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Colorado Innovation Newsletter 2012 – #1

Practical, Actionable Knowledge

Challenges of Innovation

Ideas to Test your Perspectives

Everyone has ideas about innovation, yet we don’t all have the same ideas. To reach mutual understanding, let’s organize thoughts around a few published opinions. Each can be seen as a challenge to innovators.

Geoff Nicholson, Former VP, 3M

“Research is the transformation

of money into knowledge.

Innovation is the transformation

of knowledge into money.”

Nicholson gets right to the core. Invention is never enough. Innovation always combines invention with productization and commercialization – part proof of concept, part actual production, and part delivery to stakeholders. Successful innovation first costs money, then (hopefully) produces return on investment. Money going out pays for people, expertise, facilities, and other required resources. Returns include cash flow, competitive advantage, brand equity, and alliances.

Your Challenge: Innovate to optimize ROI. That is, define, design, develop, and operate your business to return value to stakeholders. Look beyond the nominal result of your business (e.g., product and profits) to stakeholder satisfaction

Though an essential perspective, Geoff’s isn’t general enough for me. Innovation happens everywhere and all the time in business, not just after R&D. Geoff talks here about product innovation, yet one of 3M’s most powerful innovations was a strategy – the gift of time – the suggestion that every employee spend 10-15% of their work time thinking up new things.

Innovation is much, much more important than products. We need to apply every innovation lesson to businesses, products, services, strategies, processes, events, and more.

“Innovation is the realization of value
from a new solution to a problem.”

Capgemini generalizes innovation to any kind of problem and every kind of market. For them, innovation changes every aspect of business, every year. And Capgemini emphasizes new-ness as the essence of innovation. Radical innovation is new to the world. Incremental innovation delivers new features.

Of course, these authors still focus on investment. “Realization of value” is actually a sly way of saying “make lots of money.” Still their approach invites us to also see value from the customer side. Value to customers is the sum of benefits gained by using the innovation. Market success demands that we deliver unique and preferable value to each segment of stakeholders.

Your Challenge: Innovate value as recognized, sought, and used by customers and other stakeholders. Innovate value as understood by entire markets of customers, whether commercial or internal. Innovate value so competitively that your innovation is consistently preferred over alternatives.

Though Capgemini speaks of solutions to “problems,” opportunities also drive innovation. Envision situations so new that problems haven’t yet been defined. That is, pay attention to chances to drive truly radical innovations.

We live in a time of constant innovation. Think about the doors to opportunity you open every day that simply didn’t exist yesterday. Think about the capabilities you’ve launched to market in just the last few years. You innovate at productivity levels no 1980’s manager ever thought possible.

Innovation is bigger than solutions to problems. Innovation is the path to the future… for you and your stakeholders. Innovation literally creates the future. You and your peers around the world are changing what is possible. I can hardly wait to see what you deliver.

Alice in Wonderland
”If you don’t know where you are going,
then any path will take you there.”

Do you remember the dialog with the cat? Alice was lost and asked for directions. The Cat logically asked where she wanted to go. When Alice said she didn’t know, we got one of the most profound statements in human history.

The Cat would suggest that the path to innovation begins with a vision of our destination. What should we envision? A completed innovation? By itself, that isn’t good enough. Not even close!

A useful vision sees the innovation having been chosen over competitive alternatives and now in use by customers who are so pleased with its performance that they deliver market loyalty and repeat business. Now that takes quite a vision! The Cat would be impressed.

Your Challenge: Innovate or adopt a customer-centric visioning process that consistently delivers a powerful sense of direction, purpose, and image for each innovation. Ask and answer a range of questions about the innovation, and do so from perspective of customers and other stakeholders.

Visioning by cross-functional teams outperforms visioning by individuals. When team knowledge is insufficient, team brainstorming often provides valuable starting places for market research.

One measure of a complete vision is statement of a clear, durable, unique value promise as the core of branding. Done early, this statement can drive research, development, market launch, and branding. The real world will thank you with funding, purchases, and investment.

Gary Lundquist
“How?” is not the most important question.
To be strategic, first ask, “Why?”

With vision clearly set, we’ve taken a huge step toward innovation. Indeed, there is a tendency to jump into development. A better choice is to take time to be strategic. I quote myself because I know the pain of weak strategy. I innovated a software business in the ‘80s. Our tactics were award winning, yet we lost the company on strategy.

Only later did I learn this fundamental truth. “Why?” is the core skill of leaders and strategists. “How?” is the core skill of managers and tacticians. We need both, yet in the rush to market, we all too often forget to be strategic.

Your Challenge: Innovate or adopt a formal strategy process that extends your innovation vision at business level. Ask and answer questions that develop long term goals, near term objectives, strategies for reaching objectives, and tactics for implementing strategies.

“Why?” questions develop goals and objectives. “How?” questions lead to potential strategies and tactics. Resource constraints influence the mix of objectives and strategies. To get around limitations, be inventive. Find new implementations and new resources. Consider adding a strategy to increase funding (e.g., via investors) or expertise (e.g., via collaboration).

Your result will be both context and launching pad development and commercialization. Without strategic foundation, you might apply tactics that implement strategies, that reach objectives not in your strategic focus. Strategy is a powerful, practical way to accelerate innovation and empower everyone on your team.

”It’s not how many ideas you have.
It’s how many you make happen.

Capgemini sees innovation as a result. Cat and Lundquist note the importance of initial processes. Accenture points out that completing innovation is hard work. Innovating takes a close match of processes and expertise.

Innovating processes is a huge challenge, far more complex than moving products through established methods. On the other hand, well done processes enable high innovation productivity. Great internal systems can easily be as important to the bottom line as customer revenues.

Your Challenge: Take responsibility for improving your current processes. Find better ways, new options, new ideas, and then implement them. When you are satisfied, start re-thinking. Innovation is never about doing again today what was done last year.

And don’t settle for “innovation processes.” Be bold! Innovate leadership, management, decision making, visioning, delegating, collaborating, and teaming. Innovate branding and market launch. Innovate your funding cycle and relationships with stakeholders.

Profitable innovation is a matter of multiple changes within context of other changes. The only way to manage change is with change.

Francis Ford Coppola
“The difference between a good movie
and a bad movie
is getting everyone to make the same movie.”

This quote clearly applies to us all. Movie makers may employ actors, direction, staging, cinematography, sound, music, marketing, and on and on and on. But they are not the only ones with obviously cross-functional teams.

Every innovation project faces the same challenge of building and sustaining multi-functional teams of people with distinctly different skills and mindsets. We want them all on the same page, working together, making the same innovation.

More than that, we hope to establish a shared culture that enables coherency and cooperation in our multi-functional teams. We know all too well that conflict around functions can kill productivity, if not the project itself. For the same reasons, we also need to go outside to convert key stakeholders and influencers into supportive team members.

Your Challenge: Develop an innovation culture that embraces and energizes diverse team members. Develop a shared ethos that is respected by management and those who influence funding and project assignments.

Why care about culture? Great culture attracts top talent, and talent improves both reputation and productivity. Outstanding results lead to new funding and opportunities. Talent boosts output which draws investment that supports new ventures. Great culture enables an engine of innovation that consistently spins out winning products that reinforces the culture in an ongoing positive spiral.

Team culture can be even more important when corporate culture is problematic. A successful engine of innovation has the credibility to pursue changes requiring new funding. Positive culture enables expertise to shine, where it might be wasted in a less reinforcing environment. When we all work together from a shared vision, clear strategies, and adequate resources, there is no limit to what we can accomplish.

Whew! Return on investment, value to customers, process, vision, strategy, culture, and engine of innovation. That’s a lot. Yet it still isn’t enough.

“Today’s innovation
is tomorrow’s commodity.”

SAP says it succinctly. Innovation must go on! We really don’t have a choice. Globally, change is accelerating. We are transitioning from industrial age to information age. More markets are more accessible by more competitors. Every new product changes market perceptions of what can be achieved. Financial upheavals change both markets and operating environments.

The end of every innovation cycle is an opportunity to begin another. At today’s pace of business, we really don’t have a choice.

Your Challenge: Renew and reinvigorate innovation itself. At every level, every year, for the foreseeable future. People, processes. Management, staff. Vision, strategy, tactics.

Innovation is our only chance – the only way to keep up with change. There is no place to hide, no place to relax. To sustain the pace, we need to refresh our minds and re-energize our teams with new ideas. We need to innovate environments in which expertise and determination can perform at high levels over time.

This may be the single greatest challenge of business in the global economy. Re-visioning, re-inventing, and constantly renewing. Re-igniting our teams and mindsets to keep up with the pace of change. Keeping energy up and output high.

Seven Challenges

Innovation isn’t easy. Let your mind wrap around these tests of your commitment and capabilities.

You face many more challenges. These are among the foundations. We have much to talk about and a lot to learn together.

Continue the dialog at Development and licensing of InnoKits™ Blog for interactive dialog on innovation processes. Blog for dialog on newsletter content. (Lundquist, has another side)

Twitter: (GaryLundquist1), FaceBook for Innovators’ Edge and Lundquist

Join the LinkedIn group on Innovation ToolKits --- a different set of perspectives.


Copyright 2012, Market Engineering®, Inc.,

Innovators’ Edge™ and InnoKits™ are trademarks of Market Engineering®, Inc.

InnoKits™ are to business as engineering is to architecture.

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Processes proven in both business innovation (start-up to Fortune 50) and product innovation (priced from one hundred to half a billion dollars). License at

If you don’t have the time to do it right,

when will you have the time to do it over.?

Gary Lundquist, author

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