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Innovate This!

Have we had enough innovation yet?

Probably not. That buzzword still drives a lot of business (and political) thinking. Rod Adner, author of The Wide Lens: A New Strategy for Innovation, points out that every year “vast amounts of money, time, attention, and effort are spent to introduce productive change.” Innovation, these days, is the convenient answer to everything.

How can we increase profitable growth? Innovate! How can we become more efficient and reduce waste? Innovate! How can we improve loyalty and increase customer satisfaction? Innovate!

With all that innovating, you’d think we’d be farther along, as individual business owners and as a country, in growth and prosperity. The problem, according to Adner, is that successful innovation “remains the exception rather than the rule.” What happened?

Companies fail at innovation (and at the bottom line) when they mistakenly think that innovation alone is all it takes. Great ideas go nowhere without the right conditions to make them catch on. It sounds simple enough, but standing in our way are two different types of surprises, “the ones we couldn’t have seen coming and the ones we should have.”

It reminds me a bit of something my father once told me: there are two types of excuses people use when something goes wrong. One begins with, “I thought.” The other begins with “I didn’t think.”

Fatherly wisdom aside, thinking (and not thinking) are the roots of many business problems. In the case of innovation, the thing we don’t think about is whether the world is ready for our great new idea. In other words, the most innovative widget in the word won’t succeed if the things that widgets go with, or need in order to function, don’t also exist.

In 1992, Michelin “reinvented the tire” – their new PAX System would run, even if punctured, without sacrificing driving performance – a big boon for road safety. The research also seemed favorable. At the time, 60 percent of U.S. drivers had suffered a flat tire over the previous five years. The auto service industry seemed enthusiastic; predictions were that by 2001 the PAX system would take off.

What Michelin hadn’t considered was how much their tires depended on a lot of other people and industries. One of the benefits of the new tire was that it allowed for extra space inside cars – you wouldn’t need a spare. The tire functioned safely and reliably until you got to the service station. To really capitalize on that meant changing car designs. That also meant convincing car manufacturers, long before the new cars (featuring more space), were designed. Success also relied on car dealers and service garages to revamp their businesses. Garages would need new equipment to handle PAX system tires. Car dealers would have to add the tires as a standard feature. In other words, success of Michelin’s innovative design depended on complete “ecosystem reconfiguration,” which, Adner observes, “is at the heart of every new value proposition that breaks” the industry mold.

Successful innovation these days takes thinking about systems as a whole to see where particular products or ideas fit in. It means collaborating in a world that is increasingly dependent on what happens elsewhere in the system. Adner considers the example of customized streaming video as a value-added service to attract customers. You need a smartphone, of course. But, you also need video conversion software to reformat images. You need database and router innovations, digital rights management solutions, and… need I go on? Without other innovations, your idea or product is unlikely to succeed.

Solving these problems takes an “ecosystem approach” – taking existing pieces and reconfiguring them for success. Adner’s list of fundamental questions helps uncover configurations that eliminate blind spots (caused by the two kinds of surprises noted above).

Adner also provides a wide range of examples and data that demonstrate both successes and failures brought about by innovation. There is no shortage of great ideas in the world (I’ve had at least 22 since I started writing this review). But great ideas won’t take you anywhere unless you’ve thought far enough ahead to make sure there are enough other innovations in your ecosystem to take you there. FBN

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