Nelnet Innovation Week
2 Minutes of Talking Change
Back to Basics: The Innovation Alphabet
You know ALL the innovation tools and frameworks:
- Design Thinking
- Lean Startup
- Disruptive Innovation
But knowing and doing are two different things. When I first learned Jobs to be Done, it felt painfully obvious, exactly like the customer research I did for five years at P&G. Then I had to do it (conduct a Jobs to be Done interview), and it was difficult (ok, it was a disaster).
And teaching others to do it is a third entirely different thing. Because by the time you have the skills and expertise to teach others, you’ve forgotten what it was like to start from the beginning.
It’s easy to forget that before you can read a sentence, you must know how to read a word. Before you can read a word, you must recognize a letter.
So let’s go back to basics. Back before the methodologies. Before the frameworks. Before the theories. Let’s go back to the letters and words that are Innovation’s essence.
Let’s go back to the Innovation Alphabet.
Assumptions, every innovation has them, and every innovator tests them to reduce risk
Brainstorming, a great way to get lots of ideas and maybe even some new ones
Customers, the people we innovate for
Disruptive Innovation, cheaper, lower quality products that appeal to non-consumers
Experiments, how you test assumptions and reduce risk
Fun, what innovation should be
G
Hope, it springs eternal in the heart of every innovator
Ideas, where most innovations start
Jobs to be Done, the problems people have/the progress they want to make (and the hill I will die on)
K
Leadership, the most crucial element in innovation (and often the biggest barrier)
Mistakes, how we learn, grow, and make progress
No, the start of a conversation, not the end
Opportunities, a nice term for “problem”
Problems, where all innovations should start
Quiet, what we sometimes need to think big and create something new
R
S
Team, how innovation gets done
Uncomfortable, what innovation should make you (especially if you’re a senior executive)
V
W
X
whY, the one question you can never ask enough
Zzzz, what you finally get to do when you’ve changed the world
As you can see, some letters still need words. What should they be?
Are there better words for some letters?
Let me know in the comments!
The Truth About Innovation No One Wants You to Know
If you heard it once, you heard it a thousand times:
- Big companies can’t innovate
- We need to innovate before we get too big and slow
- Startups are innovative. Big companies are dinosaurs. They can’t innovate.
And yet you persevere because you know the truth:
Big companies CAN innovate.
They CHOOSE not to.
Using Innovation to drive growth is a choice.
Just like choosing to grow through acquisition or expansion into new markets is a choice.
All those choices are complex, uncertain, and risky. In fact:
- 70 – 95% of innovations fail
- 70 – 90% of acquisitions fail
- ~80% of market entry efforts fail
Hold on. The odds of failure are the same!
All three growth drivers have similar failure rates, but no one says, “Big companies can’t acquire things” or “Big companies can’t expand into new markets.”
We expect big companies to engage in acquisitions and market expansion.
Failed acquisitions and market expansions prove us (or at least our expectations) wrong. Because we don’t like being wrong, we study our failures so that we can change, improve, and increase our odds of success next time.
We expect big companies to fail at innovation.
In this case, failure proves us right. We love being right, so we shrug and say, “Big companies can’t innovate.”
We let big companies off the hook.
Why are our expectations so different?
Since the dawn of commerce, businesses engaged in innovation, acquisitions, and market expansion. But innovation is different from M&A and market expansion in three fundamental ways:
- Innovation is “new” – Even though businesses have engaged in innovation, acquisitions, and market expansion since the very earliest days of commerce, innovation only recently became a topic worthy of discussion, study, and investment. In fact, it wasn’t until the 1960s that Innovation was recognized as worthy of research and deliberate investment.
- Innovation starts small – Unlike acquisitions and new markets that can be easily sized and forecasted, in the early days of an innovation, it’s hard to know how big it could be.
- Innovation takes time – Innovation doesn’t come with a predictable launch date. Even its possible launch date is usually 3 to 5 years away, unlike acquisition closing dates that are often within a year.
What can we do about this?
We can’t change what innovation is (new, small, and slow at the start), but we can change our expectations.
Finish the sentence – “Big companies can’t innovate” absolves companies of the responsibility to make a good-faith effort to try to innovate by making their struggles an unavoidable consequence of their size. But it’s not inevitable, and continuing the sentence proves it. Saying “Big companies can’t innovate because…” forces people to acknowledge the root causes of companies’ innovation struggles. In many ways, this was the great A-HA! of The Innovator’s Dilemma: Big companies can’t innovate because their focus on providing better (and more expensive) solutions to their best customers results in them ceding the low-end of the market and non-consumers to other companies.
Be honest – Once you’ve identified the root cause, you can choose to do something different (and get different results) or do everything the same (and get the same results). If you choose to keep doing the same things in the same ways, that’s fine. Own the decision.
Change your choice. Change your expectations – If you do choose to do things differently, address the root causes, and resolve the barriers, then walk the talk. Stop expecting innovation to fail and start expecting it to be as successful as your acquisition and market expansion efforts. Stop investing two people and $10 in innovation and start investing the same quantity and quality of resources as you invest and other growth efforts.
The first step in change is admitting that change is needed. When we accept that “big companies can’t innovate” simply because they’re big, we absolve them of their responsibility to follow through on proclamations and strategies about the importance of innovation as a strategic driver of growth.
It’s time to acknowledge that innovation (or lack thereof) is a choice and expect companies to own that choice and act and invest accordingly.
After all, would it be great to stop persevering and start innovating?