Apr 19, 2018
Our new TOI colleague explains why innovation isn't about one idea.
In companies, there is a persistent belief in the good idea, the trust in the genius of individuals and their flashes of inspiration. The reality of successful innovation seems downright bleak in comparison to this notion. Really good ideas are like rough diamonds. They are unsightly, easily overlooked by the uninitiated, and only reveal their brilliance through lengthy, expert polishing. It is a long process of trial and error, failed prototypes and continuous adaptation of one's own ideas to reality.
Anyone who underestimates the effort and expertise required for the process of idea grinding will not get far in innovating products and services. This can be seen in the numerous failed initiatives of companies that strive to create something new beyond their core business.
Failure is almost always due to a lack of preparation. Or as American serial entrepreneur Gary Vaynerchuk put it: "Ideas are shit. Execution is the game."
Over the course of the past year, Johann Füller, Volker Bilgram and I have intensively discussed the causes of this failure. Little by little, we identified six typical problems that slow down the new in everyday corporate life (see „Wie Innovationen Erfolg haben“, Havard Business Manager 4/2018).
These mistakes are distributed across three stages of the innovation process: set-up, value creation, and value capture.
By set-up, we mean the basis that is created so that innovations can emerge and be implemented. The better the preparation, the better the implementation. Typical problems and possible solutions:
- Choose innovation topics that fit the strategy.
- Actively bring the vision to life.
- Adjust the risk assessment.
- Provide evidence of customer value
- Give the idea momentum through internal innovation marketing.
By Value Creation we mean the process in which the actual value of the product or service is developed. Typical problems and possible solutions:
- Grant autonomy.
- Give up power.
- Define new rules of the game for radical innovation.
- Motivate their employees with mini-budgets.
- Use design sprints to identify talent.
- Foster ecosystems of startups and users.
Once the value of a new business has been developed, it must be commercialized; this is the process of value capture. Only when this succeeds can one speak of an innovation. Typical problem and possible solutions:
- Use the core business of the company as the first customer
- Build a handover organization that closes the gap between creative innovation mentality and production culture trimmed to efficiency.
So, anyone who is forced to create something radically new, whether by the compulsion to digitize, increased competition or other factors, has to do a lot of homework before calling for internal idea development. This is primarily the task of top management. Once the framework has been set, ideas can be developed in peace. Because then there is a good chance that the rough diamonds will become precious stones.
First published on Harvard Business Manager, March 19, 2018.
LinkedIn on April 12, 2018.
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