Inducement to Innovate Q and A
Q. What does business innovation mean to you? Is it different than technical or product innovation?
A. I like to say that it is the innovator’s day—everyone is interested in what innovators have to say during bad economic times. That’s the good news. The bad news is that we’ve turned innovation into a buzz word. Everyone defines it differently. Everybody is talking about the word, and, of course, everyone is an innovator and everything is an innovation. In fact no one is, and nothing is. But you have to get below the buzz word.
I have a very simple definition to offer. To me innovation is a better way to deliver value. It is not an innovation until it solves a problem that a customer is having—it delivers value in the real world, solves a problem and helps get a job done that a customer is trying to do. A lot of people confuse innovation with invention, and think that they just need new technology to solve a problem. But an innovation is not the same as an invention. Inventions are important, and it’s nice to have new technology, but frankly we have more new technology than we can use. We’re not short on new technology, but we are short on the ability to use new technologies to solve problems and deliver value to customers.
Q. What types of business models do you see on the horizon?
A. I am a huge believer that all leaders in all organizations need to learn how to do R and D for new business models. Think about it—they do R and D (research and development) on new products and new technology. And they need to do that for business models as well. In the 21st century, as a leader, you’re going to have to do R and D for new business models—literally experimenting with potential new business models on an ongoing basis. If you don’t, you are going to be vulnerable to being disrupted.
Q. How do people start thinking disruptively? Assuming that disruptive thinking causes change and sustainable growth, how do we go about it?
A. The first thing that needs to happen is that you have to take a customer view. We get so wrapped up in our current business models that everything we see is through the lens of the current business model. We have to change that perspective, begin to understand it through the lens of the customer instead of the lens of the current business model, and get inside the heads of our customers and see what they are experiencing and what they are trying to do. You have to begin to think creatively about new and better ways to deliver value to the customer. A perspective change is key.
Secondly, you have to be willing to experiment with different ways to deliver value. A lot of this is about experimenting and creating platforms and ways that you can play with new configurations and ways to deliver value that aren’t constrained by your current business model.
Q. Why have large companies failed to sustain innovation and what insight can you give us into the challenges that innovative companies face?
A. All companies are vulnerable to disruptive innovation. So they have to be proactive and commit part of the organization’s resources to developing ideas, prototypes. Test in the real world, give freedom and autonomy. That’s the biggest challenge for most large companies that I talk with. They do a lot in innovation space, but most of it is focused on how to make their current business model more effective—which is important—but a small part of your effort needs to be focused on potentially transformative new business models. And you need to make sure the resources are carved out to support those types of experiments as well.
And that’s the piece of work that never gets done. It’s almost always about incremental improvement in today’s business model, and almost never about discovering what the new business model is, even if it might disrupt us. I want to know, understand, be in a position to be proactive and potentially migrate from the current business model to a new one.