As a rule of thumb, there are only two routes in innovation. One is about sleepless nights, pain and hardship. The other is about sleepless nights, pain and hardship, plus divorce and financial ruin. This is not what the business books are promising.
Unfairly, the word ‘innovation’ is mostly used to describe with hindsight what someone has already done, and done successfully enough to get noticed. Attention is skewed to the few entrepreneurs who hit the jackpot, not to the many thousands of people in regular businesses who create new products and services every day. Nor the countless failed entrepreneurs whose ideas brought them nothing but ulcers.
The fancy chatter about disruption by start-ups with nothing to lose isn’t much help either, when you’re still at the front end of the journey wondering what to do next. Should you copy the habits of those hard working, successful people? Unsuccessful innovators show many of the same determined behaviours, so that won’t work. Creativity gurus will claim you need to get out of your comfort zone – blatantly ignoring that most people tasked with creating the next big thing are already deeply uncomfortable with that assignment. If anything, more comfort is what you need for good ideas: plenty of hot showers to ponder, rather than ambitious KPI’s to stress over.
A simple yet mostly overlooked first step up and out of that place of discomfort is to move attention away from what the idea will be, to what it needs to deliver. Almost all innovation initiatives are commercially driven by someone wanting to make money with their new idea. From start-ups to corporate giants, that new idea’s only purpose is to displace something else. Whether it’s a small change to annoy a direct competitor, or a big one to overturn a whole industry, it starts with acknowledging what that new idea must do in order to be considered a success. Without that acknowledgement, it’s simply impossible to adequately judge how radical an idea needs to be to make the impact you want. Counter to business book arguments, you want to find the least radical solution possible, because the less disruptive it is, the easier it will be to implement. A big reason so many innovations fail is not because the market won’t accept them, but that they’re too disruptive for the business itself to implement and sustain profitably. If the market wants a new flavour, don’t bet the ranch by developing a whole new product with all the problems that come with it.
Based on many years of helping teams innovate successfully in very mature and crowded markets, there seem to be four distinct areas that dramatically affect success rates along the innovation journey.
Spoiler alert: none are sexy.
Start with the right innovation objective
Clarity of what the business objective is, which the innovation is required to deliver in market. This is universally misunderstood. All too often an innovation project within large corporate entities start with defining the type of idea that is necessary, for example “We need the next [widget], with refills like Nespresso”. Wrong. Consider innovation a spectrum of activities, with a range of different outcomes: are you innovating to protect, grow or transform your business? By chunking it down to these three impact levels, each with its own definitions of success, restrictions and approaches to get there, clarity of thought comes much easier. For instance, one shouldn’t try to create a revolutionary and expensive new product design if the business objective is merely to steal a little share. Equally, if the time has come to transform the business, one shouldn’t be restricted by current factory capabilities.
Uncover frustrations you can resolve
Reveal real, unmet frustrations that will attract new customers to your innovative product or service. Too often innovation teams are distracted by industry truths, and chasing generic trends or even common human needs. Whilst these are fun to investigate and keep everyone busy, their value for creating innovative and relevant new products and services is limited. People will switch to your product only if it removes a functional or emotional frustration. C’est tout. The depth of the frustration you need to find is directly related to the business objective, in other words the innovation impact level you’re looking to achieve. If it’s merely snatching some customers away from your direct competition, resolving a small frustration will do. If you need to lure a whole new group of people away from another type of product and into your franchise, then you better find a big problem to solve for them or they’ll just stay put.
Create winners that make commercial sense
Leverage your capabilities across the marketing mix, without defaulting to the same types of solutions. One has to understand and acknowledge what the limiting factors will be to achieve success. Creating products that consumers love in tests is easy, just give them what they want. Creating products they love and make money for you is a different matter. Success is then defined by the degree to which you can use your current people, capabilities and assets. If you’re looking to create a new product to launch next year to nudge a competing brand out of the way, then your current manufacturing assets will likely be the limiting factor. So you need to find a way to answer the consumer frustration you found, with solutions that you can make in your factory now. If you’re looking to create longer term ‘grow-level’ innovations to open up a new audience of consumers in another aisle in the supermarket, then your sales team’s capability to build new customer relationships will be the limiting factor you need to work within. Merely creating concepts that do well in consumer tests just won’t cut it.
Energise the business into action
Keep the momentum through all layers of decision-making, without letting ‘risk-aversion’ get in the way. Engage stakeholders (internal and external) such that they will invest in turning your ideas into reality. Where protect-level innovation initiatives are often small improvements that can be planned by the calendar by a single team, the other two levels need a harmonious business ecosystem to survive. Grow-level is truly opportunity-led and will require collaboration between disciplines to create new standards. Transformational innovation requires a bold vision and even bolder personality to push it through. But across all three, an energised business climate is required to keep innovative ideas intact through to the end – developing them positively, not compromising them and losing sight of the business objective that ignited the process in the first place.
Successful innovation in popular business media looks sexy and aspirational. Thankfully, the ugly reality is that it isn’t ugly either, maybe just a little less magical. More than anything, it’s a skill you can learn and become good at, both on a personal and a business-level. There’s no magic ingredient here, just lots of good cooking.
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Costas Papaikonomou is Founding Partner of Happen, a global innovation agency based in London, Amsterdam, Toronto, New York, and Sydney.