Innovation of Business

and the
Business of Innovation™
 
The Pain and Power of Innovation

The Pain Cycle in Innovation

The term “innovation” has its roots in “going nova”.  An innovation can explode into its markets, changing the way people and organizations deal with their worlds.  Today, “innovation” is widely credited for economic advantage, new wealth, new jobs, and new products, services, business models, and businesses.  Innovation creates rapid change in almost every facet of human life.


Trouble is, we may not innovate well enough.  That leads to cycles of pain that run through companies small and large in every industry, built on weak results of outdated ways of doing business.

  • On managing instead of leading.
  • On tactics instead of strategy.
  • On developing products instead of innovating to satisfy customers.
  • On designing websites instead building powerful brands.
  • On doing ads and tradeshows instead of strategic launches and integrated promotion.
  • On selling to close business instead of connecting to build durable win-win relationships

 That pain has names.  We all know and fear them.  They rob us of our just rewards.

Ineffectiveness:  Doing the wrong things, or for the wrong reasons, or at the wrong time.  Making wrong decisions that lead to wrong actions company wide.  Low ROI, no matter how hard people work.  No shared vision, disjointed efforts.  Confusion, frustration.
Inefficiency:  Doing things wrong.  Rework, do-overs, always catching up, never enough time to do it right.  Confused staff and management.  Questioning of directions and methods.  Delays, delays, delays.
Lost opportunities:  Market leadership, sales, negotiating positions, abilities to invest in the future, momentum, exit strategies.  Less upsell and cross-sell.  Fewer referrals, lower customer loyalty.  Everything harder than it should be.  Headaches, ulcers.
Higher costs:  Of doing business (product development, manufacturing, distribution, marketing, sales, etc.)  Of getting capital.  Longer time to payout on investments.  Lower ROI and NPV.  Lower dividends and share value.  Weariness and worry.
Weaker image:  Lack of credibility.  Image as tactical and floundering, not a market leader.  Weak brands.  No or misunderstood value propositions.  No connection of product or company name to the value delivered.  Ineffective market relationships.  Personal reputation as inept, inadequate.
Uncertainty:  Within staff, management, industry analysts, and especially customers, distributors, allies, and shareholders.  Indecision, hesitation.  Blaming, cover ups, self protection.  Inability to turn things around.  Guilt, regret, resignation.

On the other side are the gains... the power of innovation to satisfy customers, build loyalty, create advantage, and grow wealth.  Successful companies almost invariably innovate well at levels of products, process, strategy, and business-models.
Easing the pain requires rethinking every part of business, yet if we suffer this much pain now, what makes us think we can actually turn things around?  Renewal implies defining, initiating, and sustaining change in almost every part of our business.  Where are our solutions?

Path to a Solution

Rather than assume we know solutions, we can put together teams of innovators and management to apply this simple brainstorming exercise.

Pain:  What happens when innovation is not effective?
Power:  What is gained when innovation succeeds?
Problems:  What makes the difference?
Principles:  What core guidelines will focus solutions to the problems?
A diverse team of innovation experts from the Product Development and Management Association assembled briefly to brainstorm those issues.  Specific results here are not as important as demonstration of process.  That is, use what you learn here to guide your own analysis.

Pain

Lose business.  Lose money.  Lose customers.  Lose confidence.
Unrealized value, potential, derivative products.
Fail to satisfy market needs.  Open doors for competition.
Leave problems unresolved.  Do projects over.
Fail to deliver discontinuous or disruptive innovations.
Lose face.  The team and its management champions.  Peter Principle invoked.
Cynicism.  Hopelessness.  Internal lack of respect for management, the company.

Power

Make money.  Gain market share.
Create value.  Create customer satisfaction.  Create brand loyalty.
Create momentum.  Innovation leading to innovation in positive cycles.
Team gains status in the company, perhaps fame outside.  Financial rewards.
Confident system and culture.  Can-do attitude.  Let's do-it-again attitude.
Ongoing learning.  Continuous improvement by knowing how success was achieved.
Fulfill personal motivations.  Altruism... service to mankind

Problems

This generated lots of energy.  You may relate to some of their concerns.  After brainstorming, topics were clustered by naming bins that would hold all issues  Sorting then put topics into each bin.  Some topics fit into more than one bin.

Leadership

  • Poor leadership: Weak vision, corporate process, strategy, vision, execution, tactics. Going the wrong direction Lack of focus. Leadership ego. Personal agendas. Failure to learn from experience
  • Poor decisions: Weak process, no decisions, late decisions, no action on contingency triggers. Insufficient market knowledge. Weak risk management, inappropriate tolerance for risk. Weak planning. Don't follow the plan
  • Delays, delays, delays. Fall behind the curve. Never catch up.

 

Culture

  • Corporate ego. Personality, norms, behaviors, expectations, tolerances. Personal agendas (management, staff, divisions, departments, ...)
  • Weak confidence. Lose good people. Can't attract the best people.
  • Gaps between management and staff: Lack of motivation - personal, team. Unrealistic expectations. Poor communications. Inconsistent reward system. Weak innovation environment, inappropriate processes that kill ideation and creativity. Inconsistent support, direction, incentives.
  • Culture variation. Conflicts, e.g., between invention, development, deployment. Between R&D, manufacturing, marketing.

 

Process

  • Weak innovation process. No product management, NPD process, stage gate. No or weak environment for innovation
  • Weak or no project management process. Weak or no visioning. Undefined problem. Lack of market knowledge. Misuse of market knowledge. Weak planning. Don't follow the plan. Don't act on contingency triggers. Scope creep
  • Weak or no decision process. Bad timing. Don't learn. Scale-up problems. Delivering partial or incomplete solutions to customers
  • Gaps in process: Ideation and creativity forced into an inappropriate innovation. Valley of death between invention and development. Gap between development and deployment
  • Weak marketing: Poor branding (lack of, inadequate, misunderstood). Weak product launch. Websites, sales staff that miss the point. Trying hard, but customers "still don't get it."
  • Weak compliance: Safety, regulatory

 

Resources

  • Inadequate resources. Adequate resources, yet inadequate or inappropriate resourcing. Lack of funding. Poor delegation. Inadequate facilities. Insufficient contractor help. No or weak alliances.
  • Incompetent resources. Resources without the right skills and experience. Processes not right for the situation. People, tools not up to the challenge. Management not learning over time.
  • Poor communications: Weak management.
  • Bad data. Market research, testing, finance, etc. False positives, inconclusive. Leads to bad decisions, strategies, tactics, scope, ...

 

Market Knowledge

  • Unanswered questions: Is there a market? Is it available? Can it afford our product? Do customers need what we offer? Do they need it now? Are we competitive? Are we cost effective? Will there be adequate ROI?
  • Undefined problem. No, weak, or incomplete innovation vision. No clearly stated value proposition to guide development and marketing. No or weak market research. Inconsistent definition processes. Good data that goes bad over time. Wrong requirements, scope creep.
  • Bad timing. Not matched to changing market realities. Unrealistic expectations by management and/or innovators. No discipline in development or delivery. Valley of death
  • Wrong branding. Lack of, inadequate, misunderstood. Doesn't match market needs.
  • Weak message. Customers "don't get it."

External Environment

  • Bad timing. No forecasting, market research. Disruptive technologies not recognized. Fall behind the curve.
  • Company not willing to pay costs. Lawsuits by other companies.
  • Weak patenting
  • Liabilities: Regulatory problems. Safety problems. Contract, alliances.

Principles

Cluster names identify needed principles to turn innovation pain into gain.  Each set of negatives above was folded into a concise positive principle.  These apply to internal innovations (e.g., manufacturing process) as well as products for external markets.

Leadership:  Use powerful visioning and effective decision making to focus innovation, guide management, and minimize gaps between management and staff.
Culture:  Establish a corporate ethos that attracts and retains top innovators who will then help sustain that productive innovation culture.
Process:  Deploy and sustain a multi-level, cross-functional innovation process that includes corporate focus, new product development, project management, branding/marketing, and decision making.
Resources:  Accelerate innovation with clear visions and suitable funding that guide timing, delegation, tasking, and resourcing needed to compete for and win market preference.
Market Knowledge:  Support innovation with powerful understanding of technologies, markets, customers, needs, and competition, both now and as trends over time.
External Environment:  Account for regulation, customer safety, and the high probability of unexpected advances in technology.

 

Solving Your Pain Cycles

These principles were defined from product manager perspectives.  Executives would have produced related yet distinct principles.  Product engineers... a third set.  Indeed, each part of the business will naturally develop its own principles.  At each level, principles address needed changes seen at that level.  Ideally, corporate principles act as an umbrella under which all others fit.  
To apply your principles,

Define them.  Define nested, mutually reinforcing clusters of principles.
Honor them.  Build trust by making principles explicit, then consistently applying them.
Reward them.  If this is how you want the business to behave, put funding, promotions, and appreciation where these behaviors are best exemplified.
Renew them.  Principles should be durable, yet change happens.  Industrial age principles, for instance, won't apply to information age businesses.

We can't afford business pain, yet all too often our people and organization work against each other.  Aligning on accepted principles pulls people and teams together, and together we can move from pain to profit.  The time for change is now, and it always will be.

 

 


 



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