I've come to the conclusion that the core characteristic that separates companies that get innovation from those that don't is a simple word: curiosity.
The CEO should ask what he or she can do to raise the organization's curiosity quotient. One way to do this is to seek to learn more about current or prospective customers, not to figure out which segmentation model to slot them into, but to really understand them as human beings. Another is to live at the intersections where innovation magic occurs.
Anytime you see a constrained market, where consumption is limited to those who have special skills or are wealthy, that signals an opportunity for innovation.
Teams working on disruptive ideas need to be small enough that they can be fed by no more than two pizzas.
If you are a large company and you want to do something unique, you almost by definition have to tap onto the core business in some way. Otherwise you are going into a naked fight against startups, and that's just a tough place to be.
The need to be thoughtful about experiment design is particularly acute within large companies, since some of the behaviors, such as having small teams and tapping into low-cost resources to maximize flexibility, won't come naturally to many people inside huge companies.
People will try to copy what they can see, which is the final product or service, but it's much harder to see (and copy) all the intricacies of the business model that allows you to create, capture, and deliver value. And that's what you need to get right to really jam something down people's throats!
The sad truth is as difficult as the first mile can be for entrepreneurs, it is doubly tough inside most large companies as innovators can face some significant headwinds.
We've got some great big problems in our world. We have to figure out how to feed 10 billion people. Too many people can't access clean water, quality healthcare, and reasonable education. We have to figure out what to do about climate change, income inequality, and more. Innovators need to rise to the challenge!
I feel for today's leaders. I really do. They got to where they are by doing a series of jobs exceptionally well. And that doesn't help them at all with the challenges they now face.
Not only do innovators have to deal with all of the fundamental challenges of innovation, they have to do so in an environment that often is implicitly hostile towards innovation.
One of the biggest mistakes leaders make is to embrace the idea of spurring creativity by letting hundreds of flowers bloom. I've never seen that lead to anything other than cynicism and hundreds of dead flowers.
Of course if you are launching a new business you can thinking about revenues, profits, and so on, but metrics such as customer satisfaction or employee retention might be meaningful if you are focusing more internally.
Most startup companies have two people, and they figure out creative ways to swarm problems. They move faster and have more impact.
You can always figure out how to deliver things in somewhat controlled situations, but when you start to get into the reality of the market you start to figure out what isn't going to work.
When we are looking at ideas, we really are thinking of three things. Are you doing something that seems consistent with the patterns of success? Are there reasons to believe you have or can access the right people to make it happen? Can we play a unique role in enabling success? We all have our rules of thumb, I suppose.
Think about how much it costs to learn more. Sometimes you want to build confidence by knocking off the easy things.
You can increase the odds of spotting the weak points in your approach if you really think about the end-to-end business model you plan to follow - how you plan to create, capture, and deliver value.
Make sure that you take the time to think about how other companies might respond to your idea, both those companies already in the market you plan to target as well as others that might imagine targeting that market.
Have a core concept, but wrap it in a full business model.
A spreadsheet for an innovative idea reports the mathematical relationship between made up numbers. You can't cash a spreadsheet.
Of course, it is worth it to take the time to think carefully through your assumptions, and ensure you at least have hypotheses around how you will create value. But use the analysis as a way to focus attention on the most critical assumptions, rather than spend a ton of time massaging the numbers.
I use the term "fool's gold white space" to highlight a common problem for innovation. People see a market that doesn't exist, and assume that one should exist.
I think people make innovation much more complicated than it needs to be.
I've never seen impeccable logic be sufficient to win both the heart and the mind.
