Trekking Off the Map

Lots of folks talk about having an innovation strategy and it seems all the rage with the media and the politicians. But as the old saying goes talk is cheap. Pursuing a strategy of innovation can be hugely rewarding on a number of fronts, but it takes more than words. Innovation is hard, expensive, and requires a willingness to travel off the map.

Innovation is about the application of new concepts, be it a technology, process, technique, or strategy toward some meaningful end. With this definition in mind, think briefly about your and your organization’s innovation strategy. Are the objectives clear? Do you know why you are trying to innovate? Do you know what you are going to innovate and how you will do it? Do you know what success looks like? Do you have a good understanding of what the investments are required in both time and dollars necessary to achieve those objectives? Are those objectives and tactics documented and measureable? Have you got a ‘real plan’ that you can actually communicate and share?

These are critical questions. How you answer them tells much about your understanding of innovation and how capable you are of leading such a strategy. There are two fundamental principles that I use to judge the efficacy of an organization’s innovation strategy.

First Tenet of Innovation Leadership: If your strategy has no meaningful end in mind, no purpose beyond exploring for curiosity sake, you are NOT innovating. Innovation is fundamentally practical in nature. It is about the application of new ideas to real problems. People often confuse innovation for invention. They are very different beasts. Invention is about conceiving new ideas. Innovation is about applying them.

So why does all this matter in a business context? Well, when most organizations speak to their innovation strategy, they speak to their R&D efforts - the new technologies, products or processes they are developing. But this misses the point. It is not about what you are inventing. It is about the problem you are solving. Without a real problem, there can be no innovation. I don’t care how big your R&D budget is, without it aimed toward a real and practical problem it isn’t innovation. Consider these great innovation of yesteryear.

• The number zero was adopted by the because simple addition and subtraction was insanely painful without it
• The steam ship was adopted because ocean going sailing ships were too large and cumbersome for the Mississippi river
• Computers created to break encryption codes during WWII because it was going to take a bizillion years to do it with slide rules
• The internet was created so the department of defense could share and distribute information in the event of war
• And the smart phone was invented because people grew tired of actually talking to each other

All of these innovations came about because there was a real and pressing need. There was a reward for solving the problem. Often (actually always) the reward and problems ultimately solved were far greater than originally envisioned, but the key is that the problem came before the solution. Therefore, I would argue that first tenant of innovation is that it must have a practical purpose.

Second Tenet of Innovation Leadership: Think again about your organization’s innovation strategy. Do you have a clear and executable plan? Assuming you have a meaningful end in mind, do you know how you’re going to get there?

Here is the thing: If your strategy and plan is clear, you are not leading. It’s only clear because somebody has gone before you. And if somebody has gone before, you are following, not leading. That's not necessarily a bad thing. There are times to follow. But we are talking about innovation. The implication is that all or part of the path ahead must be forged rather than followed. There is no recipe. No guidebook.

Innovation necessitates breaking new ground. It requires going into uncharted areas. Certainly, there are degrees of newness. Is it new to you? New to your organization? New to your market? New to the world? But fundamentally there is something new involved. And that newness means that the path to success is fuzzy. And with that fuzziness comes our old friend risk.

• Statistics show that about 95% of new products are commercial failures
• It took Edison a thousand tries before his light bulb worked
• When the first atomic bomb was exploded, scientists were not sure if it would ignite a chain reaction that would destroy the universe
• For every 10 investments, the typical venture fund only makes a return on 1 to 2 of them
• And Apple had to take a loan from Microsoft to avoid bankruptcy in the 90s

Risk is an essential and inescapable element of innovation. Different organizations have different appetites for risk. And there is a big difference between risk management and risk avoidance. If your organizational bias is toward risk avoidance, an innovation strategy is likely not for you. You can manage it. You can mitigate it. But you cannot avoid it.

So here we have it: the two sides of the innovation coin – The REWARD of achieving something new measured against the RISK of going down an unknown path. Risk and Reward. What could be simpler than this age-old business equation? Well, there is nothing simple about it. Risk and reward are simple when you can see the opportunity, and ideally quantify the two sides of the equation. The problem with innovation is that both sides of the risk-reward equation are vague and fuzzy. In fact, some component is simply unknowable because you are breaking new ground with new processes, new products or new business models in search of new and emerging markets. Before you can measure, quantify, access or penetrate emerging markets, you must discover them.

That’s right, discover. If there is one word that best describes an innovation strategy it is DISCOVERY. There is no map to where you are going - no GPS system that will direct you to you objectives. You need to forge your own path.