5 lessons in business innovation

Last week I participated in a live video seminar with innovation guru Tom Koulopoulos and found it helpful on at least two fronts.

First, this “Innovation Master Class” is clearly targeting business leaders who lead innovation groups, are working to encourage more innovative behavior into their organizations, or are managing incubators funded to encourage local growth. Innovation, of course, is easier to theorize about than do, and large organizations in particular can find it difficult to focus on developing innovative value for their customers.

We have helped both Whirlpool and Amway with their internal business innovation efforts. Tom’s course provided great insights into some of the organizational dynamics of setting up what he calls “Innovation Zones” – protected spaces where free thinking is encouraged and rewarded, and the status quo is constantly challenged and redefined. His recommendations certainly mirror our experience in the importance of working directly with business leaders, striving for both autonomy and transparency for innovation efforts, and focusing on customer-value creation.

Secondly, Tom reinforced our most recent work in customer experience innovation. (Who doesn’t like to hear they’re running on the right track?) Here are a five takeaways from the seminar:

Innovation is a threat to yesterday’s success.

Markets don’t always reward new ideas. This why our customer empathy work focuses on customer needs more than customer wants. Markets – people – know what they have experienced, but innovation changes the experience.

Innovation is not a solo flight.

The vision of the lone innovator is dated – the world today is just too complex. Scientific papers, patents, and business innovation is increasingly co-authored and co-owned. The trend line is incredibly obvious toward collaborative innovation. Work in interdisciplinary teams and networks to find new paths. Remember that innovation is often about combination: There will be some chaos, but don’t try to avoid it. Fail fast, start learning, be agile. Innovation – as opposed to invention – is more process than product, and the future of innovation is about collaboration.

Budgeting can be an innovation killer.

Rather than managing costs, focus first on investing to create value. The greatest value of innovation results from a context of profound and prolonged uncertainty. So learn how to react quickly when you discern real sources of value. For us, this starts with a well-defined business position. Budgets are put in place to accommodate anticipated needs, and are necessary for many kinds of work. Innovation – finding new sources of value – needs room to explore.

Experience innovation is infinite.

Innovations in product design, price, and speed to market only go so far, but you can always better understand your customer, their needs and desires, and find ways to meet them that are ever better and differentiating. We continue to see a shift from product to service economy, and exploring this area is a great way to surface new innovation opportunities.

Design processes around your customer.

Organizations need to innovate the customer experience first and then work backwards to deliver that experience. When we make plans, we often get the future wrong because we don’t always understand customer behavior. Do all you can to understand the customer’s context before your next investment.

Author: Kevin Budelmann
 

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