Top five success factors
How well are you innovating? Companies may be tempted to see good ideas as a mystical gift, but innovation is a process that can be managed and monitored like any other. If innovation is treated like a science rather than an art, it can yield measurably better results.
Arthur D. Little’s latest Global Innovation Excellence Survey showed that top quartile innovation performers
can get 13% more profit from new products and services than average performers. They can also
shorten their time to break even by 30%. Here are five ways to crank your innovation engine:
1. think from your customers’ point of view
Are you thinking about how you want to do business, or how your customers want you to do business? Entrepreneur Greg Gianforte found himself at a loose end, having started and sold several companies. He phoned 400 support managers to ask what their biggest problem was. They said: “Dealing with customer support email.” He thought about how to help them, and RightNow Technologies was born. That was in 1997. Oracle bought it in 2011 for $1.5bn.
2. create a positive feedback loop…
“Success can be seen as a starting point or a springboard for more ideas. Look at your successes and see how you can innovate based on those,” says Simon Hill, MD of idea management software firm Wazoku. Thinking from the customer perspective can be useful here, too. Taking customer feedback and feeding it into your innovation process can help to refine your products and services with new, sought-after features.
3. …but don’t just iterate – disrupt
Iteration can be useful, but don’t always focus on merely building a better mousetrap. One of the biggest barriers to innovation is thinking too small. Some of the most innovative ideas have come from ideas that have shaken existing models to their roots and built them up again. Apple is a good example here. It rewrote the way music was distributed by creating an entire ecosystem. It created a whole new product category for the iPad by disrupting the traditional PC market with a perfectly-executed concept.
4. revel in failure
Innovation needs agility. Innovators must be able to try new ideas without getting bogged down in red tape and bureaucracy. “Fail early, fail often” is a mantra for entrepreneurs, who are encouraged to try different business ideas with minimal investment until one of them takes hold. Innovation is nothing if not an entrepreneurial activity, and the same rules apply.
5. don’t keep it to yourself
“If your business has developed a new innovation to solve an internal problem, think about whether it might have value outside of your organization to competitors or in other vertical markets,” says Dr. Cathy Booth, a patent attorney at Mathys & Squire LLP. In the early 2000s, web design firm 37Signals wanted a project management tool and couldn’t find any that did what it wanted.
“So we decided to build our own. We started showing it to other people, and they liked it, and they said, ‘Hey, I could use this,’” said President Jason Fried. “So we turned it into a product, and now we’re a lot less of a web design firm than we used to be.” He said that in 2005. The next year, that supposedly internal project scooped its millionth external user.
There is a huge amount of latent innovation waiting to be unlocked, if Arthur D. Little’s survey is to be believed. Fewer than one in five companies believes that they have a decent innovation management capability. The challenge is to encourage a culture of nimble innovation and then formalize it without killing it. That requires a fine balance, and a gentle touch.