We believe that organizations are on the cusp of an era of enlightenment when it comes to being innovative. At the core of of this enlightenment is the fact that we should probably stop calling progress innovation. Using the word innovation conjures the wrong associations, which leads to the wrong activities for reliably creating value. We believe that most organizations would significantly benefit from decreasing the focus on finding brilliant ideas and increasing the focus on effective collaboration that drives progress and real value for customers and stakeholders. Here’s the basis on which we believe these things.
If you aren’t disillusioned with the term innovation yet, you should be
Measurable innovation might be on the decline, but, for some reason, we just can’t stop talking about it. A search of annual and quarterly reports filed with the Securities and Exchange Commission shows companies mentioned some form of the word “innovation” 33,528 times last year, which was a 64% increase from five years before that.
We can’t stop talking about it, but what exactly are we talking about? In a survey of literature on innovation, Edison et al. found over 40 definitions. This points to the confusion and a lack of clarity around what exactly an organization is hoping to accomplish when they want to be more innovative. Scott Berkun, the author of the book 'The Myths of Innovation' now advises clients to ban the word at their companies. 'It is a chameleon-like word to hide the lack of substance,' he says.
Clayton Christensen, a professor at Harvard Business School and the author of the 1997 book, 'The Innovator’s Dilemma' is even more sceptical - 'Most companies say they’re innovative in the hope they can somehow con investors into thinking there is growth when there isn’t.'
We spend a lot of time with customers helping them zero-in on their goals and how they’ll measure them. For most, these goals are actually very straightforward and bring about practical value for the organization and its employees. Things like finding ways to save money, or improving the customer experience. Clear, simple, actionable. These are the kinds of goals we love – ones that aren’t diluted by the word ‘innovation’. Whether an idea is innovative or not shouldn’t weigh into the equation. We should simply ask ourselves, will this help us with our goals? Yes? Then get it done.
Innovation gets too many organizations overly focused on 'disruption'
GE’s Global Innovation Barometer for 2016 highlights that 81% of business executives are mindful of the risk of 'Digital Darwinism' or fear of becoming obsolete. In response, organizations are implementing innovation teams and innovation strategies. However, it doesn’t appear to be working. The majority of organizations that said they had a clear innovation strategy in place were still struggling to come up with radical and disruptive ideas. This mirrors what we often see with our customers. At first, there is a hope that they will unearth transformative ideas. But where they see value after a few months is in shining a light on actionable feedback and implementing processes to see them through. For us, this is the moment of enlightenment. The focus shifts from idea generation, to real collaboration from the top to the bottom of the organization on making progress.
Innovation isn’t an idea problem
Let’s consider the following article in Entrepreneur.com: Investors Are Poised to Disrupt the Tech-Averse Insurance Industry. The author outlines a few key areas where startups are likely to disrupt. First, as a result of digital transformation in our lives (think smart homes, cars, etc.) and big data, there is an opportunity to develop new tools for better risk assessment (and therefore better insurance pricing). The second area is improvements in efficiency and experience. 'Believe it or not, the (insurance) industry still largely relies on fax machines to transfer information. If it’s not done by fax, then it’s done by email. Like the industry itself, this communication is outdated. The next logical step is to move data management, billing, claims and communication to smartphones.'
Let’s stop and consider for a moment what’s actually disruptive here. Not much. The internet that has made some of these things possible was disruptive, but much of the progress being discussed here is known. In other words, it’s possible to leapfrog this type of 'disruptive innovation' by simply having a focus on fixing known problems with known solutions. The focus needs to be on getting solutions implemented, not on finding new solutions.
In the HBR article, 'Innovation Isn’t An Idea Problem', David Burkus points out that the issue isn’t that organizations don’t have good ideas, it’s that these ideas aren’t recognized and given the resources necessary to be successful.
If the answer isn’t disruptive innovation, what is?
Milliken & Company, a U.S.-based textile company, has an idea system which has consistently averaged around 100 implemented ideas per person per year. Milliken Denmark translated this focus on improvement to their looms, each of which had several hundred small ideas applied to it. These small ideas collectively made them two to three times faster than they were designed to operate, and capable of making special weaves that their manufacturers had thought were impossible. Competitors could easily buy the same models of loom, but would find it much more difficult to come up with all of the ideas that would be needed to match this performance. In fact, Milliken’s focus on continual improvement is now so recognized, that they’ve spun off this expertise into one of the fastest growing consulting businesses in America: http://www.performancesolutionsbymilliken.com/.
We can debate whether this is innovative or not according to the many definitions of innovation, but it doesn’t really matter does it? At the end of the day, isn’t this type of progress the type of thing most organizations are seeking? Wouldn’t any organization be envious of this type of progress? We think so. While the word innovation does come to play in Milliken’s main site, when you dig into what they believe and how they get there – it doesn’t come to the fore. Specifically, Milliken believes that a systems-based approach is always superior to an initiative-driven approach and that total engagement of the workforce is the foundation for all improvement. And this is exactly what we believe an enlightened innovation strategy should look like.