Strong innovation requires discipline and leadership
"Innovation" is a hot buzzword in corporate America; some executives view it as a call for bringing in creative minds and generating lots of imaginative ideas and out-of-the-box thinking.
"You’re halfway there," says Chetan Chandavarkar, director of product development for management consultants futurethink LLC.
Creative ideas are great, but innovation is not generated by wild-eyed, unstructured activities. Chandavarkar, who spoke last year at the Society of Human Resource Management convention in Las Vegas, defines innovation as the "introduction of something new, useful and valuable for your organization." Creativity produces ideas; innovation is the application of those ideas to create a product or service with value.
In the 1800s, a creative mind might have imagined a perpetually burning source of light that could maintain itself without use of oil, fuel or fire. But it took Edison and a series of innovative solutions to bring the light bulb and the electricity that powered it into the homes of millions around the world.
"Value" is the key word. Creative ideas are great, but the most powerful innovations often are simple concepts that have high utility. (Here are three that are at my desk as I write this article – Post-it notes, prescription glasses that turn dark in the sunlight and guaranteed mail delivery overnight.)
Best-practice organizations – companies like 3M, Federal Express, IBM, Nike, Pixar, Whole Foods, General Electric, Google and Toyota – "make innovation a discipline," Chandavarkar said. These firms ensure that the organization’s structure, reward systems and culture allow innovative ideas to flourish and to be implemented.
What does an innovative culture look like? There are many models – IBM is run much differently than Whole Foods, for example. But a few traits seem to be particularly useful. Innovative cultures are idea factories – volume is important. Those cultures rarely settle on the most obvious solution; they dig for something richer. They look outside the organization for ideas or stimulation. They try to turn assumptions on their head.
Frans Johansson, author of "The Medici Effect," notes that innovators find ideas at the intersection of disciplines – the food business plus the gasoline business produces the mini-mart, for example.
Innovative cultures set clear and rational criteria for vetting ideas. They are good at testing, piloting, and recalibrating after product launches.
Perhaps most importantly, these companies come to terms more readily with risk and failure. They know, as Chandavarkar puts it: "Change is risky; standing still is fatal." They learn how to "fail fast and fail cheap," in the words of Scott Anthony, managing director of Innosight LLC, and that a "good failure" produces valuable learning that can be applied to other products or processes.
Chandavarkar says the leader’s role is crucial in establishing a strong environment for innovation. Senior leaders must actively fund, support and show interest in innovative projects and strategies. The goal, he said, is creating a climate where innovation is "sustainable and automatic."
Larry Olmstead is president and executive consultant of Leading Edge Associates.