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Innovation

Technology Innovation: Why Is it difficult?

front-end-of-InnovationTechnology Innovation is inherently difficult due to several key investment and execution challenges which include:

  • Advantage – There must be an advantage associated with the final product. The advantage must be greater than the inevitable problems and costs, or risk, associated with change by the end user. The funding sources must be convinced that the risk is acceptable to proceed with the development effort.
  • Timing – Timing is always important for investment and execution. Innovations can be discovered mid-development cycle after resources are already committed to other “higher priority” projects.
  • Existence of enabling technology – Sometimes the technology for innovation does not exist for a complete solution internally and needs to be found outside the organization, iterated, and combined to make a useful innovation.
  • Buildable – The solution must be buildable. That is, the solution must be easy to assemble, to test, and to maintain high reproducible quality.
  • Cost-benefit – There must be a clear, identified cost-benefit in terms of money, time, efficiency, or some other evaluation measure. The evaluation measure must be meaningful to the adopter with no immediate increase in end user costs.
  • Staged – The execution must be implemented in a staged approach to reduce risk of adoption.

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Separating the Good Ideas From the Bad

ip2biz-hitting-targetIn the drive to create innovative intellectual property or to provide breakthrough innovation in product management to drive corporate growth, ideas must be accepted and analyzed proactively.  Robert Brands, President and founder of Brands & Company notes that, “Ninety-three percent of successful innovations start in the wrong direction and countless more never succeed”.  Roy Rosin, Intuit‘s Vice President of Innovation further explains, “In entrepreneurship, most ideas fail, you either scale the wrong thing or you scale in the wrong direction. And it’s hard to predict.” Continue reading “Separating the Good Ideas From the Bad” »

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The Innovation Logjam

“Innovation is currently a wildly popular, multi-faceted word in business circles. Seeking out new ideas that can be quickly brought to market for profit is as old as commerce, and the realities of our borderless, globalized world requires constant vigilance to stay ahead of competitors.” (Oliver Marks, ZDNet, 2012) So why do many Senior Executives feel that their company’s internal innovation and technology management efforts fall short? Why do many Senior Executives feel good ideas or the creation of compelling intellectual property to drive innovation in product development are not sufficiently supported or prioritized internally? Why is an internal innovation logjam hampering growth and competitiveness?

The Innovation Logjam exists due to many reasons. Some reasons include a lack of methodology of how to manage the creative process at the Front End and how to encourage creative innovation to include rejection of bad ideas with sound analysis. The Innovation logjam is further fueled by a lack of knowledge in how to embrace external technology and independent points of view to break down preconceived notions. Lack of management support for the need to manage innovation before the formal product development process is another reason for the Innovation logjam.

The currently popular Stage Gate Process for Product Development exists to define innovative product opportunities, risks, dependencies, and key elements of success. However, in an attempt to tightly manage the delivery of innovative products to market, the Stage Gate Process may have created a barrier to innovation. A collaborative process at the Front End of Innovation, before the formal Stage Gate process, allows for the inclusion of technology that exists externally from the corporation but is critical to innovation success. Collaborative efforts help to break down the rigidity inherent to the Stage Gate process and break out of the Innovation Logjam.

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Corporate Innovation and the Slowing number of Startups in the USA

Professor John Haltiwanger at the University of Maryland made a shocking claim regarding the formation of new companies. In an interview with NPR he stated,

“It used to be the case, in any given year we were up in the 12, 13 percent range. Now we’re down in the 7 or 8 percent range of a total number of companies down from 12 to 13 percent range historically.”

Slowing Number of StartupsThis is a possible comment on the potential slowing of innovation in the US Economy.  Cautious investment leading to the lack of access to capital is a reason that promising technologies do not see more company startups.  But is this a lack of true innovation?  Many technical innovations are not sufficient to support a full corporation built to develop and market the technology.  Many ‘would be entrepreneurs’ with strong technology have been rejected by the Venture Capital Community as having only a “feature” like solution and not worthy of investment.

Innovation is not stopping at major research universities as technology incubators continue to encourage the development of promising innovation.  The evolving Open Innovation model provides a path to integrate promising external technology with large corporation internal technology to produce breakthrough innovation.  Investment into a university developed technology “feature” by a large corporation may also just enable disruptive innovation.

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What is Innovation Management?

Innovation management is the discipline of managing processes in innovation. It can be used to develop both product and organizational innovation.  The focus of innovation management is to allow the organization to respond to an external or internal opportunity, and use its creative efforts to introduce new ideas, processes or products.

Managing the internal and external creative forces to produce true innovations that are validated and ready for insertion into the formal process for product development is the elusive key to success corporations are striving to perfect.

Love, Roper and Vahter in Learning from openness: The dynamics of breadth in external innovation linkages stated, “Openness to external knowledge partners involves a process of interaction and information processing in identifying and selecting appropriate partners, developing routines to interact with them, and constructing management systems to manage the relationships. Such activities are likely to be subject to a learning process, as firms discover through time which knowledge sources and linkages are most useful to their particular needs, which partnerships are most effective in delivering innovation performance, and how best to manage them. In evolutionary terms, this could be seen as the development of improved innovation routines.”

Innovation and Technology Management is information and analysis based, with key stakeholders forming on a project basis to work through in an iterative fashion idea validation and enablement that is different from the formal development process designed to execute on a defined plan.  Innovation Management is evolving to support and encourage an efficient creative process where promising Intellectual Property is both created and applied to bring innovative new products to market.

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Intellectual Property and Technology Innovation: A Barrier to Creativity?

Intellectual property is a legal concept which refers to creations of the mind for which exclusive rights are recognized. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets. The concern right now with intellectual property, in regards to innovation in product development, could inhibit the entire creative innovation and technology management process.

Technology innovation for product development often involves a combination of efforts such as sharing “trade secret know how” with new insight to enable new possibilities for breakthrough innovation. To move this work along, discussion and studies are involved along with analyzing the feasibility of the technology with critical testing in a cooperative manner. Often times, external technology or new processes are involved in this process.  This is the iterative, creative process at work.

In Breakthroughs and the “Long Tail” of Innovation, MIT Sloane Management Review (Fall 2007) by Lee Fleming, Associate Professor at Harvard Business School, noted that in structuring innovation teams,

“Companies should go for depth, not breadth, when assembling a diverse team. In general, individuals with deep expertise will be more likely to see potential synergies across fields than will those with broader but shallower knowledge”.

A major concern in innovation and technology management is restricting the collaboration with rules or guidelines. The producing of quality results could be By putting guidelines in place (like preventing teams to collaborate) could prohibit producing quality results. Sharing and insightful iteration to create new value propositions, identify risk areas, scalability probabilities, potential costs require innovation “partners” to share Intellectual Property.  Methods to share jointly-created intellectual property will encourage the free exchange of ideas and the analysis required for successful product development innovation.

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What ever happened to Open Innovation (OI)?

Light SourceAfter Henry Chesbrough illuminated the failings of the closed corporate innovation paradigm and triggered the Open Innovation (OI) Revolution, much literature has been produced, while trial and error approaches implemented by a staggering array of corporations in pursuit of breakthrough or disruptive innovation have failed. The central idea behind Open Innovation is that, in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions from outside sources. Crowdsourcing was become a well tried OI method to obtain needed innovative technology by soliciting contributions from the online community. This requires a tightly defined specification from the soliciting corporation as to what specific function the technology innovation needs to serve. Corporate OI department have been formed to serve internal R&D Staffs to satisfy Business Unit requirements. However the innovation logjam is still perceived as a major problem among corporations. Perhaps the OI approach to reach external technologies was only the first step. Much innovation at the front end of product development is iterative, tight specifications inhibit innovation rather than enable a predefined internal business goal by limiting necessary discovery to reposition potentially valuable external technology for maximum. Further evolution of the OI model seems certain.

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Listening to the Drumbeats

steps-for-innovationI see it almost everywhere. Senior executives who run global corporations are frustrated that ideas to transform their business never get traction even though they put their own personal encouragement behind the early investigation needed to get the nascent ideas moving “up the food chain”. They have taken one or more steps to create forward motion:

  • Tasked a special internal team to evaluate and pursue the ideas,
  • Hired consultants to invent and install processes and cultural attitudes conducive to innovation,
  • Handed ideas over to the Open Innovation Department created a few years ago after the board meeting when directors challenged the CEO about progress of breakthrough innovation.

And nothing seems to be making the desired impact.

Clayton Christensen got it right. So those executives who know that Disruptive Innovation will happen – caused either BY their companies or TO their companies – settle into a state of funk over what I call the Innovation Logjam. They are beginning to realize that something is missing from the bright future suggested by the OI movement. It just isn’t delivering the results they had hoped for, but it IS costing them overhead allocations. And in the meantime all the potentially good ideas in the innovation portfolio just seem to cause incessant discussions over which is the best idea, issues over which business unit “owns” the opportunity, and long lists of why the idea is no good.

So how does one break up The Innovation Logjam?

Think about it; you can’t break up a logjam from the shore.

To really investigate, prioritize, develop and advance breakthrough ideas to early commercial status is chaotic, time consuming, conflict causing and chock full of reasons for sensible, hard-working team members to kill the ideas. Logjam.

But what if you had a trusted external partner who could do much of that heavy lifting for you by listening, researching, prioritizing, filtering and even investing capital to help you nurture your ideas? What if you discovered that the cultural brain surgery wasn’t required because your team would like to be involved in the excitement of innovation without all the frustrations of balancing long term and short term? What if ideas could be explored and developed in the clear light of the world outside your corporate walls without disclosing your identity to competition?

There is a revolution coming, and it isn’t Open Innovation. OI is a great concept, but it doesn’t come with an instruction manual and the few best practices which have been identified are incomplete. The revolution is in the simple realization that the engagement of outside partners may just be good business. Rather than rely on a random “cloud” for discovery, analysis, reporting and further development, it could make sense to find a trusted partner to seek and validate innovative applicable technology without any bias or preconceived notions.

Some of you can think back 30 years when brave souls began to suggest that traditional functions like finding, screening, hiring and training new employees could be best done by outside firms working closely with the client, but extremely skilled in the specialized tasks required for top performance. Those professional search firms were thought to be a threat to the Human Resource departments who ruled all aspects of the recruitment process from within the company. But today most firms recognize that they are far better served to partner with such firms to maintain confidentiality, reduce costs, increase speed, cut internal bias out of the process and increase retention.

It is natural for companies to attempt to do new tasks internally. But many important initiatives should not be held captive by Christensen’s “laws”.

Finding the right external partner for innovation efforts can break open the Innovation Logjam.

A recent PwC study identified that today’s CEOs recognize that they need to be personally involved in driving innovation. The change in this awareness has increased almost 300% over the last three years!

The drumbeats are getting louder.

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