Innovation Hoopla All Bark No Bite

Business observers are watching the imperative for Innovation unfold today much as they did in the 1980s, when the imperative for Quality pervaded the corporate agenda. Back then, we were getting our clocks cleaned by Asian competitors who figured out how to build reliable quality into their products while keeping costs down.  

In other words, fear was in the air. Legitimate fear, born of the reality that America was no longer the far-and-away leader in making high-quality cars, TVs and other stuff that consumers wanted to buy.

Today the permeating fear is grounded in the need to innovate or die. No one is questioning the need to become more innovative today, just as no one questioned the need to improve quality in the past. 

IBM Business Consulting Services released a study this month in which 65 percent of the world’s top corporate CEOs declared that “due to pressures from competitive and market forces, they plan to radically change their companies in the next two years.”

The study also said that only 20 percent of CEOs believe they have been successful in driving such change. One key consensus is that CEOs are looking “beyond growth through new products and services. They are increasingly focused on innovation in their business models and operations as key mechanisms for driving change.”

Further, the IBM study concluded that companies should look outside their organizational boundaries for the creative horsepower they need. If you want to be more innovative, you have to collaborate more with business partners and customers to come up with new ideas.

I completely agree that companies need to innovate in everything they do, not just in R&D. Interestingly, the IBM study mentioned that only 14 percent of the surveyed CEOs said internal R&D was the top factor in their company’s ability to innovate. As a whole, internal R&D was eighth on a ranked list of pertinent innovation factors.

I and my colleagues at Breakthrough Management Group wrote a book called Insourcing Innovation in which we briefly examine three very important trends in business management. One is the trend of productivity improvement embodied in its later stages by the methodology called Lean. The other of course is the trend of managing quality, which has come of age with DMAIC, the Six Sigma methodology.   

In our book we point out that today the business world is standardizing on innovation methodologies that many people in an organization can learn and apply. Like Lean and Six Sigma, a set of reliable innovation tools is emerging, and eventually there will be one world-class way to consistently, reliably and perpetually innovate – just like today there are universally accepted ways to perpetually improve productivity (Lean) and quality (Six Sigma).

I applaud the IBM study and so many others as of late that have aptly pointed out the need for more and better innovation. The imperative is real, and companies should be fearful of not meeting this need as well or better than competitors.

What I don’t understand is why IBM’s apparent response to the innovation call seems so weak. Yes, organizations do need to reinvent their business models in concert with their products and services. Yes they need to build better relationships with business partners and customers for the purpose of better innovation.

But more than anything, companies need to bring more rigor and discipline to their innovation drives. They need to quantify innovation; they need to deploy innovation methodologies in a systematic way; and they need to make the tools of the innovation trade available to as many people as possible, not just those who work in R&D or are in charge of “organic growth.” 

To me this is the only way to solve the problem of poor innovation: take a lesson from Six Sigma and make innovation a corporate initiative complete with all the training, software, tools, deployment structures, supports, metrics, rewards, recognition and results.

In other words, take the innovation hoopla and give it some real chutzpa.

Study – link to the IBM study

Comments

[Joe Gliksman]

Interesting how I received two messages on innovation just today--it must be that interest in innovation training and techniques is increasing.

While the concept of "learning" to be more innovative is not new, it is not universally accepted. Some still believe that you are born with it. One reason for this belief could be that children are much more innovative than adults. In 1968, Dr. George Land (yes the Poloroid man) distributed among 1600 5-year-olds, a test used by NASA to select the most innovative engineers and scientists. He re-tested the same kids at 10 and at 15 years of age. The results showed a steady decline in innovation and creativity--from 98% at age 5 to 12% at age 15. The same test given to 260,000 adults had an average score of 2%. The point is that creativity and innovation are not only learned, but Non-Creativity needs to unlearned by adults. We "learn" not to take chances, not to volunteer our ideas and face potential embarrassment. As Dave suggests, organizations need to unlearn the processes and techniques that stifle innovation and creativity. Organizations need to open and ready for innovation training.

[Mike C.]

Hi Dave,

Just today IBM took out a 3-page spread in the A section talking about innovation, the need for it, who's doing it, and how IBM can help.

What I found interesting in the advertisement is that they presented five examples of how they have created innovative solutions to problems -- and all five were technology solutions. It makes me wonder: did they pioneer a solution without a problem and then find the problem, or were they presented with a problem that they had to innovatively find an answer to?

Innovation definitely seems to be gathering steam...

Best,
Mike

[Jackie C.]

Hi Dave,

Today, innovation is found in every Six Sigma literature and conference. However, most of us are still focusing on finding a solution inside of the minds of our employees or thru their training. Most recently, HBR published a very interesting article (March 2006) about P&G model for innovation, which focuses on creating a global network of individuals and reaching out the most innovative minds around the world. The message is “connect” and “develop.” Simply put, find people around the world who have done it, connect with them, leverage their knowledge/technology and launch a new product. My nephew Nicholas, who lives in South America, loves the P&G Pringles potato chips. It was very interesting to learn how P&G developed the Pringles potato chips… Well, a small bakery in Bologna had the solution! Now, the big question is: how do we find the right balance between investing in our employees’ innovation training and finding naturally creative people elsewhere?

Have you tried the Pringles Potato Chips? Pretty awesome idea!

Best
Jackie