Innovation is nurturing growth

But, really, what is innovation? It seems to be an exciting concept with a lot of fuzzy edges and an elusive magical aura. Few companies could say they have a handle on innovation as a capability they manage like other aspects of their business.  Those that do are amazing and powerful (check out this growth chart for Apple). Innovation makes an organization competitive because it is measured by growth in new products and services or growth in new users (or both).

More often than not, the World’s Most Innovative Companies are a flash in the pan (Groupon?), or have a short tenure at the top of the list and then gradually fade into normalcy. This makes innovation seem even more mysterious and slippery… something to admire, but too vague to manage.  Something based on size or timing, not a sustained advantage directed at a market.

So how can organizations get this capability and why is it so elusive? Let’s start with the elusiveness first. Roger Martin, Dean of the Rotman School of Management, explains that many businesses have a hard time with innovation because it requires a different mindset than the way most business people approach problems. In his book, The Design of Business, he identifies three types of logic necessary for effective problem solving: deductive, inductive, and abductive. 

The problem is, most of our schools and businesses teach and practice only inductive and deductive reasoning (abductive isn’t even in my spell checker). Frankly, most of us don’t chat about formal logic over coffee and donuts, so you can see why this makes innovation slippery. The less formal version of this logic is often called design thinking and was pioneered by IDEO. But that term is awkward because design is associated with fashion, graphics and art, while innovation is more about doing than thinking. So, I just call it the capability of innovation.  I don’t disagree with Bruce Nussbaum’s focus on creativity, but that still feels incomplete to me.

The capability of innovation is a compound set of three skills that enable you to solve problems for your customers: rigorous observation, creative wonderment, and risk management. Whoa. Did you say wonderment? Yes, yes I did. (see Phineus and Ferb) Innovation is about coping with ambiguity and uncertainty while constantly moving forward to discover new opportunities. Since most business people haven’t developed these skills in their formal training, not knowing the best path forward makes them uncomfortable. So they stick with what they know, which keeps them locked in the present.

Three core skills of innovation

1. Rigorous observation. This is about being obsessed with your customers in action. This obsession involves asking questions, taking photos, and simply watching what they do (and don’t do) when interacting with a product or service. Ironically, many product managers defend their product deficiencies by saying customers didn’t behave as they should (at least they notice the gap!).

2. Imaginative wonderment. Instead of defending them with deductive reasoning, an innovative product manager would ask, “I wonder why that happened?” This is a moment of truth where innovation will live or die. If the leader shifts reasoning modes and becomes curious, the next step is to explore what could be happening instead of defending what is happening. This is not magical or fluffy, it’s a rational leap based on an observed pattern.

The exploration process that underpins imaginative wonderment is essentially the scientific method. It is the rapid iteration of possibilities that are tested against audacious goals (Like Thomas Edison and the light bulb). An emerging solution to a customer problem is driven by simple questions like, “Why not?” but is also constrained by feasibility (can it be built?) and viability (does it make business sense?). This exploration is both serious and fun. Systematic testing and elimination of ideas and options requires discipline, tenacity, and rigor. Generating an endless array of possibilities to test is playful, energizing, and empowering.

3. Risk Management. Overcoming the challenge of risk in innovation starts with a better understanding of the difference between innovation and invention. The dominant (but false) understanding that innovation comes from a blinding flash of insight, or from a lone genius that sees the world from a different angle, makes innovation seem untenable. How is a company supposed to plan for genius to occur? What’s the timeline? No wonder it’s not supported.

Innovation is not driven by breakthroughs in technology… it’s the opposite. Innovation is driven by commitment to satisfying customer’s needs and keen observations about what is and what is not working. These observations push the limits of technology and force the breakthroughs. Innovation in practice couldn’t be farther from being a lone inventor in a lab. Innovation is a collaborative, hands-on experience, taking place on the front lines with customers.

So the way to manage risk in innovation is first to stay very close to your customers, second to create a portfolio of innovation projects designed to solve their problems, and third to move very quickly to determine what doesn’t work so you don’t waste time and resources on unacceptable solutions.

Not every idea will evolve into an innovative solution (either attracts new customers or more engagement from current customers). An effective innovation portfolio should work much like an effective stock portfolio. There should be a mixture of incremental improvement ideas, evolutionary ideas, and revolutionary ideas. Investing in a balanced portfolio of several ideas mitigates the risk across all of them instead of placing “all of your eggs in one basket.”

Innovation is not whimsical, magical, or fluffy. It’s not accidental or even unpredictable. The problem with innovation for some companies could be that it’s more about nurturing than managing, a human-centered style not often associated with the titans of business.

Naive minds find new possibilities

I’m often inspired by my kids.  They are my innocence goggles. When I’m stuck on a problem, I can put them on to get truly unbiased views of things I take for granted as an adult.  You’ve probably heard the quote from Einstein, “My secret is I remained a child. I always asked the simplest questions. I ask them still.”

The other day I asked my son what air tasted like and he responded by sticking out his tongue to try it.  Certainly such innocence can have a down side, so it must be supported and protected.  But it is essential as a basis for discovery.  So much of what we do as adults leads us to edit or dismiss ideas before they have a chance to be properly “tasted”.

Here, I’m reminded of the great book, Stumbling on Happiness by Daniel Gilbert.  In it he describes all kinds of cool research and experiments about how the human brain works.  One thing that stood out for me is that we have to gloss over many details of the world just to function.  That is, there’s so much going on around us, that our brain has filters that automatically fill in some of what’s real with existing assumptions in favor of more efficient sensory processing.

That works great when you are trying to be efficient, but when you are trying to discover something new, you must look with new eyes and uncover not only your assumptions about what is real, but overcome your perceptions of what’s real.

Try this little experiment that demonstrates how your brain fills in things your eyes can’t see:

Place your mouse pointer on the screen to the right of the JFX logo at the top of my blog (right in front of the word “playing”).  Now cover your left eye and look at the JFX logo with your right eye.  Gradually move your head closer to the screen until the pointer disappears.  Move a little forward and back… see the pointer appear and disappear?

The pointer disappears because there is a blind spot in your eye at the point where your optic nerve is attached.   You don’t walk around with empty spots in your field of vision because your brain uses information from around the spot on the retina to construct an appropriate image.  Your brain automatically “assumes” what is there and makes you see it. This happens in your memory too.  Read the book for more fun examples.

So the point is, our brains are constructed to help us fill in missing information because most of the time that’s a great strategy for us to function successfully in the world.  But when you need to solve a difficult problem, it’s better to keep a naive mind.  That way you don’t miss the answers that are sitting right in front of you because you are assuming they’ve already been found.

This is not difficult to do, it just takes practice.

Or just hang around a bunch of toddlers and taste some air!