Innovation Excellence Weekly - Issue 23

Issue 23 – March 8, 2013

1. Does Innovation Need a Purpose?................................................................... Mari Anixter

2. Top Ten Causes of Innovation Failure ……..……………………....……...…. Paul Hobcraft

3. Sustainable Innovation Metrics ……………………….………..…...……… Robert F Brands

4. Why I Wish There Were No “I” in “Innovate” ............................................... Chris Trimble

5. Gamification and the Innovation Process .……………………………….….… Jessica Day

6. When is an Innovation an Innovation? …………………...……………………. Tim Kastelle

7. The Usefulness of Useless Things ………………………………..…………….... Greg Satell

8. 10 Tips on Making Executives Understand Innovation ………..….….. Stefan Lindegaard

9. Error Doesn’t Matter, Trial Does …………………………………………........ Mike Shipulski

10. 6-Step Blueprint to Build Innovation Momentum ….……………..…...… Stephen Shapiro

Your hosts, Braden Kelley, Julie Anixter and Rowan Gibson, are innovation writers, speakers and

strategic advisors to many of the world’s leading companies.

“Our mission is to help you achieve innovation excellence inside your own organization by making

innovation resources, answers, and best practices accessible for the greater good.”

Cover Image credit: Crazy Inventor from Bigstock

Does Innovation Need a Purpose?
Posted on March 3, 2013 by Mari Anixter

Conversations about Innovation are the oxygen of Innovation Excellence. We love when our contributors converse, collaborate or co-author

articles. Ralph Ohr and Tim Kastelle co-wrote a post recently, and Jeffrey Phillips and Paul Hobcraft collaborated on a series for our site to

name a few. Several of the posts we publish, if not “co-authored”, are likely the outcome of purposeful and impassioned conversations among

our contributing authors. Authors who not just writers, but avid thinkers and collaborators in their work.

I thank Greg Satell for bringing this conversation with Tim Kastelle to my attention. I discussed with Greg and Tim how best to present their

dialogue? E.g., all-in-one or separate links? We are always open to trying something new regarding collaboration or dialogue. In a series of

feature articles, Lou Killeffer has captured and presented many outstanding Innovation Conversations and I encourage you to read them all.

Lou’s are presented in a traditional “interview” format (warning : there is nothing traditional about the thinking within). In the case of today’s

feature, the format is different — linking separate posts by two authors who are writing — individually and together – about a topic of shared

interest.

Tim Kastelle and Greg Satell may agree on points, but today we offer two personal views on one question. In the spirit of innovation dialogue,

we welcome your comments and insights about the question: Does Innovation Need a Purpose? We start with Tim’s post followed by Greg’s

post… followed by our invitation to you: to offer your insights and questions below in the comment box, OR to enter the dialogue with your

own post in this series. Either way, please, don’t hold back! Now, without further delay, Innovation Excellence is proud to feature:

Tim Kastelle article – link here

Greg Satell article – link here

Mari Anixter is Managing Editor for Innovation Excellence. She is a communications professional living in New Mexico.

Top Ten Causes of Innovation Failure
Posted on March 5, 2013 by Paul Hobcraft

So who do you think form the group that are the most likely candidates for

innovations consistent failure? It may surprise you to know that most fingers

point straight to the top of the organization as the main cause for its enduring

failure.

In a recent survey I was reading*, it provided a set of results about the common

cause of innovation failure. I don’t think this is sour grapes of the people working

away on innovation daily, that the ‘finger of failure’ is well and truly pointing

upwards. The survey was asking participants to check all that applied and

although there were 30-odd possible reasons the top ten that stand out as head

and shoulders above all the others are nearly all down to the simple failure of

innovation engagement in its leadership.

There is more often due to an innovation knowledge gap at board room level. They often simply have no real clue on how innovation really

works and what their essential role is in connecting all the different parts necessary to align this into the organizations overarching goals,

objectives and strategies. It is left to others further down the organization to ‘piece it together’ like a jigsaw puzzle without the provided picture

to refer too. It is frustrating.

I know I keep ‘going on’ about the Executive Innovation Work Mat and its value but let’s look at these top ten contributors for failure that is

occurring in organizations just like yours. The Work Mat approach tackles these and lots more but those that are the cause of failure, the

leaders in organizations, do need to understand it is they that are the reason for this and they could do something about it if they wanted too.

So the top ten causes of innovation failure

The top three failures

The three main reasons for failure have been given as 1) unrealistic expectations from top management regarding resources and the time really

required in achieving innovation, then 2) the lack of resources allocated in budget, people, infrastructure and 3) far too much focus on products

and technology and ignoring the other options within innovation, such as service, business model, platform collaborations etc.

Each of these is without doubt for me a top management failure. They either don’t have a real clue of the complexity of innovation, starve it of

its essential resources or just want to stay well within their comfort zone of existing product and technology understanding. This reluctance to

push innovation, to extend capabilities and provide it with the right capabilities ends up in these continuing failures. Equally not to explore all the

types of innovation available does not make sound business sense. This shows a lack of real involvement, comprehension, understanding

and engagement.

The next three failures

In our next three the one that is so constantly described as limiting innovation is 4) that people or teams operate in silo’s instead of broader

collaborative approaches, 5) the wrong personnel are in place to make innovation happen and 6) that classic of classics, a poorly defined

innovation strategy and the goals to achieve this.

Each of these again is a top management failure. They fail to understand the value of building up the capabilities for broader collaborations;

they constrain the very essence that gives their organization its growth by holding back or not pushing for the best people to be engaged within

the projects, or just fail to connect their (often) lofty strategic goals with the innovation activity that can deliver on this. Again, simply failures of

top management to address and resolve these issues are the root cause.

Then the last four within the top ten

The last four within the top ten again start with 7) a lack of innovation strategy, and then 8) where the emphasis is placed in far too much on

idea generation and not on execution, followed by 9) a lack of involving external partners and lastly 10) poor management of the innovation

process.

So again a clear set of management failures. By not having a clear overarching innovation framework in place that links innovation to strategic

alignment, which communicates innovations value and its value position and then the failure to put in place all the critical factors of an

innovation process to make sure that innovation, has the chance to work.

So how much longer will we put up with innovation failure?

Surely this list of causes for innovation failure does become fairly worrying to anyone involved in growth, wealth creation and building and

wanting to belong to a healthy sustaining business?

I can hear you say, “hang on, leaders are busy, caught up in so many areas to run an organization, they are too busy”. Oh come on, let’s stop

protecting them.

My argument straight back to this is “if a leader or his team does not focus on the clear ways to grow a business and make this happen and this

must come primarily through innovation, then they should not be leading”. They should not be focusing on just making organizations efficient

but on being increasingly effective through innovation.

How can they be leaders of organizations, claiming they are keen to grow and expand, if they do not get fully involved in providing the

appropriate framework for innovation to thrive? This is a strategic leadership failure.

I can only assume they are simple not understanding that they are often the primary cause of innovation’s failure within their organization, they

are the main culprits in this. Will this change overnight, of course not? Change it needs too.

Deliver just one potentially compelling message.

We need to deliver this simple message – “as long as you as the leader of the organization and those immediately around you fail to

understand what ‘makes up innovation’ you deserve to fail, and more than likely, fail you will”.

* The survey was conducted by Stefan Lindegaard under his post Organizations and Failure: Why Don’t We Learn More?

image credit: journey of possibilities.com

Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics

that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.

Sustainable Innovation Metrics
Posted on March 3, 2013 by Robert F Brands

Innovation is ultimately about Return on Investment. A system of metrics will objectively show

your progress and success each step of the way. It’s essential to follow a course of action

that produces ongoing improvement, and sustainable and repeatable innovation. Innovation

is meaningless without attaching measurable goals to an initiative.

In order to have optimal measurements there are two types of indicators (metrics) you need

to be aware of:

1. Leading indicators: These types of indicators signal future events. They show you where

you are heading. Leading indicators often change prior to large economic or business

adjustments and, as such, can be used to predict future trends. Examples of leading

indicators can be patents filed, ideas created, and development time spent.

1. Lagging indicators: These indicators show you your rearview mirror observations. The importance of a lagging indicator is its ability to

confirm that a pattern is occurring or about to occur. Examples of lagging indicators include patents granted, expenses, revenue, and inventory

turnover.

The most successful innovative companies observe and measure both indicators for successful development and execution of their quarterly

and annual plans. Be sure to measure the time spent in each gate, and the time spent to get to the next gate. See if you can make any

innovation improvements as far as efficiency along the way. By observing both key metrics, you gain a holistic and well-rounded view of your

company’s performance.

Douglas Wick, President of Positioning Systems, recommends, for every one lagging indicator, you should have two leading indicators.

“Leading indicators let you know what to expect. They help with forecasting and predicting where your business is going and protect you

against falling off the cliff.”

Based on a survey of 200 companies by Goldense Group, the following are the top five R&D metrics used by industry:

 R&D spending as a percentage of sales

 Total patents filed/pending/awarded/rejected

 Total R&D head count

 Current year percentage of sales attributable to new products released in the past year/three years/five years

 Number of new products released

By following a set of metrics, you’ll be able to evaluate the performance of your New Product Development process and your end result. Be

sure to continue to observe and measure these metrics even after the product is launched.

Additional tips:

 What’s Measured, Gets Done: Observation, measurement and tracking of new product development results are essential to optimal

ROI.

 What to look for: Successful Key Performance indicators (KPIs) follow the SMART criteria (s.m.a.r.t). They are…

Specific ‐ pertaining to the goal of the organization

 Measurable ‐ for the organization to assess its progress

 Achievable ‐ realistic in terms of the business environment

 Relevant ‐ directly linking the business and metrics

 Time-Bound ‐ placing goal achievement in a certain time frame.

Observe and Measure is one of the most vital f the 10 imperatives of Robert’s Rules of Innovation. For more Tips, see “Robert’s Rules of

Innovation” A 10-Step Program for Corporate Survival.

image credit: organisationdevelopment.org

Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation: A 10-Step

Program for Corporate Survival,” with Martin Kleinman – published Spring 2010 by Wiley

(www.robertsrulesofinnovation.com).

Why I Wish There Were No “I” in “Innovate”
Posted on March 7, 2013 by Chris Trimble

Humans love to compete for status. That said, each community has its own

scorecard. In Washington, it’s how close you are to the President. On Wall

Street, it’s the size of your bonus. In academia, it’s the number of times your

papers are cited in other papers.

We have our own distinct way of keeping track in the innovation community. It’s

all about how close you are to the beginning of the story. How many times have

you heard a brag line that includes something like “I was there right at the

start!” or “I was employee number three!”

What this means, of course, is that if the idea was yours, then you are king.

We love idea people. We celebrate inventors and their inventions. Heck,

Edison and his light bulb are the ubiquitous icons of innovation. (Indeed, I’ve

long since lost track of the number of innovation books with a light bulb on the cover.)

But, if you give it just a bit of thought, you might agree that this is a questionable scorecard — maybe even a downright peculiar one. It’s sort of

like analyzing a football team and giving all of the credit to the placekicker. After all, they literally kick off the game.

Now, in many endeavors, getting off to a good start is crucial. Innovation is clearly one of them, and breakthrough ideas are hard to come by.

But in my view, the value of the idea has been blown completely out of proportion. Ideas are only beginnings. And getting from big idea to big

impact is extremely difficult — especially in established organizations.

Unfortunately, because we imagine that innovation success is mostly dependent on brilliant individuals with brilliant ideas, we fundamentally

misunderstand what it takes to execute.

Put simply: It takes a team.

But it’s more than that. What’s needed is not just “teamwork” in the general, feel good sense of the word. Executing an innovation initiative

requires the creation of a very special kind of team — a cohesive assembly of individuals who each take on very specific roles. Only a very well-

designed team can simultaneously handle two very different — and often conflicting —challenges: sustaining what exists and building

something new.

Unfortunately, companies, in general, aren’t familiar with what these teams look like. Like a newcomer to the baseball playing world, they have

little idea, if any, about the roles on the team. They have no idea what the pitcher, catcher, infielders, and outfielders do.

Here’s a specific challenge for you. Imagine you are running a decades-old heavy manufacturing company that supplies large capital

equipment to other manufacturers. This year’s strategy calls for building a new business — a software package that will help customers run

their businesses more efficiently.

Now: Define the team that can build the new business while sustaining excellence in the existing one. Who is on it? Full time? Part time? Lead

role? Support role? What are the responsibilities of each player? What should they expect of each other?

I look forward to your responses. I will summarize your thoughts and add my own in a future blog. I’ll also do so during the launch event for my

new parable, How Stella Saved the Farm, on Tuesday March 12 at 1pm. I hope you will register here.

image credit: kenywid.com

Chris Trimble is an expert on making innovation happen in large organizations. He is a frequent speaker on the topic —

keynote, roundtable discussions, and executive education programs. Chris is on the faculty at the Tuck School of

Business at Dartmouth and at The Dartmouth Center for Health Care Delivery Science. He has written four books: How

Stella Saved the Farm; Reverse Innovation; The Other Side of Innovation; and 10 Rules for Strategic Innovators – from

idea to execution.

Gamification and the Innovation Process
Posted on March 4, 2013 by Jessica Day

It was estimated that $100 million was spent on

gamification in 2010. It was also predicted that

that number would rise to $2.8 billion by 2016.

Here in 2013, when the number has risen to $242

million, it certainly seems possible that individuals

as well as more and more organizations will be

looking to gamify their open innovation systems (as

well as numerous other processes).

But that’s just the result. What does gamification

have to do with the open innovation process?

The main goal when applying a gamification strategy to something is to increase engagement, but how much does an organization or program

stand to gain when applying gaming scenarios to their innovation initiative?

Consider this:

 One study by Findlay and Alberts showed that the percentage of contributing members in a community shifted, once a gamification

strategy had been applied to the system. Without a gamified experience, 68% of the community was composed of contributors

(as opposed to merely observers), once the gamification strategy was applied, however, the number of contributors shot up

to 83%. That same study showed the average number of posts per user increased from 1.5 posts/user to 2.3 posts/user with the

gamification strategy.

 The Keas employee wellness program is a system that encourages employees to create healthier, happier lives. When Keas gamified

their approach, their user engagement improved 100x (as an order of magnitude).

 IdeaScale recently launched an enhanced badge gaming system and when the client introduced it to their existing open innovation

platform, engagement increased and community members even began changing their nameplates to reflect their community

standing.

There are many ways to make open innovation challenge-based or to incentivize player behavior. Although, anyone would recommend

exploring numerous paths towards engagement, there was a study that suggested rewarding users for submitting ideas that generate the

highest level of interaction actually improves not just engagement, but idea quality by 40%. If there is a way to allow an open innovation

community to build on, comment on, or contribute to ideas, then rewarding members who activate that sort of behavior generally improves the

ideas as well as engagement. A synopsis of that study’s findings exists here.

How do you improve engagement? Can gamification affect other aspects of innovation as well?

image credit: Creative Commons Flickr

Jessica Day is a marketing and technology writer and editor for IdeaScale. She received her Masters in Writing from the

University of Washington. Day also blogs about crowd-based innovation and idea management solutions at

blog.ideascale.com.

When is an Innovation an Innovation?
Posted on March 3, 2013 by Tim Kastelle

Editor’s note: This post is part of a feature series “Does Innovation Need a Purpose?” Click here

Greg Satell and I have been talking about whether or not innovation needs a purpose. While we

agree on many points, we can see two differing views on the question. I will argue that within an

organisation, innovation does need a purpose.

Let’s start by looking at a case study. When Watson and Crick published their paper revealing the

structure of DNA in 1953, they close the paper by saying:

It has not escaped our notice that the specific pairing we have
postulated immediately suggests a possible copying mechanism for
the genetic material.

In their annotated version of the paper, the fantastic Exploratorium in San Francisco says this about Watson and Crick’s statement:

This phrase and the sentence it begins may be one of the biggest understatements in biology. Watson
and Crick realized at the time that their work had important scientific implications beyond a “pretty
structure.” In this statement, the authors are saying that the base pairing in DNA (adenine links to
thymine and guanine to cytosine) provides the mechanism by which genetic information carried in
the double helix can be precisely copied. Knowledge of this copying mechanism started a scientific
revolution that would lead to, among other advances in molecular biology, the ability to manipulate
DNA for genetic engineering and medical research, and to decode the human genome, along with
those of the mouse, yeast, fruit fly, and other research organisms.

In many respects, even though these applications were noticeable in 1953, it’s really only been in the past 10-15 years that we’ve started to see

a significant economic impact from the discovery of the structure of DNA. So, was the discovery of the structure of DNA an innovation?

There are two ways to look at this. Some say that it’s not an innovation if there isn’t an economic payoff. Or even more strictly, that without a

new product, it’s not innovation. Others say that innovation is driven by discoveries like this – that we must engage in search and discovery

activities even though we have no idea what practical applications will arise.

Even though these seem like opposites, you must do both – This is another innovation paradox.

On the one hand, if you want to stay in business, the ideas that you execute need to create value. Then you have to convert that value into

something that helps you pay the bills. If you’re not innovating around your core, you are vulnerable to competition from people that are.

So while it’s not true that you’re not innovating if it doesn’t create a new product, it is true that you need to create value with your innovations so

that you can generate some sort of return.

When we think about corporate groups that have engaged in pure search and discovery, the two big examples are probably Bell Labs and

Xerox PARC. It’s no coincidence that both parent firms effectively had monopolies when they made these investments – they didn’t have to

care as much about returns.

The answer to the question: was the discovery of the structure of DNA an innovation? depends a lot on timing. And it raises three important

points about managing innovation.

1. Innovation is a process. I’ve said before that innovation is actually the process of idea management. Lukas Fittl tackles this issue

nicely by talking about the distinction between ideation and execution – what he refers to as the flipping the ideation switch:

For our purposes here, ideation is the period when you are doing the searching, which may not have much of a market focus, and execution is

when you zero in on building a profitable business model for your idea. Fittl talks about this as a very directed process even in the exploratory

state.

2. You face uncertainty throughout this entire process. There are a couple of persistent, damaging ideas that pop up here. One is that

when you get to the execution phase of an idea, there isn’t any uncertainty anymore. Unfortunately, this is not true. Any time we are

working with new ideas, we can never be certain that they will work.Roger Martin addresses this in a great post about strategy and

uncertainty:

Contrary to popular opinion, strategy is not about turning uncertainty into certainty. Lots of
bureaucratically inclined board members and corporate executives want and expect this to be the
case. When reviewing strategies, you can hear them asking for proof that the strategy will be
successful.
The reality is that strategy is about making choices under competition and uncertainty. No choice
made today can make future uncertainty go away. The best that great strategy can do is shorten
the odds of success.

Greg has made the point that strategy and innovation are often conflated. In this case, Martin’s comments on strategy do apply to

innovation as well.

3. The business problem with exploration is that the gap between the discovery and the economic payoff is usually very long. This

gap is almost always longer than we expect. Look at the DNA example. Watson and Crick published in 1953, and at the time, they

noticed that the idea had commercial potential. But the first biotech firm, Genentech, wasn’t founded until 1976, and their first product

didn’t come out until 1982 – nearly 30 years after Watson and Crick’s article!

If Watson and Crick had been working for a company in 1953 when they made their discovery, how would it have managed to stay in business

until 1982? You’d need a lot of venture capital to support that…

One way to address this is to manage your innovation activities as a portfolio using a 70/20/10 split in your innovation effort. 70% goes to

improving your core business with incremental innovations, so that you can continue to stay in business. 20% goes to finding adjacent markets

that you can extend into. And 10% goes to blue sky ideas that might change the world, but we just don’t quite know how yet.

Once again, it’s not an either/or question – it’s both/and. We need to be both evolutionary and revolutionary.

However, in practical terms this means that innovation does needs to have a purpose. You can do all the discovery that you want, but if you

don’t use it to create value, you won’t be in business for long.

image credit: answers.com; timkastelle.org

Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about

innovation at the Innovation Leadership Network.

The Usefulness of Useless Things
Posted on March 3, 2013 by Greg Satell

Editor’s note: This post is part of a feature series “Does Innovation Need a Purpose?”

Click here

I’d like to respond to Tim Kastelle’s article through the eyes of Marie Curie, the only

person to win Nobel prizes in two separate sciences. Curie once said this about the

importance of dreamers:

“Humanity certainly needs practical men, who get the most out of their work, and, without

forgetting the general good, safeguard their own interests. But humanity also needs

dreamers, for whom the disinterested development of an enterprise is so captivating that it

becomes impossible for them to devote their care to their own material profit.”

In our ROI driven, accountability dominated, business environment, we’ve come to revere

the former practically minded executives, at the expense of the latter, dreamier type. Many think like Tim Kastelle who argues that in business

you always need to know where you’re going if you are to get anywhere, but I think history shows that’s not really true.

A Minor Traffic Incident

During the Bolshevik revolution in Russia, Vladimir Zworykin escaped down the River Ob, through Siberia, where he knew that the peasants,

lacking wireless communication, were completely unaware of the political situation. He eventually escaped to the United States where, being an

experimental physicist, he found work in Westinghouse labs.

His misadventures continued there. Once, while stopping at a red light, one of his experimental vacuum tubes fell off the back seat and

exploded. Hearing a sound much like a gun shot, a policeman rushed to investigate and began to question the hapless immigrant with the

heavy Russian accent.

Zworykin tried to explain that it was a special kind of tube that exploded, one that could transform radio waves into pictures. “So now you see

pictures on the radio do ya,” the police officer cracked, before hauling him off to the station to straighten things out. Zworykin’s employer felt

very much the same way and refused to invest in his idea.

It wasn’t until over a decade later, after he had received the backing of fellow emigre David Sarnoff, that Zworykin’s impractical idea of a

television came to fruition where, fittingly, police dramas remain among the most popular fare.

A Father’s Advice

Unlike Vladimir Zworykin, Max von Neumann was an intensely practical man. A successful banker, he attained the kind of wealth that allowed

him to purchase an honorary title (hence, the “von” in his name) and become a solid member of the fin de siècle Budapest bourgeoisie that

wielded influence in the latter days of the Austro-Hungarian empire.

His son Johnny, however, was a different breed. An exceptionally bright young man, who published his first academic paper at the age of 17,

wanted to be a mathematician. Afraid that his son was consigning himself to a life of poverty, Max did his best to dissuade him, even enlisting

luminaries such as Theodore von Kármán to his cause.

In the event, everybody was so impressed with young Johnny’s talents that a compromise was reached. The boy would take two degrees, one

in chemical engineering and one in mathematics, but he proved both so clumsy in the lab and so adept with numbers that the world would

come to know John von Neumann as a mathematician.

Perhaps to his father’s ultimate astonishment, one of his most lasting triumphs came from a paper he wrote in 1928 at the tender age of 25. It

was a theory of games.

The Ultimate Useless Place

The fates of Zworykin and von Neumann would collide thanks to the work of Abraham Flexner, who published an article in 1939 entitled The

Usefulness of Useless Knowledge, in which he recounted a conversation he had with the great industrialist George Eastman.

He asked Mr. Eastman who he thought was the man most useful to science, to which Eastman replied that he felt it was Marconi, the inventor

of the radio. Flexner then argued that Marconi’s invention was inevitable, given the work of Maxwell and Hertz, who discovered the basic

principles. Further, he argued that these men were driven not by practicality, but merely by curiosity.

Flexner went on to describe an institution he was building at Princeton, called the Institute for Advanced Study, where minds like von

Neumann as well as Albert Einstein, Kurt Gödel and many others, could pursue any subject they liked in any manner they chose, without any

responsibility to teach or publish.

It was there that von Neumann utilized a later version of Zworykin’s vacuum tubes, by then embellished by his protege Jan Rajchman, into a

computer that could store programs. This arrangement, now known as the von Neumann architecture, is the standard for just about every

computing device in the world.

Who Really Made the iPhone?

If Abraham Flexner and George Eastman had the same conversation today, there is no doubt that they would have discussed not Marconi, but

Steve Jobs who is the most prominent architect of today’s technology. Amazingly, he has done it with exceptionally low investment in

research and development.

However, as I’ve argued before, Jobs was more of an artist than an engineer. He didn’t really invent technology, but rather revolutionized the

way we used it. He was, in effect, the “last mile” of innovation. He took the discoveries of others and created products with a soul. No small feat,

but certainly not the whole story. Not by a long shot.

The origins of computing and, therefore, the iPhone as well, lay in very much the kind of activity that Flexner described: Mathematicians,

logicians and physicists pursuing the objects of their fancy, with no thought to their practical use. The principles they established were

eventually made useful through the efforts of more practical men, such as Jobs and Marconi.

Innovations, then, are not mere products, but rather form an ecosystem which makes products possible.

The Innovation Ecosystem

The term “innovation,” in fact, is a poor attempt to describe a wide range of activity. To clear things up, I developed the innovation

management matrix, which you’ll find below. The basic principle is that to develop a workable approach to innovation, you need to ask two

questions: How well is the problem defined and how well you can define who can solve it?

The problems that consumed Flexner (for which he designed the Institute for Advanced Studies to pursue) were not only poorly defined, but

also involved expertise that was too new to have a clear definition. Other innovations, like the discovery of DNA, are well defined but require

some crossing of domains to solve them.

Large institutions like Apple tend to excel at sustaining innovations, in which both the problem and domain are well defined, but are often taken

by surprise by disruptive innovations, which are products with no clear business purpose. For example, both Google and Netflix tried to sell

early to market leaders, but couldn’t. The established firms, Yahoo and Blockbuster, just didn’t see the value in them.

However, it would be a mistake to view each form of innovation as a separate entity. Breakthrough innovation comes into play when basic

research has run its course. Sustaining innovation becomes possible when basic principles are well understood. Disruptive opportunities open

up when sustaining innovation overshoots consumer needs.

And so, while every organization finds itself more adept in one part of the innovation ecosystem and less adept in others, there must be an

awareness of the entire organism. After all, even the greatest achievements of practical men are born out of the dreamer’s pursuit of useless

things.

image credit: neurope.eu

Greg Satell is an internationally recognized authority on Digital Strategy and Innovation. He consults and speaks in the

areas of digital innovation, innovation management, digital marketing and publishing, as well as offshore web and app

development. His blog is Digital Tonto and you can follow him on Twitter.

10 Tips on Making Executives Understand Innovation
Posted on March 4, 2013 by Stefan Lindegaard

What can executives do to lead their business units and the

company as a whole to become more innovative? How can

they innovate on how the company innovates? What can

corporate innovation teams do to better educate their

executives on innovation?

A key thing is that many executives might understand the

issues related to these questions, but they lack simple,

practical advice to make things happen.

I am working on a list of such advice. Here are my starting

points. It is work in progress and your input is highly

appreciated.

• Meet the corporate innovators. Corporate innovators not only have external issues to deal with. Internal bureaucracy and power-struggles

can be just as difficult. Executives can really make a difference on the latter if they have a better understanding on what is going on. They need

to talk more with corporate innovators in order to understand their issues. They also need to talk with the middle-managers as they are often

the key to solving these issues.

• Get personally committed. Find a group of people and get personally involved in what they are doing. Help them remove their barriers for

making innovation happen. This is a natural next step after meeting the corporate innovators.

• Expand the horizon. Have the innovation unit develop a learning curriculum (collection of articles and blog posts) that is relevant for the

innovation issues in the company. Spend at least one hour a week reading and working with this material.

• Maintain the overview. Once executives have gotten a better understanding of the innovation efforts, capabilities and issues in the company,

they should organize – or at least attend – frequent meetings aimed at helping them maintain this overview.

• Create a learning culture. Launch and/or support initiatives that lead to more experimentation and appreciate failure as a part of learning.

Executives need to accept that they sometimes need to let go of things in order to create the right conditions for innovation to flourish.

• Become a better networker. You cannot have a strong innovation culture without a strong networking culture. Executives can lead the way

and show that they are good networkers. This can be defined as having a strategy/purpose (explain to others why you network), an

understanding of the right tools (network physically as well as virtually) and a willingness to invest in this (networking takes time).

• Go beyond the usual suspects. Executives have a tendency to select the usual suspects when they need to get important things done. They

are most often people with a strong track record of creating results within the company. However, innovation is more unpredictable and not

business as usual. Different perspectives are needed to succeed. Look beyond the usual suspects and be willing to take some risks.

• Break down corporate rules and procedures. Any company of a certain size needs rules and procedures to make the big machine function

well. However, these rules and procedures often hinder innovation. Occasionally, executives need to take a look at them with the purpose of

understanding their impact on innovation and change them if needed.

• Ask more questions. Be more curious. Executives can develop a set of questions that can help them develop a better understanding of

innovation. Ask them frequently at different meetings.

• Check if you are on track. Define a simple set of metrics that can help executives know whether they are moving in the right direction.

Let me know what you think of this and please add your own suggestions on how executives can become even better at innovation.

image credit: job interview image from bigstock

Stefan Lindegaard is an author, speaker and strategic advisor who focus on the topics of open innovation, social media and

intrapreneurship.

Error Doesn’t Matter, Trial Does
Posted on March 2, 2013 by Mike Shipulski

If you want to learn, to really learn, experiment.

But I’m not talking about elaborate experiments; I’m talking

about crude ones. Not simple ones, crude ones.

We were taught the best experiments maximize learning,

but that’s dead wrong. The best experiments are fast, and

the best way to be fast is to minimize the investment.

In the name of speed, don’t maximize learning, minimize the

investment.

Let’s get right to it. One of the best tricks to minimize

investment is to minimize learning – learning per

experiment, that is. Define learning narrowly, design the

minimum experiment, and run the trial. Learning per trial is

low, but learning per month skyrockets because the number

of trials per month skyrockets. But it gets better. There’s an interesting learning exponential at work. The first trial informs the second which

shapes the third. But instead of three units of learning, it’s cubic. And minimizing learning doesn’t just half the time to run a trial, it reduces it by

100 or more. It’s earning to the hundredth power.

Another way to minimize investment is to minimize resolution. Don’t think nanometers, think thumbs up, thumbs down. Design the trial so the

coarsest measuring stick gives an immediate and unambiguous response. There’s no investment in expensive measurement gear and no time

invested in interpretation of results. Think sledgehammer to the forehead.

A third way to minimize investment is to evaluate relative differences. The best example is the simple, yet powerful, A-B test . Run two

configurations, decide which is better, and run quickly in the direction of goodness. No need to fret about how much better, just sprint toward it.

The same goes for trial 1 versus trial 2 comparisons. Here’s the tricky algorithm: If trial 2 is better, do more of that. And the good news applies

here too – the learning exponential is still in play. Better to the hundredth power, in record time.

I don’t care what norms you have to bend or what rules you have to break. If you do one thing, run more trials.

But don’t take my word for it. Dr. Seuss had it right:

And I would run them in a boat!

And I would run them with a goat…

And I will run them in the rain.

And in the dark. And on a train.

And in a car. And in a tree.

They are so good so good you see!

Mike Shipulski brings together people, culture, and tools to change engineering behavior. He writes daily on Twitter as

@MikeShipulski and weekly on his blog Shipulski On Design.

6-Step Blueprint to Build Innovation Momentum
Posted on March 4, 2013 by Stephen Shapiro

The question I get most often from my Fortune 500

clients: “How do we create a culture of innovation?”

Although there is no simple answer, here’s a blueprint

I’ve found useful to get things started and build

momentum.

1. Ask employees for ideas – Most organizations start

here with the corporate suggestion box. Let’s call it

idea-driven innovation. This step is useful for getting

people engaged. It also helps capture low hanging fruit

and incremental innovations. However, after a period of

time, the ideas become less practical and less

valuable. The “noise” (low quality ideas) increases. And sadly, even the good ideas often have a difficult time finding a home (sponsor, owner,

funding, resources), so they wither on the vine.

2. Ask top execs for their most pressing challenges – We now move from idea-driven innovation to a more useful approach: challenge-driven

innovation. Find the people with money, power and resources in your organization, and ask them for the most important challenges that they

need solved. Don’t call it innovation. Think of it as problem solving. This step gets the executives engaged as they start seeing direct value.

3. Ask employees to solve these challenges – Once you’ve identified the top executive challenges, it is now time to get the employees

working on finding solutions. This is done via internal crowdsourcing. Instead of asking everyone for their suggestions, ask them for solutions.

This keeps them engaged, reduces the noise, and provides a much higher ROI.

4. Ask employees to identify challenges - This step is designed to get everyone to realize that the mantra, “Don’t bring me problems, bring me

solutions,” is wrong. Teach employees that if you bring bigger and better problems, there are many ways to find better solutions. Ask

employees to submit good challenges. This steps requires proper education/guidance to avoid being inundated by poorly defined challenges.

5. Go externally for solutions to challenges – Use alliances, outsourcing, and external crowdsourcing/open innovation as a means for

discovering solutions to exceptionally pressing solutions. Or use “tech scouting” in order to find off-the-shelf solutions to meet needs of less

strategic challenges. Some organizations do this earlier in the process, starting here before asking employees for solutions.

6. Go externally for identifying challenges – Most organizations struggle to identify the right challenges. They are too close to the business

and therefore have reduced peripheral vision. Therefore, it is useful to partner with trend monitoring organizations, universities, think tanks,

and experts to help identify the challenges that might be in the organizational blind spot.

This process is not sequential. Some steps are done in parallel at times. And sometimes they are done in a different order.

If your objective is to accelerate the way you innovate, this model is extremely useful. You will find that less time is spent on innovation with

better results.

image credit: bigstockphoto.com/vector-lcd-monitor

Stephen Shapiro is the author of five books including “Best Practices Are Stupid” and “Personality Poker” (both published by

Penguin). He is also a popular innovation speaker and business advisor.

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Innovation Excellence Weekly - Issue 23

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