Discussion Point How Can Your Company Innovate Faster

Discussion Point: How Can Your Company Innovate Faster?

8 minute read
Tom Murphy avatar

Every business dreams of doing things things differently, uniquely, innovatively. But how can businesses best achieve innovation?

Some prescribe a cultureof innovation. Some want to teachinnovation in schools. Some suggest hiringinnovators. Still others linkinnovation to agility. And they all may be right.

However, in a competitive world where everyone is trying to innovate, it's alsocritical to innovate faster than the competition.

The Question

How can companies innovate faster than their competitors?

The Answers

Solomon N. Darwin, University of California Berkeley

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Darwin is Executive Director of the Garwood Center for Corporate Innovation at UCB's Haas School of Business. Before joining the center in 2005, he was an associate professorat theUniversity of Southern California. He has taught innovation at Google, HP, Genentech andother companies. He also has held visitingpositions at the Indian Institute of Management, the Universityof Science and Technology in China, Lancaster University in the UK, theUniversity of Zurich and other universities.Tweet to SolomonDarwin.

The course I teach here is called OpenInnovation. Because the product lifecycles today are shorter and the speed tomarket is faster, open innovation facilitates the process much more quickly.

Companies that practice open innovation are able to sustain better businessmodels in today's economy.

Mainly we work with companiesthat are in the dying stages, meaning they have matured their legacy companies. They are dinosaurs and they cannot make U-turns very fast. They cannot adaptquickly, because they have too much legacy, or too much infrastructure built on old business models. Today's businessmodels are muchlighter.

What made America great in history was closed innovation. Closed innovationis the knowledge created when R&D was generated. We held it as an asset onthe balance sheet. We put a hedge around it and a fence around it and we put itin a fortress to protect it.

That happened during World War I, World War II andthe Cold War because we didn't want people to have access to our knowledge. 

But things have changed now. The Internet came in with globalization.Knowledge is free now. Knowledge flows from high to low at incredible speed. Sopeople in India and China have access to the same knowledge flows that you andI do here in the United States.

People around the world are innovating. Thecompetitiveness has increased tremendously because people came up with businessmodels that are much better, and the margins are going away. 

The best way toovercome that is to build bridges. What we believe is to participate in theknowledge- flows. That means as the knowledge is created, we share it forstrategic advantages and we also accept new knowledge from other people, becausenot all the smart people work for you.

We need to createprocesses through which the outside knowledge flows in and the knowledge youcreate flows out. We create a strategic advantage by building bridges to build an ecosystem in which we are faster at collaboratively delivering productto the market as the product lifecycles become shorter and shorter.

Jeffrey Baumgartner, Innovation Author and Speaker

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Jeffrey Baumgartneris the author of the books Anticonventional Thinking, The Way of the Innovation Master and The Insane Journey. When he is not writing, he runs workshops and gives keynote speeches on creativity and innovation to companies, governments and non-profitorganizations as diverse as Toyota, Canon, PepsiCo, Genentech, Coldwell Banker, Thai Danu Bank,the European Commission and the government of Dubai. Tweet to JeffreyBaumgartner.

There are two things companies can do to innovate faster. They can speed up the development of ideas and they can speed up approval and implementation processes. Let's look ateach, starting with faster development of ideas. 

Many organizations use traditionalbrainstorming, ideas campaigns and similar ideation methods that aim to generate as many ideas as possible and then leave it to a manager to choose a“best” idea and arrange for it to be developed. This is a highly inefficient approach that is also not terribly creative.

Instead of spewing out lots of mostly mediocre ideas, why not try an approach that leads to the development of a more comprehensive model or creative vision.

Events in which teams construct ideas with Lego bricks, building blocks or craft materials result in a single model. Anticonventional thinkingtargets the development of a single creative vision in a session.

Now, let's look at creating a faster approval and implementation process.In too many organizations, a creative concept must jump through numerous approval hoops before it can be developed. At each hoop, the concept can be rejected, but only at the final hoop can it be approved and developed further. 

Learning Opportunities

Rather than have committees ponder ideas, let engineers, technicians or product developers start testing and implementing ideas as soon as possible. If one does not pan out, kill it and work on another one. After all, the best way to evaluate a concept's potential is to build it.

Scott Anthony, Managing Partner, Innosight

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Over the past decade, Anthony has advised companies such as Procter & Gamble, Johnson & Johnson, Kraft, General Electric, LG, the Ayala Group and Cisco Systems on growth and innovation. Healso has experience in India, China, and the Philippines. Anthony authored the book, "The FirstMile" and is co-author of the Harvard Business Review article "Build an Innovation Engine in 90 Days."Anthony holds a BA in Economics, summa cum laude, from Dartmouth College and an MBA with highdistinction from Harvard Business School, where he was a Baker Scholar. Tweet to Scott Anthony

The key to innovating faster than rivals is to manage the strategic uncertainty that comes along with innovation. Every innovative idea is partially right and partially wrong, but it is often hard to figure out which part is which. 

Good innovators take the time to carefully document what it is they hope to do, carefully separating out facts from assumptions.

They evaluate the evidence that they meet the three criteria connecting every successful idea: it targets a real need, it delivers against that need better than current and potential solutions, and the numbers work.

They then focus on two categories of assumptions: deal killers that run the risk of blowing up an idea and pivot points that shape subsequent strategic choices. Finally, they test the most critical assumptions with the rigor of a good strategic scientist.

You never know what will happen when you experiment, but you always should have HOPE. Start with a hypothesis about what you expect to happen. Then design an experiment that has clear objectives. Make a specific prediction about what will happen.

Execute in a way in which you can clearly measure your prediction. It doesn’t actually matter if you are right or not, the goal is to create the opportunity to learn, since every successful idea has twists and turns on its path to success. Learn efficiently and effectively, and you’ll speed through the treacherous terrain of early stage ideas.

Nick Skillicorn, CEO, Improvides

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In addition to his role at Improvides,Skillicorn is an author,TEDx speaker and an expert in getting companies to generate special ideas and turn them intoinnovations that customers love. He was chosen the No. 7 innovation blogger for 2014 byInnovationExcellence.com.Previously, he spent more than seven years as a consultant for the Program Leadership group at Deloitte UK, where he worked in program management for large scale transformation projects.Tweet to Nick Skillicorn.

There is only one reason to innovate: to provide a solution that adds value to a customer.Constantly improving the value offered requires ideas that are different to what has worked previously.

They won’t come from a brainstorming session,which usually produce low-risk variations on ideas people know already work.Instead, this requires people to be given license to push past their comfort barriers into unknown territory.

The problem here is that these ideas are certainly going to be imperfect initially, and require some time, effort and budget to be experimented with, prototyped and thenrefined. And they may still fail. This lack of guaranteed success is why they are often rejectedby management.

How can you trial these ideas faster and reduce risk? You can reduce bureaucracy and increase speed by having a budget pool available for experimentation and prototyping,a pool from which anyone with an idea can draw, getting something like $1,000 and one month to produce a very crude prototype.

There would be a panel of five to 10 decision makers that the person suggests their idea to, and as long as one person thinks it could have future potential, the person would get the money to experiment. Even with a limited budget and timescale, you’ll be amazed what individuals can produce when given freedom and support.

Many of these risky ideas will fail early (in that month or shortly afterwards).

But if you invest in 100 risky ideas and let them fail early, cheaply and quickly, and iterate on the few remaining ones with promise, you’ll get to several refined ideas much faster and more cheaply than investing in “safe, low-risk” innovationsthat have a 96 percent chance of failing.

Title image by Asa Smith Aarons/all rights reserved.

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