In defense of industry-agnostic innovation management

I recently had a chat with a senior director of a respected technology company making highly specialized products. He is in charge of the innovation and development in his company. I was telling him about the innovation assessments I conduct.

“ Are your assessments industry specific? ” He suddenly asked

“ No ” I said. Because they aren’t.

“ Well, in that case, it is not for us ” he abruptly proclaimed.

He may have heard whatever I said after that, though he was clearly not listening. His mind was set. We wished each other luck and concluded the call.

The conversation left me rankled. Am I wrong? Should I design the assessments to be industry specific taking account of the peculiarities of each industry, it’s unique pressures, opportunities and technology? There are definitely merits to that approach. The innovations required by a fashion retailer are not equivalent to those of a pharmaceutical or a telecom company. There is clearly a need for industry specific innovation services. And these exist. For example, technology scouting firms assist companies making sense of new technological developments relevant to them. Such services are important and valuable.

But that is one side of the coin. There are also dangers in an industry focused approach.

The first is that industry focused tends to mean competitor focused. Which is a bit like preparing for yesterday’s battles. A ‘better the devil we know’ attitude. Companies get away with it because most of the time the competition does indeed comes from existing players. But every now and again it doesn’t. And when that happens, the carefully assembled Maginot line of defense fails spectacularly. Yes, Kodak, I’m talking to you.

Secondly, industry focused is quite different from customer focused. Industry focused solutions evolve around issues that the industry holds dear. Each industry has an encyclopedia full of acronyms denoting such issues: Turnover ratios, Bits per seconds, you name it. Some of these are tied to customer benefit. But not all are. To know which is, one must understand customer real needs. Many technology companies, particularly in the B2B space, find that an undignified experience.

And the third point is that industry focused translates to technology focus. Clearly, technology is a key ingredient in innovation. It would be foolish to assert otherwise. But it isn’t the only ingredient. And with so many different technology breakthroughs these days, how should one know which to focus on?

Take Nokia and Blackberry as an example. Back in 2006 the duo reigned supreme in the mobile phone market. Blackberry focusing on the business clients and Nokia on the rest. Then came the iPhone. Say no more. Were Nokia and Blackberry lax with their innovation and technology development? They weren’t. They wrongly assumed that just because the iPhone did not outperform their products on parameters they deemed important, it was doomed to fail. Nokia CEO expected iPhone to become a niche product at best. Blackberry’s dismissed it outright. How could such clever people be so wrong? That’s because they were looking through an ‘industry specific’ view point.

The question is not why Blackberry or Nokia had not come up with the iPhone themselves. Brilliant ideas are difficult to come by, no matter how geared one is to innovate. The question is why they hadn’t adapted fast enough once the news about the iPhone emerged. (and there had been many rumors circulating prior to the official introduction, enough to keep lights burning in the high floors deep into the night). Had these companies a culture of learning, openness, and cooperation something of the following would have occurred. Marketing departments would identify the consumer excitement around the iPhone and raise the alarm. Management would have experienced a paradigm shift and divert resources to an iPhone beater. Engineering and product management would cooperate to produce a product that builds on the strength of the companies and provide superior experience. Sales would lean on their channels to ensure better exposure to the new product. But, as we know, this is not what happened.

Think of the following analogy. Back in 1905 there had been thousands of physicist working tirelessly in their labs. But only Albert Einstein came up with the theory of relativity. (Amongst 4 mysteries he solved that year). Yet, due to their training, knowledge and openness, the world physicists immediately grasped the significance of Einstein’s work, and ceased upon it. Everything the leadership of Nokia and Blackberry failed to do. The conversation I recited at the start of this blog proves they are far from being alone in misunderstanding the importance of culture, processes and strategy to innovation.

So what should companies do to evade the sorry fate of Nokia and Blackberry? First they need to look at their vision, or innovation strategy. They should be clear about their innovation objectives, let these be known across the company. They must ensure that all innovations either increase benefits to consumers or to the company itself. Selection criteria and priorities should be agreed, known and published. Further the company should have a balanced portfolio of projects across different innovation horizons, and various areas of its value chain. It must ensure that it continuously investigates the market, consumer tastes and competitor activity.

Then it must have the right processes. Firstly, processes to validate assumptions so that decisions can be made based on facts (And not the identity of the ideator). It should streamline processes to remove waste and identify hidden opportunities for reusing resources. Resources allocation must match the strategy. Risk management should tailored to reflect the innovation horizon. And finally it should be able to effectively promote its innovation to bolster adoption ratios.

And then of course there is the matter of corporate culture. How to ensure that ideas are created, shared and evaluated uninhibited by dogma, rank and false conceptions. The company should encourage openness to new ideas, technologies and business models. It should be able to handle ambiguity and prize questioning over certainties. It should foster cooperation internally and externally and encourage trust. And finally it should empower its employees, reward them for their input and provide valuable feedback and trainings.

The Rebel Within has developed a comprehensive model to assess the organizational innovation environment and skills. Our framework consists of over 150 best practices grouped together into themes. The themes cascade from the organizational vision, processes, culture and value proposition. The first 2 layers of the model are illustrated below. This approach enables pinpointing the exact strengths and weaknesses of the organization, while linking between them to identify strategies for improvement.

Are you curious to know how well your company fares? You are most invited to contact us, share your opinions about innovation and learn more about our innovation assessments.

For more information please visit my site at www.the-rebel-within.com. Or my blog

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The Rebel Within conducts comprehensive assessments of the a company’s innovation capabilities looking at its strategy, culture, value propositions and processes. Based on the assessments we provide clear recommendations and roadmaps for improving companies innovation credentials. For more information please contact david@the-rebel-within.com or view our website:
www.the-rebel-within.com