“94% of executives are unsatisfied with innovation performance”. Yet “84% see innovation as important to growth”! Whilst “54% of companies struggle to bridge the gap between innovation and business”. Worse; “very few executives know what the problem is and how to fix it”!
This is the innovation problem.
Unfortunately, we end up performing a lot of innovation theatre. We drive a lot of innovation activities. These make us - innovation officers, sponsoring executives, and those involved - initially feel great. But these activities risk resulting in little tangible output.
We don’t appreciate how inefficient “ideas-first” approaches are. We get misalignment with strategy, poor quality, miscommunications, ideas we can't execute and so on.
Yet we pat ourselves on the back, saying this was fun, telling shareholders that we are innovative. And of course, innovation is hard isn't it - we'll get those tangible outputs eventually!
At the same time, we cling to an outdated view of value. Where we feel we embed value as we create goods, design services. And that customers obtain that value when they buy our product (this is known as value-in-exchange). Our focus becomes that point of exchange. And we risk becomming yet another product launch failure; missing customer needs altogether.
Our innovation theories, as well as approaches, are developed from observing manufacturing industries decades, if not centuries ago. Yet our economies are service economies.
And we have forgotten the basics, that have been known for decades. That “the firm has two, and only two activities: marketing and innovation” (Drucker, 1954). And that “people don’t want to buy a 1/4 inch drill; they want a 1/4 inch hole” (Levett, 1975).
No wonder McKinsey found 94% of executives are unhappy with innovation performance.
This is the work in progress on this site. I believe we can fix the innovation problem. And to do so, we just need to think differently about:
This is the innovation solution.
And it is based in using a service-dominant logic lens to see the world. Along the way we find a natural home for modern theories such as Christensen's Jobs-to-be-done, Kim & Mauborgne's Blue Ocean, agile approaches and more. And, we minimise marketing myopia. Systematically search for growth. And address the circular economy as an obvious part of value proposition.
At the base, we need a better view of value.
One based around progress - sought, proposed and achieved. Not amount of cash we can get.
Removing the standard value-in-exchange moment from our logic opens up relational approach that sees beyond a sale.
From a better view of value we can build a new, actionable, definition of innovation.
In short offering something that helps beneficiaries make functional and non-functional progress better than they can currently.
We are still standing on the shoulders of innovation classics. But based on improving value (progress proposed) as well as addressing aspects we often miss, such as innovation resistance and ecosystems.
Together with our service-first view we can now build tools to:
We need to fix our enterprises so they are innovation-first. Innovation as a bolt on, is a contributor to the innovation problem.
To paraphrase Drucker from many decades ago:
a firm only has two functions, one is innovation.
We can use our new definition of value to understand what an enterprise is.
And then build the operating system appropriately. It is agile in nature (you might call this business agility), and constantly developing new ways to help its beneficiaries make progress.
The other function of business, according to Drucker? Marketing - and that function needs to drive finding what progress beneficiaries are trying to make.
Everything else, Drucker sees as a cost. Lets be more generous and see them as survivability supporting functions.
Beyond reading my articles individually, I've collected some of them together as journeys. Each journey addresses a specific topic as you'll see below.
I've been a Chief Innovation Officer on the front line and experienced first hand the challenges of creating and setting up an innovation initiative in a global account. I have suffered the highs of getting 20+ innovations into an innovation pipeline; only to find getting traction and tangible results a challenge.
So I took some time out, went to the fantastic Business School at Imperial College London to delve into an MBA. My thinking was to get a broader view of business and uncover some clues to this innovation problem. And there, I found some hints in the form of service-dominant logic.
So, on this site I'm following that rabbit warren all the way down to build up how we can fix the innovation problem.
"Continuous improvement is better than delayed perfection"