http://www.fastcompany.com/3002324/how-successful-companies-sustain-innovation
Innovation is widely regarded as the single most important ingredient
in today’s economy. But innovation as a destination isn’t enough.
Sustained innovation is a high-productivity state in which an
organization strives to innovate in all aspects of its business,
including management, divisions, operations, customers, and suppliers.
It requires a seamless, structured management approach that begins with
board- and CEO-level leadership and connects all the way through
technology investment and implementation. Above all, sustained
innovation is a journey, not a destination. The enterprise doesn’t stop
innovating after attaining one goal; it’s engaged in a continual process
of reinvention, invention, and discovery.
Consider the following three examples:
• The one-hit wonder: The smartphone market is
red-hot, with Apple and Samsung engaged in the most fierce race for
dominance via product innovation. But let’s not forget the once
ubiquitous handheld of choice for most employers and business people:
the BlackBerry. A mere five years ago, Research In Motion was one of the
most celebrated technology companies in the world, as the BlackBerry,
or “CrackBerry” as it became known, led the smartphone market. But the
meteoric rise of the iPhone and Android devices has made R.I.M. and its
big innovation a relic in a world of constant reinvention.
• Rising from failure: In 1919, Cornelius Vander
Starr was the first Westerner to sell insurance to the Chinese, and he
did so successfully until Communism drove him and American International
Group back to the U.S. in 1949. AIG quickly grew it business globally,
and in 1962 Starr gave management of the company's slowing U.S. holdings
to Maurice R. "Hank" Greenberg, who revitalized the company by moving
from personal insurance to high-margin corporate coverage and selling
through independent brokers rather than agents to slash those salaries.
The company went public in 1969 and continued to thrive until 2005, when
AIG became the high-profile subject of fraud investigations by the
Securities and Exchange Commission, U.S. Justice Department, and New
York State Attorney General's Office. Greenberg was booted amid an
accounting scandal in February 2005 and the company was battered by a
liquidity crisis when its credit ratings were downgraded below "AA"
levels in September 2008. Thanks to government bailouts in 2008 and
2009, AIG has bounced back and regained its status as a vital American
multinational corporate titan. AIG isn’t taking its rescue for granted.
The insurer unveiled a new corporate logo as part of a major rebranding
overhaul aimed at its continued growth and success.
• Ongoing success: Pfizer, the world's biggest
pharmaceutical company by revenues, constantly develops blockbuster
medicines and vaccines with household names like Zithromax, Lipitor, and
Viagra. Founded in 1849 as a manufacturer of fine chemicals, Pfizer's
discovery of Terramycin a year later launched its successful and ongoing
expansion into a research-based pharmaceutical company. The drug maker
has augmented its research by building its brands, pipeline, and profile
through a series of major acquisitions. The company continues to lead
the market with treatments for myriad maladies. Last month, the U.S.
Food and Drug Administration approved Pfizer’s Bosulif, which treats a
rare type of leukemia that usually affects older adults.
3 Principles for Sustained Innovation
Sustained innovation is powered by people who come together to share
ideas, compare observations, and brainstorm solutions to complex
problems. Enterprises with a strong focus on sustained innovation share
three common principles that act as the glue binding people together in
productive collaboration. They are:
1. Converged disciplines: Ideas aren’t isolated; they’re celebrated
in groups that enable the entire organization to act as one entity. Of
particular importance is the convergence of business and technology
management to ensure that no one unit or division is missing the
opportunity to capitalize on new ideas and possibilities.
2. Cross-boundary collaboration: No enterprise operates in a vacuum.
Every manager, employee, and contractor potentially has a piece of the
puzzle to create a new breakthrough business opportunity. Suppliers,
partners, distributors, and customers are an equally valuable source of
information and ideas.
3. Innovative business structure: Not every organization can empower
an unstructured development culture like the Lunatic Fringe who led
innovation at groundbreaking tech pioneer Texas Instruments; most
require structure that compels convergence of disciplines, management,
and operational units.
To bring these principles to life, enterprises operating with
sustained innovation focus on three distinct, intimately related
practices that require business/technology/management convergence to
perform at a high level of organizational maturity.
Sustained Innovation Playbook
Designing and operating organizations capable of sustained innovation
requires a playbook that demands a systemic process constructed around
the following core steps:
• Listen broadly for ideas through vision, innovation, and external
networks. Listen to the customer. Listen to the front lines in your
organization.
• Understand who your actual and potential customers are, what they want
and need, what they will need, and why those needs have not yet been
met.
• Organize the innovation team to include those with a stake in the
innovation, organize the innovation program, and organize the resources
and investments needed to address the problem.
• Create an environment and capability for innovation by giving the team
the ability to fail. Create many alternative solutions by leveraging
the cascaded innovation lifecycle.
• Experiment and learn from failure. Conduct many experiments in
parallel, using prototyping and other iterative, feedback-driven
techniques.
• Listen again to the customer to help them imagine. Use prototypes to
elicit feedback. Listen to customer acceptance/buying criteria. Listen
to what could go wrong, but don’t let the devil’s advocate take control.
• Design the concepts to address customer-centric values, such as cost, intuitive use, ease of change, and sense of enhancement.
• Implement the final go/no-go decision. Consolidate or eliminate
competing alternatives to a manageable number. Send concepts back for
reinvention, retesting, or redesign. Implement the second stage of the
innovation lifecycle: manifestation
.
Get Out of the Garage
Sure, some people work better alone. But most people are more prolific
as part of a team or extended community of ideas and talents that
fosters some of the world’s most important inventions. Garage inventors
can’t possibly compete with myriad breakthroughs born from sustained,
systemic innovation. The first single chip microprocessor publicly
introduced by Intel in 1971, the first car safety air bags offered in
the 1973 model Chevrolet, and the depression game changer drug Prozac in
1988, are all considered great innovations developed and perfected by
teams, not individuals. Even Oppenheimer needed the Manhattan Project
team to create the atomic bomb. The true test of sustained innovation
isn’t the invention itself, but the ultimate and ongoing benefit
produced by the innovation for the business.
Discipline and innovation are not opposites, but complements.
Establishing an innovation culture consumes a great deal of
organizational energy in overcoming the forces of inertia and entropy.
But once an idea has been successfully commercialized, respected
champions emerge to drive new sources of the energy, creativity,
discipline, and resources that sustain and grow an enduring culture of
innovation. Successful organizations manage innovation from concept to
commercialization so that good ideas not only get created, but also
continually find their way into the products and services portfolio.
--Faisal Hoque is founder, chairman, and CEO at BTM Corporation and founder of research think tank BTM Institute. His newest book is The Power of Convergence. Follow him on Twitter @faisal_hoque.
