company was only 12 employees creating value for over 150 million users when Facebook bought them for a billion dollars.

 So how can your company create innovation?

Most organizations create “innovation task force,” to help them seize the future. The fact that they need an internal group with the name “innovation” means it’s not going to work. Internal groups waste too much time brainstorming old ideas that fit into the same old mental models of the existing organization or industry being served. Rarely does anything new or innovative come from internal committee’s or “innovation task forces”.

There are three primary innovation structures used in corporations today: skunk works, intrapreneur programs, and innovation labs. History has shown that none of them work for disruptive, new product development.

There is a new model emerging aimed at helping businesses jump-start the innovation discovery process through a creative approach involving internal and external resources.

The internal resources start with your culture and end with your business model. The external resources start with the market you aim to serve and end with the actual customers you do serve.  Makes sense?

{ Comments on this entry are closed }

experienceEveryday stories appear which illustrate the value of intangibles to the creation of value for business. Value creation for a business is paramount to finding and keeping customers.

What enables a business to find and keep customers are good experiences the business creates in a marketplace… experiences that get shared with others.

In today’s connected world “others” becomes a large audience quickly and even more so when the customers experience is a bad one.

Experience is an intangible asset that represents relationship capital which gets translated into tangible results. Relationship Capital is created through the interactions a business creates with its customers as well as the messages and images it creates and the quality of service provided. Relationship Capital is not created in a silo rather it is intertwined and supported by an organization Strategic, Human and Structural Capital all of which are intangible.

Even with clear evidence as indicated below businesses fail to identify measure, monitor and improve upon the intangibles so they can improve upon the results.  Consider the following:

  1. Price is not the main reason for customer churn, it is actually due to the overall poor quality of customer service – Accenture global customer satisfaction report
  2. A customer is 4 times more likely to defect to a competitor if the problem is service-related than price- or product-related – Bain & Company.
  3. The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% – Marketing Metrics.
  4. For every customer complaint there are 26 other unhappy customers who have remained silent –Lee Resource.
  5.  A 2% increase in customer retention has the same effect as decreasing costs by 10% –Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy.
  6. 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1Financial Training services.
  7. A dis-satisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. – White House Office of Consumer Affairs.
  8. Happy customers who get their issue resolved tell about 4-6 people about their experience. – White House Office of Consumer Affair.
  9. 70% of buying experiences are based on how the customer feels they are being treated – McKinsey.
  10. 55% of customers would pay extra to guarantee a better service – Defaqto research.

The rules of business in the 21st Century require a change in our thinking if we truly want to improve results. We must start by changing the way we think about getting results.

As said, illustrated, data supported and told by some of the top performing companies worldwide, results are merely the outputs of everyone value contributions. Said contributions come from the intangible assets while 10% comes from the tangilbe. Disagree then present your evidence.


{ Comments on this entry are closed }

Foolish Things Business People Do

September 7, 2015

I have made some foolish business decisions in the past and each time I make sure the lesson is implanted in my brain for recall when I wander again towards foolishness.  Foolishness is the opposite of wisdom and the only thing that sustains a business is the wisdom to know not to make foolish decisions. […]

Read the full article →

HBR’s Makeover Needs a Makeover

November 10, 2014

Last month Harvard Business Review (HBR) announced they would be releasing a new makeover of the HBR web site. Last week the makeover was revealed and purely from a user’s perspective (is there any other perspective?) the new makeover needs a new makeover. Sorry. the makeover seemed to take away instead of adding value I […]

Read the full article →

The Chasm Of Management Practices

September 10, 2014

There is a management chasm emerging that left unchecked could destroy your organizations future. A chasm is a marked division, separation, or difference between one point and another. In the field of management practices the points are past practices vs. future practices. Being stuck in the chasm means you are not going anywhere but down […]

Read the full article →

Smarter Consultants Don’t Follow Conventional Wisdom

August 18, 2014

Companies have failed at executing strategies 70% of the time. Two decades ago, 70 percent of McKinsey’s revenues came from strategy and corporate finance but most now flow from hands-on work in risk, operations and marketing and less from strategic thinking. So strategic execution fails most of the time and the demand for strategy development […]

Read the full article →

Learning What We Didn’t Know

July 30, 2014

We are taught to know what we are told we need to know. The historical methods of learning have taught us what others think we need to know.  What we don’t know is then up to us to learn. Before the internet we learned from institutions, friends, family and co-workers.  Learning was a process largely […]

Read the full article →

Rising Female Leaders in Nashville: Part 1

June 17, 2014

For the last six months I ‘ve studied the rising influence of women on business.  Besides researching the trends I have talked with many women whose rising influence is helping change markets locally and globally.  Subsequently I’ve decided to write a series of post sharing my findings and some of the rising local female leaders. Lets start with […]

Read the full article →