What is innovation?

This is the first of two blogs about innovation.  This first one considers the broad theme of innovation and sets out that it isn’t all about making major leaps forward.  It identifies how innovation is reliant on people.  The second essay will explore that aspect more deeply. 

The theme of innovation is now such an over-used buzzword that the approach to doing it effectively has drifted out of sight. Theory drowns out the practical. People look at innovation as something big organisations do and, perhaps, not do especially well. Innovation relates to massive, scene-shifting developments.  One reads about innovation causing the tectonic plates of business to shudder. 

Such magnitude 8 earthquakes occur far less frequently than most people recognise.  Most innovation comprises far smaller tremors. These should occur consistently and constantly. Without them organisations’, big and small, may see their viability and relevance to their end users diminish?

Now, as the violent tremors of Russian’s invasion of Ukraine shakes the world’s economy and confidence, innovation matters more than ever.  How does the democratic world disengage its supply-chain and energy reliance on autocratic states that care not a jot for the sanctity of life?  As in the second world war, there is both urgency and importance in developing new ways of working.  And as was seen in that conflict, innovation occurs in unexpected places like Bletchley Park, i.e., code-breaking,

and, near to where I now live, Bawdsey Manor, where radar was developed. 

The likes of HP had its genesis in a garage in Palo Alto.

The “green shoots” of innovation

In his book “Rebel Ideas”, Matthew Syed distinguishes between “incremental innovation”, i.e., James Dyson’s 5,000 attempts to develop his vacuum cleaner and “recombinant innovation” which sees ideas from different areas come together to create something new.  Syed mentions wheels on suitcases. 

From personal experience, I remember sitting with a group of people in Barclaycard after the launch of the debit card in 1987 looking at the piece of plastic and a brick sized mobile phone. It took almost three decades to combine two in a micro-finance initiative in Kenya. Now people around the planet casually wave their phones over payment terminals. During this time, I was gifted this essential guidance, “While you may wreck the prototype, you must never kill the pilot.” It is vital you know at which stage you sit on the innovation curve.

Since the end of the second world war, the German economy’s success is reliant upon incremental innovation. Japan’s work with W Edwards Deming morphed into the global Quality movement, i.e., the idea of continuous improvement. In turn, process re-engineering, Toyota’s production system and six-sigma arose as other beacons of innovative enlightenment. Germany’s incremental progression won the country dominance in motor car manufacture. It built a portfolio of premium brands acquiring the cachets of British automotive success, Rolls-Royce and Bentley. 

Motor manufacturing is one of those instances where a massive innovative jolt has disrupted the status quo; the jolt being the arrival of Tesla. This produced a volte face by German firms. They are now investing billions in catching-up and surpassing Tesla. A war of words has broken out with BMW’s leader criticising Tesla’s quality, he suggests it isn’t a premium brand. 

Looking forward, will environmental credentials out-innovate the traditional theme of developing premium brand facets and not just in automobiles? There remains a big argument to win – across its lifetime, is an electric car “greener” than a traditionally powered vehicle? Until innovation resolves what to do with all the old batteries, I see the jury is still out deciding its verdict. 

And innovation is not always about adding functionality and, possibly, complexity. The late Clayton Christensen’s work on “creative destruction” considers how innovation can simplify things.

The vocabulary of innovation

Elon Musk talks about “failing fast”.  An article I read but didn’t file talks of Audi preferring to speak about “failing slow”. The firm took over 10 years to launch its first e-vehicle, the e-tron.

This article from Sloan Management Review debates the merit of failing fast through the lens of “learning quickly”, https://mitsloan.mit.edu/ideas-made-to-matter/forget-fail-fast-heres-how-to-truly-master-digital-innovation.  And this piece concurs that failing without learning is pointless, https://www.forbes.com/sites/danpontefract/2018/09/15/the-foolishness-of-fail-fast-fail-often/?sh=64416b4459d9.

Popular terms in innovation’s vocabulary are “agile” and “lean”, http://agilemanifesto.org/principles.html helpfully explains their differences.

Innovation and digitisation

Three articles by Linda Hill were recently published by Harvard Business Review about innovating in the digital age.  Links to them are provided below.  Each warrants reading. Digitisation affects even the smallest business. Across any firm’s value chain, digitisation offers innovation gains, from restaurants using on-line reservations to hairdressers replenishing best-priced stocks with a few clicks.

https://hbswk.hbs.edu/item/leading-in-the-digital-era-where-can-digital-transformation-take-you

https://hbswk.hbs.edu/item/leading-in-the-digital-era-a-new-roadmap-for-success?cid=spmailing-34103609-WK%20Newsletter%202-8-2022%20(1)%20remainder-February%2008,%202022

https://hbswk.hbs.edu/item/six-unexpected-traits-leaders-need-in-the-digital-era?cid=spmailing-34119213-WK%20Newsletter%202-15-2022%20(2)-February%2015,%202022

The third article commences, “To transform their organizations, they must first transform themselves.” The need to “first know thyself” is paramount if you are to lead innovation successfully. It talks about being a catalyst which is an expression I dislike. If I remember my O Level chemistry correctly, catalysts initiate reactions yet do not change. If there is no change, there has been no learning, which Hill says is crucial.

We need another word; why not simply say “leader”?

Innovation is dependent upon people

There are countless strategic practices and processes relating to innovation.  Yet, at innovation’s heart lies people and their skills, knowledge, experience, and behaviours. Underlying all these observable factors sit their true selves in the nebulous form of their personalities.  There have been instances of these human qualities infusing AI code and causing those supposedly self-learning systems to go off the rails.  Microsoft has to withdraw a BOT because it starting spouting incendiary, racist remarks.  This interview with Stuart Russell portrays a potentially worrying future in which the “super intelligent machines” human innovation has created “turn on us”, https://www.thetimes.co.uk/article/60c95d96-7df3-11ec-8532-85a58274df7c?shareToken=ca7fb164a54ea244a06091ea94ea8140

Personality may explain two lines of approach in innovation according to the source of funding.  These provide different “raison d’etres”, neatly summed up in this Harvard Business Review article, https://hbr.org/2022/01/research-how-entrepreneurship-can-revitalize-local-communities?ab=hero-main-text. One is to “scale up”, the other is to “scale deep”. 

Rapid extrinsic reward motive dominates one group, a servant-leadership mindset is the stronger pulse in the other. In other words, single-minded self-centredness, or collaborative, selfless endeavour for mutual gain. 

Many leaders of large organisations claim money does not motivate them, yet have an array of people negotiating their contracts. Bernie Eccleston, the ex-supremo of Formula One motor racing, said in an interview, “Money is the only yardstick by which we can compare each other.” I find that rather pathetic.

Dan Price, the CEO of Gravity Payments, tweeted in 2021, “Stop saying ‘money doesn’t buy happiness.’ A person making $100k won’t be happier getting to $110k. But lifting someone out of poverty is the most effective anti-depressant in the world.” Dan gained fame for raising the minimum pay at his business to $75k. He avers, “CEOs don’t matter. Workers do.”

Innovation and leadership

A popular acronym concerns our living in a “VUCA” age, i.e., one that is volatile, uncertain, complex and ambiguous.  Can one person in isolation decipher VUCA? There are many examples of individuals beavering away at innovation, e.g., Edison to Dyson. Sadly, there are also far too many women whose endeavour was initially dismissed, e.g., Rosalind Franklin.  

Two brains are better than one goes the old saying, which is the central theme of Rebel Ideas. Leadership that draws together many different minds stimulates the required fresh thought and application to resolve our current and future challenges. 

In the second essay, I will mention the Change Formula which has not received the attention it deserves. It sets out simply why people resist change. For experienced leaders, these two pictures posted on LinkedIn are apt:

The second drives me to engage with as many young entrepreneurs as I can.  Northern Power Women’s mentoring campaign is a good example of drawing together novices and experienced practitioners. Each conversation I have helps me understand how they approach innovation, fuel its creative source then convert ideas into reality. It provides vital stimulus to my own thinking about effective leadership in the third decade of the 21st century.

While fresh processes and technological applications spur on the pace of progressing change, we know so much change fails to deliver its projected benefits. McKinsey’s famous “rule of thumb” suggests that 70% misses its aims. 

In the second part, I will consider the people dimension of innovation. It’s time for some Nike JFDI, burning the midnight oil, non-Russian sourced, of course. This is not time to procrastinate.

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