Doing disruptive innovation
Elsewhere we’ve written about the important role training plays in helping teams become more efficient. Efficiency and culture norming aren’t the only reasons to train. It’s abundantly clear that the hardest part of innovation today is the disruptive kind.
Companies no longer survive just by cranking out line or brand extensions. That’s Clay Christiansen’s point in framing the “innovator’s dilemma” (well summarised here.) Statistics tell a plain tale: market leadership isn’t the long-lasting success guarantee it once was. Thanks to the profit potential in effective disruptive innovation, being on the top today doesn’t mean in another decade your firm will be anywhere on the map. Think: Blockbuster, Encyclopedia Britannica, Kodak, Tower Records, Woolworth in retail, Digital Equipment Corporation (DEC) and Wang Laboratories in IT.
The slippage in the good standing and good fortunes of one-time leaders isn’t simply about stock market prices. It’s also about customer loyalty. A study late last year published by MIT’s Sloan School describes the psychological dynamics that lead consumers to seek alternatives once a company achieves dominance in a sector. Dominance breeds discontent which creates market gaps more agile, often smaller, competitors can exploit.
Gregg heard a cynic dub incremental innovation as “the purple cookie” syndrome. These are the brand and line extensions that companies doing “good enough” innovation seem to settle for.
Case in point: Kodak
Kodak was pretty good at line extensions. One researcher at Kodak invented the world’s first digital camera….in 1975. But it took well over a quarter-century for Kodak to wake up to digital realities. By then, it was too late. By the time Gregg Fraley was asked to coach a senior research executive, the train wreck was steadfastly approaching in slow motion. The researcher could see it but management couldn’t listen.
Listening would have meant taking the business into entirely new areas. It’s what MBAs call “business model innovation”. It’s what Jorma Ollila pulled off as Nokia CEO in the early 1990s. But as Nokia’s performance two-decades on attests, the magic rarely lasts.
As Christiansen describes, creative destruction is cyclical. Which means enduring commercial success requires teams and leaders to think beyond today’s cash-cows to tomorrow’s cannibals. The remit of an effective innovation team is no longer simply to create new products that fit the current business – but also to develop new products and new monetization models in current and adjacent markets.
The Business Model Canvas is one tool to help picture a new monetization model. But on its own, it does nothing to help you conceive of new models. For that, you need a team charged with looking both within and beyond your existing capabilities, product set, markets and industries for opportunities. You need a team ready and empowered to ask: “How might we…?” A team ready to judge the best answers and take them forward into formal development, prototyping and onward to market release. The answer to “How might we….?” isn’t real until the customer can grasp it, use it, embed it in their life.
Training in “the how” makes it real
At KILN, we know that business model innovation starts with asking bigger, bolder, braver questions -and we’ve created a range of products (like IdeaKeg), manuals (like FuseTrail) and training modules (like CPS and Foresight) that help you ask them for yourselves. Innovation management and StoryFORMs help you understand the decision-making styles within your firm and speak to that listening when you ask for buy-in.
The most effective innovation teams are diverse. Yet the team also needs to integrate across silos, commercial borders, even national cultures. Structured, facilitated conversations and the smart use of appropriate IT/idea management systems make this possible.
But all the infrastructure in the world won’t work, without creative innovation training as the necessary accelerant.