The process of translating an idea or invention into a good or service that creates value that customers will pay for.
To be called an innovation, an idea must be replicable at an economic cost and must respond to a specific need. Innovation consists of the deliberate application of information, imagination and initiative to derive greater or different values of resources, and includes all the processes by which new ideas are generated and turned into useful products. In business, innovation often occurs when ideas are applied by the company in order to further satisfy the needs and expectations of customers.
In a social context, innovation helps create new methods for creating alliances, joint ventures, flexible working hours, and creating purchasing power for buyers. Innovations are divided into two broad categories:
- Evolutionary innovations (continuous or dynamic evolutionary innovation) that are caused by many incremental advances in techniques or processes Revolutionary innovations (also called discontinuous innovations), which are often disruptive and new.
Innovation is synonymous with risk taking and organizations that create revolutionary products or technologies take the greatest risk as they create new markets.
Copycats are at less risk because they will start with an innovator's product and take a more effective approach. Examples are IBM with its PC against Apple Computer, COMPAQ with its cheapest PC against IBM, and Dell with its even cheaper clones that hurt COMPAQ.
Innovation is not a problem of ideas
When most organizations try to scale up their innovation efforts, they always seem to start from the same assumption: "We need more ideas." They are going to start talking about the need to 'think outside the box' or 'blue sky', to think in order to find some ideas that can be turned into viable new products or systems. However, in most organizations, innovation is not hampered by a lack of ideas, but rather a lack of awareness to realize that good ideas already exist.
It is not a problem of the idea; it is a recognition problem.
Some well-known examples from history: Kodak's research lab invented the first digital camera in 1975, but did not continue it. Instead, they paid for virtually no attention, as Sony has developed a different prototype and stole the future of digital photography from under them. Xerox developed the first personal computer, but did not invest enough in the technology and allowed Steve Jobs and Apple to snatch the opportunity from a distance. The United States Navy rejected 13 submissions by William S. Sims regarding a new and innovative method of shooting, it was not until Sims' appeal to President Theodore Roosevelt that his improved method was recognized.
These are not just hilarious examples of smart people and established companies being hilariously flawed, they actually reflect a bias we all share, a bias against new and creative ideas when faced with even small amounts of uncertainty. Those are the implications of a study published last year by a team of researchers led by Wharton's Jennifer Mueller. The research team divided the participants into two groups and created a small level of uncertainty in one group by telling them that they would be eligible for the additional payment based on a random drawing of the participants. The researchers don't go into much detail about how their additional payment possibilities would work out, just that they were going to find out after the study was completed.It wasn't a momentous proposition, but it was still enough to produce some feelings of uncertainty within the group.
The participants were given two tests. The first test was designed to find out your implicit perceptions of creativity and practicality. Participants are shown two sets of word pairs and asked to select their preferred phrase. The pairings were created by combining words that reflected creativity (novelty, original inventive step) or words that reflected practicality (functional, useful, constructive) with words that conveyed a positive value (good, sun, peace) or negative (ugly, bad, rotten). So in each round, the participants would choose their preference for phrases like "original good" or "practical bad." The second test was designed to explicitly study your feelings towards new, creative ideas. In this test,The participants were simply asked to rate their feelings toward creativity and practicality on a scale of 1 to 7.
The researchers found that people exposed to a small amount of uncertainty said they value creativity, but actually favored practical word pairings over creative pairings. In a follow-up experiment published in the same journal, the participants in the conditions of uncertainty even presented a prototype for a new and innovative sports shoe and classified as significantly less viable than the control group.
If a negative bias against creativity is present in times of uncertainty, this could explain why so many notable innovations were initially rejected. The implications for today are especially important, as few executives would say they are not working in an uncertain industry. The same uncertainty that causes companies to innovate can also trigger executives to reject discoveries that could help them gain a competitive advantage. Ideas that could keep the company alive are being killed too quickly.
A possible solution to this problem of "killing ideas" is to change the structure of the ideas through which they have to move. Instead of using the traditional hierarchy of finding and approving ideas, the approval process can be disseminated throughout the organization. That's the Rhode Island-based approach that Rite-Solutions has taken for nearly a decade. Rite-Solutions has created an "idea marketplace" on its internal website where anyone can post an idea and list it as a "reserve" in the marketplace, called "Mutual Fun." All employees are also given $ 10,000 in virtual currency to "invest" in the ideas. In addition to investment, employees also volunteer to work on the project ideas they support. If an idea gathers enough support,the project is approved and all those who supported are given a share of the benefits of the project. In just a few years, the program has already produced huge benefits for the company, from small incremental changes in products from entirely new industries. In its first year, mutual fun accounted for 50 percent of the company's new business growth. More important than immediate revenue, the ideas marketplace has created a culture in which new ideas are recognized and developed throughout the company, a democratization of recognition.mutual fun accounted for 50 percent of the company's new business growth. More important than immediate revenue, the ideas marketplace has created a culture in which new ideas are recognized and developed throughout the company, a democratization of recognition.mutual fun accounted for 50 percent of the company's new business growth. More important than immediate revenue, the ideas marketplace has created a culture in which new ideas are recognized and developed throughout the company, a democratization of recognition.
Furthermore, it is a system based on the assumption that everyone in the company already has great ideas and the market only makes them better at finding those ideas. It is not an idea-solution; it is a recognition of the solution (Burkus, 2016).
The DNA of an innovator
How to find innovative people for the organization? And how can I be more innovative myself?
These are tough questions for senior executives who understand that innovation is the "secret ingredient" to business success. Unfortunately, most of us know very little about what makes one person more creative than another. Perhaps for this reason, we are in awe of visionary entrepreneurs like Apple's Steve Jobs, Amazon's Jeff Bezos, eBay's Pierre Omidyar, and P & G's AG Lafley. How do these people come up with new innovative ideas? If it were possible to discover the inner workings of teachers' minds, what could the rest of us learn about how innovation actually occurs?
In search of answers, a six-year study was conducted to discover the origins of disruptive strategies - creative businesses, and often in particular innovative companies. The goal was to put innovative entrepreneurs under the microscope, examining when and how they came up with the ideas on which their businesses are built. How they differ from other executives and entrepreneurs was examined: Someone who buys a McDonald's franchise may be an entrepreneur, but building Amazon requires different skills altogether. The habits of 25 innovative entrepreneurs were studied and more than 3,000 executives and 500 individuals who had started innovative companies or invented new products were interviewed.
In most companies, top executives do not feel personally responsible for coming up with strategic innovations. Rather, they feel responsible for facilitating the innovation process. In stark contrast, the top executives of the most innovative companies (only 15% of the study) do not delegate creativity, they do it themselves.
But how do they do it? The research led to the identification of five discovery skills that distinguish the most creative executives: association, questioning, observation, experimentation, and networking. Innovative entrepreneurs (who are also CEOs) were found to spend 50% more time on these discovery activities than CEOs with no track record of innovation. Together, these skills make up what we call Innovator DNA. And the good news is that if you are not born with it, you can cultivate it.
What makes innovators different?
Innovative entrepreneurs have something called creative intelligence, which allows discovery yet differs from other types of intelligence (as suggested by Howard Gardner's theory of multiple intelligences). It is more than the cognitive ability of being right-handed. Innovators engage both sides of the brain as they harness the five discovery skills to create new ideas.
In thinking about how these skills work together, we have found it helpful to apply the DNA metaphor. Associating is like the backbone of the double helix structure of DNA; Four patterns of action (questioning, observation, experimentation, and networking) wind around this spine, helping to cultivate new points of view. And just as each person's physical DNA is unique, each individual that was studied had the DNA of a unique innovator for generating innovative business ideas.
Imagine that you have an identical twin, endowed with the same brains and natural talents that you have. Give both of them a week to come up with a new creative business-company idea. During that week, the ideas come to you by themselves in your room. In contrast, his twin (1) talks to 10 people, including an engineer, a musician, a stay-at-home dad, and a designer about the company, (2) visits three innovative startups to see what they do., (3) exemplifies five "new products to market", (4) shows a prototype that is built for five people, and (5) asks the questions "What if I try this?" and "Why are you doing that?" at least 10 times each day during these networks, observation, experimentation and activities. Who do you bet that comes up with the most innovative (and feasible) idea?
Studies of identical twins separated at birth indicate that our ability to think creatively comes from one third of genetics; but two-thirds of the innovation skill set comes through learning, first understanding a particular skill, then practicing it, experimenting, and ultimately gaining confidence in one's ability to create. The innovative entrepreneurs in the study acquired and honed their innovation skills in precisely this way.
The skills in detail.
Discovery Skill 1: Associate
Associating, or the ability to correctly connect seemingly unrelated questions, problems, or ideas from different fields, is central to the innovator's DNA. Entrepreneur Frans Johansson describes this phenomenon as the 'Medici effect', referring to the creative explosion in Florence when the Medici family brought together people from a wide range of disciplines, sculptors, scientists, poets, philosophers, painters and architects. As these individuals connected, new ideas flourished at the intersections of their respective fields, thereby spawning the Renaissance, one of the most original eras in history.
To understand how association works, it is important to understand how the brain works. The brain does not store information like a dictionary, where the word "theater" can be found under the letter "T". Instead, the word "theater" is associated with any number of experiences in our lives. Some of these are logical ("West End" or "in between"), while others may be less obvious (perhaps "anxiety" from a failed high school performance). The more diverse our experience and knowledge, the more brain connections we can make. Fresh inputs trigger new associations; For some, these lead to new ideas. As Steve Jobs has often observed, "Creativity is the connection of things."
The world's most innovative companies prosper by capitalizing on the divergent associations of their founders, executives, and employees. For example, eBay, Pierre Omidyar launched in 1996 after linking three unrelated points: (1) a fascination with creating more efficient markets, after being excluded from the IPO of a hot internet company in the mid-2000s. 1990s; (2) his fiancee's desire to locate hard-to-find collectible Pez dispensers; and (3) the ineffectiveness of local classifieds in locating such items. Similarly, Steve Jobs is able to generate one idea after another, because he has spent a lifetime exploring new and unrelated things, the art of calligraphy, meditation practices in an ashram in India,the fine details of a Mercedes-Benz.
Associating is like a mental muscle that can grow stronger through the use of the other discovery skills. As innovators engage in these behaviors, they build their ability to generate ideas that can be recombined in new ways. People most often in the study tried to understand, classify, and store new knowledge, more easily than their brains naturally and consistently store and recombine associations.
Discovery Skill 2: Questioning
Over 50 years ago, Peter Drucker described the power of provocative questions. "The important and difficult work is not to find the correct answers again, it is to find the correct question," he wrote. Innovators constantly ask questions that defy common wisdom or, as Chairman of the Tata Group, Ratan Tata calls the "unquestionable" question. Meg Whitman, former CEO of eBay, has worked directly with a number of innovative entrepreneurs, including the founders of eBay, PayPal, and Skype. "They get a pushback by screwing up the status quo," he told us. They can't bear it. Consequently, they spend an enormous amount of time thinking about how to change the world. And since they brainstorm, they like to ask, "If we did this, what would happen?"
Most of the innovative entrepreneurs interviewed could recall the specific questions they asked when they got the inspiration for a new company. Michael Dell, for example, said his idea for the founding of Dell Computer sprang from him by asking why a computer costs five times more than the sum of its parts. "I would like to have separate teams and I see that $ 600 million of the parts were sold for $ 3,000." In chewing on the issue, he impacted on his revolutionary business model.
To ask effectively, innovative entrepreneurs do the following:
Asking "Why?" And why not?" And "What if?"
Most managers focus on understanding how to make existing processes, the status quo, work a little better (How can we improve widget sales in Taiwan?). Innovative entrepreneurs, by contrast, are much more likely to question assumptions (If we cut the size or weight of the widget in half, how would the value proposition it offers change?). Marc Benioff, founder of online sales software provider Salesforce.com, was full of questions after witnessing the emergence of Amazon and eBay, two companies built on services provided over the Internet. Why do we keep uploading and updating software the way we've been doing it all this time when we can now do it on the internet? He wondered.This fundamental question was the genesis of Salesforce.com.
Imagine opposites.
In his book, The Opposite Mind, Martin (2013) writes that innovative thinkers have "the ability to keep two diametrically opposed ideas in their heads." He explains, "without panicking or simply settling for one or the other alternative, they are capable of producing a synthesis that is superior to any contrary idea."
Innovative entrepreneurs like to play the devil's advocate. "My learning process has always been to disagree with what I have been informed and take the opposite position, and push others to really justify themselves," Pierre Omidyar said. "I remember it was very frustrating for the other children when I did this." Asking yourself, or others, to imagine a completely different alternative can lead to truly original ideas.
Embrace limitations.
Most of us impose limitations on our thinking only when we are forced to cope with real-world limitations, such as resource allocation or technological constraints. Ironically, big questions actively place restrictions on our thinking and serve as a catalyst for insights outside the box. (In fact, one of Google's nine innovation principles is "Creativity loves limitations.") To start a creative discussion about growth opportunities, an innovative executive in the study asked this question: "What if you legally prohibited us from selling to our current customers? How can we make money next year? " This led to a detailed exploration of ways the company could find and serve new customers.Another innovative CEO pushes his managers to examine sunk cost constraints with the question, "What if they hadn't hired this person, installed this equipment, implemented this process, bought this business, or pursued this strategy? Would you do the same as you are doing today?
Discovery Skill 3: Observe
Discovery executives produce unusual business ideas by examining common phenomena, particularly the behavior of potential customers. Observing others, they act as anthropologists and social scientists.
Intuit founder Scott Cook came up with the idea for Quicken financial software after two key observations. First, his wife's frustration was noted as she struggled to keep track of her finances. “Often times, the surprises that lead to new business ideas come from seeing other people working and living their normal lives,” explains Cook. «You see something and ask: Why do they do that? That makes no sense". Then a friend got her a sneak peek at the Apple Lisa before its release. Immediately after leaving Apple headquarters, Cook drove to the nearest restaurant to write down everything he had noticed on the Lisa.His observations led to ideas such as building the graphical user interface to look just like its real-world counterpart (a check book, for example), making it easy for people to use. So Cook dedicated himself to solving his wife's problems and grabbed 50% of the financial software market in the first year.
Innovators carefully, intentionally, and consistently look for small behavioral details - in the activities of customers, suppliers, and other companies - in order to gain insight into new ways of doing things. Ratan Tata got the inspiration that led to the cheapest car in the world by watching the plight of a family of four packed into a single motorized sale. After years of product development, Tata Group launched the $ 2,500 Nano in 2009 using a modular production method that can disrupt the entire car distribution system in India. Observers try all kinds of techniques to see the world in a different light. Akio Toyoda regularly practices Toyota's philosophy of genchi genbutsu "go to the place and see for yourself."Direct observation is often baked into Toyota culture.
Discovery Skill 4: Experimentation
When we think of experiments, we think of scientists in white cloaks or great inventors like Thomas Edison. Like scientists, innovative entrepreneurs actively test new ideas by creating prototypes and launching pilots. (As Edison said, "I haven't failed, I've just found 10,000 ways that don't work.") The world is your laboratory. Unlike observers, who intensely observe the world, experimenters construct interactive experiences and try to elicit unorthodox responses to see what ideas emerge.
The innovative entrepreneurs interviewed all engage in some form of active experimentation, whether it was intellectual exploration (Michael Lazaridis reflecting on relativity theory in high school), physical manipulation (Jeff Bezos dismantling his crib as a child, or Steve Jobs dismantling a Sony Walkman), or commitment to a new environment (Howard Shultz, founder of Starbucks, who travels to Italy visiting coffee shops). As executives of innovative companies, they make experimentation central to everything they do. Bezos's online bookstore didn't stay where it was after its initial success; morphed into an online discount retailer, selling a full line of products from toys, to televisions, and to home appliances.The Kindle e-reader is an experiment that is now transforming Amazon from an online retailer to a manufacturer of innovative electronics. Bezos (2013) considers experimentation so critical to innovation that it has institutionalized it at Amazon. "I encourage our employees to go down dead ends and experiment," says Bezos. "If we can get decentralized processes so that we can do a lot of experiments without it being very expensive, we will have a lot more innovation.""If we can get decentralized processes so that we can do a lot of experiments without it being very expensive, we will have a lot more innovation.""If we can get decentralized processes so that we can do a lot of experiments without it being very expensive, we will have a lot more innovation."
Cook (2012) also stresses the importance of creating a culture that encourages experimentation. "Our culture opens us to allow many failures while we reap the learning," he told us. "It's what separates a culture of innovation from a normal corporate culture."
One of the most powerful experiments that innovators can do is living and working abroad. Our research revealed that the more countries a person has lived in, the more likely he or she is to leverage that experience to offer innovative products, processes or businesses. In fact, if executives even try an international assignment before becoming CEO, their companies deliver stronger financial results than companies led by CEOs without that experience - practically 7% higher than the market performance on average - according to (Carpenter, Sanders, & Gregersen, 2001). P & G's AG Lafley, for example, spent time studying history in France and conducting retail operations at US military bases in Japan.He returned to Japan to lead all of P & G's Asia operations before becoming CEO. His international experience has served him as the leader of one of the most innovative companies in the world.
Discovery Skill 5: Networks
Spending time and energy finding and testing ideas across a network of diverse individuals gives innovators a radically different perspective. Unlike most executives - who go online to access resources, to sell themselves or their companies, or to further their careers - innovative entrepreneurs go out of their way to meet people with different kinds of ideas. and perspectives to extend their own domains of knowledge. To this end, they make a conscious effort to visit other countries and meet people from other walks of life.
They also attend idea conferences such as Technology, Entertainment, and Design (TED), Davos, and the Aspen Festival of Ideas. Such conferences bring together artists, entrepreneurs, academics, politicians, adventurers, scientists and thinkers from around the world, who come to present their new ideas, passions and projects. Lazaridis (2011), the founder of Research In Motion, notes that the inspiration for the original BlackBerry came at a conference in 1987. A speaker was describing a wireless data system that had been designed for Coca-Cola; allowed vending machines to send a signal when they needed to recharge. "That's when it hit me," Lazaridis recalls. "I remembered what my teacher said in high school:" Don't mess with computers too much,because the person who puts wireless technology and computers together is going to make a big difference. “David Neeleman came up with key ideas for JetBlue (such as satellite television in all seats and reservations at home) via networks at conferences and elsewhere.
Kent Bowen, founding scientist of CPS Technologies (manufacturer of an innovative ceramic composite), hung the following credo in each office of his start-up: “The knowledge necessary to solve many of our most difficult problems comes from outside our industry and scientific field. We must aggressively and proudly incorporate into our work discoveries and advances that were not invented here. CPS scientists have solved many complex problems by talking to people in other fields. A Polaroid expert with a deep understanding of film technology knew how to make the strongest ceramic composite. Experts in sperm freezing technology knew how to prevent the growth of ice crystals in cells during freezing,a technique that CPS applied to its manufacturing process with impressive success.
Practice, practice, practice
As innovators actively engaging in discovery skills, it helps define them. They grow more and more confident in their creative abilities. For Lafley (2011), innovation is the central job of each leader, regardless of their place in the organization chart. But what if you (like most executives) don't see yourself or your team as particularly innovative?
Although innovative thinking may be innate to some, it can also be developed and strengthened through practice. We cannot emphasize enough the importance of repeatedly rehearsing the behaviors described above, to the point that they become automatic. This requires spending time with yourself and your team to actively cultivate more creative ideas.
The most important skill to practice is questioning. Asking "why" and "why not" can help turbocharge the other discovery skills. Ask questions that impose and remove restrictions; This will help you see a problem or opportunity from a different angle. Try to spend 15 to 30 minutes each day writing 10 new questions that challenge the status quo in your company or industry. "If I had a favorite question to ask, everyone would anticipate it," Michael Dell told us. Instead, I like to ask things that people don't think I'm going to ask. This is a bit cruel, but I'm happy to ask questions that no one has the answer yet.
To hone your own observation skills, observe how certain customers experience a product or service in its natural environment. Spend an entire day carefully observing the "jobs" that clients are trying to do. Try not to make judgments about what you see: Just pretend you are a fly on the wall, and observe as neutrally as possible. Scott Cook advises Intuit watchers to ask, "What's different than what you expected?" Follow Richard Branson's lead and get in the habit of taking notes wherever you go. Or follow Jeff Bezos: "I take pictures of very bad innovations," he told us, "of which there are a number."
To strengthen experimentation, both at the individual and organizational level, consciously approach work and life with a mental test hypothesis. Attend executive education seminars or courses on topics outside of your area of expertise; disassemble a product or process that interests you; read books that claim to identify emerging trends. When traveling, don't miss the opportunity to learn about different local lifestyles and behavior. Develop new hypotheses based on the knowledge acquired and test them in the search for new products or processes. Find ways to institutionalize frequent and small experiments at all levels of the organization, openly recognizing that learning through failure is valuable,goes a long way towards building an innovative culture.
To improve networking skills, reach out to the top five most creative people you know and ask them to share what they do to stimulate creative thinking. You can also ask if they would be willing to act as your creative mentors. Have regular brainstorming lunches where you meet a few new people from various functions, companies, industries, or countries. Ask them to tell you about their innovative ideas and ask for their opinion on yours.
Innovative entrepreneurship is not a genetic predisposition, it is an active endeavor. Apple's slogan "Think Different" is inspiring but incomplete. Innovators must act consistently, differently, to think differently. By understanding, reinforcing and modeling the DNA of the innovator, companies can find ways to more successfully develop the creative spark in everyone.
References
Bezos, J. (2013). Amazon. Entrepreneurs.
Burkus, D. (2016). Under the new administration. Macmillan UK Bread.
Carpenter, MA, Sanders, G., & Gregersen, HB (2001). Grouping Human Capital with Organizational Context: The Impact of the International Assignment Experience on the Performance of the Multinational Company. Management Academy.
Cook, S. (2012). Scott Cook. Forbes.
Lafley, AG (October 1, 2011). The art and science of finding the right CEO. Harvard Business Review.
Lazaridis, M. (2011). Mike Lazaridis profile page. Global and Mail.
Martin, R. (2013). The opposite mind. Harvard Business Press.
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