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Back to Basics: What is Innovation?

Back to Basics: What is Innovation?

by | May 27, 2020 | Innovation

When I worked on P&G’s WalMart sales team, one of my bosses was a big guy with an even bigger personality.  He shared his opinions loudly and broadly and one of his opinions was that we needed to stop using the word “breakthrough.”

“If I have to hear one more time about some new ‘breakthrough’ soap, I will throw you out of this office myself!” he would bellow.

Years later, I can’t help but wonder what he would think of the word “innovation.”

In May 2012, The Wall Street Journal published an article positing that, as the word “innovation” increased in usage, it decreased in meaning.  The accompanying infographic said it all:

  • 33,528: Times “innovation” was mentioned in quarterly and annual reports in the previous year
  • 255: Books published in the last 90 days with “innovation” in the title
  • 43%: Executive who say that their company has a Chief Innovation Officer or similar role
  • 28%: Business schools with “innovation,” “innovate,” or “innovative” in their mission statements

That may seem like a lot but, remember, that data is nearly 8 YEARS OLD!

The desire for and investment in Innovation in all its forms – accelerators, incubators, startup/venture studios, corporate venture capital teams – has only grown since 2012.

While this may seem like a good thing, the fact that the success rate of innovations hasn’t changed, means that most people react to “innovation” the same way my boss reacted to “breakthrough” – if you bring it up, they throw you out.

To avoid getting thrown out of offices, one of the first thing I do with my clients when we begin working to build innovation into an enduring capability within their companies, is re-establish what innovation is and is not.

Innovation IS something different that creates value.

When people hear the term “innovation,” they tend to think of new-to-the-world gadgets that fundamentally change how we live our lives.  Yes AND it’s many other things, too.  Let’s break down the definition:

  • “Something” includes products and technology, it also includes services, processes, revenue models, and loads of other things. Consider this, many would argue, quite convincingly, that the Toyota Production System was one of the biggest innovations of the 20th century
  • “Different” often surprises people. After all, even Merriam Webster defines innovation as “something new.” But here’s the thing, one of the most commonly cited innovations, the iPhone, wasn’t “new.”  Even Steve Jobs admitted it when he said, in his keynote speech, that Apple was introducing three products – a widescreen iPod with touch controls, a mobile phone, and an internet connected device.  The iPhone was, however, different because it combined those three devices into one.
  • “Creates value” is probably the most important part of the definition. All innovations solve problems.  Solving problems creates value.  If you solve a big problem, either because it’s a problem lots of people have or it’s a very painful problem a few people have or something in-between, you create a lot of value for others and for yourself.
Innovation IS NOT a one-size-fits-all term.

Think of it this way, both a Kia and a Maserati are cars, but you wouldn’t expect to pay Kia’s price tag and get a Maserati (and vice versa).  Similarly, both a convertible and a pick-up truck are automobiles, but you wouldn’t use your convertible to carry building equipment to a construction site.

With a definition as broad as the one above, it’s possible for “innovation’ to become even more meaningless as it gets applied to more things.  That’s why it’s important to identify different types of innovation.

There’s no universally accepted set of innovation types, which is why I recommend companies consider defining at least three types that reflect their business and forward-looking strategies.

One of the most common set of innovation categories is based on the degree of change required for implementation:

  • Core Innovation requires minimal or no change to the current business model (customers, offerings, revenue model, resources and processes). Also known as Continuous or Incremental Innovation, this is the unglamorous but deeply important work of constantly improving what you do and how you do it.
  • Adjacent Innovation changes a significant change to at least one element of your business model. It could be changing who you serve, like expanding from interventional cardiologists to general cardiologists, what you offer, like P&G’s expansion into “durable goods” when it launched Swiffer, or how you offer or deliver it.
  • Radical innovation is the stuff that gets all the press. These innovations fundamentally change the business, like IBM moving from computers to business services.  These innovations are high-risk and require a lot of time, money, and patience to see to fruition.  This type of innovation is also called “Breakthrough” but, for obvious reasons, I shy away from that term.

There are many things that need to be done to shift innovation from buzzword to business capability. Defining innovation AND at least three different types is only the first step in moving from innovation theory and theater to building innovation into a true capability that drives sustainable growth.

Or, as I would tell my old boss, “It’s the first step.  But it’s a breakthrough one.”

Originally published on December 30, 2019 on Forbes.com

The Intrapreneur, Confessions of a Corporate Insurgent

The Intrapreneur, Confessions of a Corporate Insurgent

by | Feb 19, 2020 | Book Club

When I first heard about this book, a first-person account of innovating within a large corporation, and that it was set in a mental hospital, I thought “Yup, sounds about right.”

The craziest, most inspiring, and strongest people I have ever known are intrapreneurs. Because you have to be crazy to believe that you can change a massive organization, you have to inspire others to follow you into the fight, and you have to be strong to withstand near-constant defeat and, if and when success arrives, shine the spotlight no on yourself but on all the people who fought alongside you.

Gib’s story is similar to those of other Intrapreneurs.

He was in his early-30s and only a few years into his tenure at Accenture when he proposed the creation of Accenture Development Partnerships based on his experience working with Voluntary Service Overseas (VSO), a program in which business professionals would be loaned out by their employers (who would hold their jobs for 6–12 months) to work as volunteers in developing countries. Corporate social Responsibility (CSR) was all the rage at the time and, Gib reasoned, Accenture was well positioned to replicate VSO’s model given its global staff of bright young consultants and list of clients eager to appear to do good in the world.

The next 15 years were a roller-coaster, one familiar to anyone who has tried to innovate in a corporate environment. The ups of getting support, seeing things work, and watching change unfold. The downs of losing champions, justifying your existence, and fighting to maintain your meager resources despite phenomenal results. The ride ended not with a return to the station (aka a quiet role back in the core business) but with a four-day stay at a psychiatric hospital when his friends and family became concerned about his manic energy and fixation on creating a “Fourth Sector” that would combine the best of the public (government), private (business), and third (NGO) sectors to serve humanity’s greatest needs.

3 Profoundly True and Important Messages

Even though his story is one I lived early in my career, when I was an intrapreneur at P&G, and one that, as a corporate innovation consultant, I’ve seen others live, there were three passages in the book that I found so profoundly important and true that they simply must be shared

Innovation, and lack thereof, is a leadership problem.

“At its core, the problem is about leadership. Too many people believe leadership comes as the result of a promotion — or from a fancy job title on a business card. Not at all. Leadership is more of a mindset than a skillset. Leaders can emerge at all levels of an organisation, even low down.”

Corporate antibodies are the #1 killer of innovation

(Reflecting on an unsupportive executive):

“(Executive) was old school leadership. He’d climbed the ladder in the Business 1.0 world. He was programmed to have a single-minded focus on the business fundamentals — an entire career spent cutting cost, growing revenues, driving efficiency. What’s the problem with that? You might ask. It certainly worked for him, and he’d reached the heady heights of the senior management ranks.”

(When asked it this executive was the main problem):

“Yes and no. We also got confronted by legal, tax, compliance, security, you name it. My team bore the brunt of their endless checks, audits, and bureaucracy. I remember having a very strong feeling that we were suffering from a thousand cuts and I was powerless to do anything. Good people were leaving our team out of sheer frustration or pressure.”

Intrapreneurs are the heroes this world needs

“Intrapreneurs are not content with business as usual and aspire to drive change bottom up and inside out of their own organisations. These are the people who won’t change companies when they get frustrated in their jobs or crave more purpose from their careers. Instead, they stay put and change the companies they’re in….

No one ever said it would be easy. Of course it’s risky for your career. Sure, you’ll be laughed at. Told you’re crazy. Overlooked for promotion. Yes, you might even lose your job. I often think of the reactions that a Picasso or a Jackson Pollock must have had when they shared their first works of art. Or how silly that first person trying to start a Mexican wave must have felt when they stood up screaming with their hands in the air, only to find they were the only one. My point is that you may have to be prepared to appear crazy to others if you’re going to be successful in driving change in any organisation.”

In closing

The Intrapreneur is a good read (though it does get a bit self-congratulatory in parts). Reassuring to other intrapreneurs that they are not alone. Perhaps eye-opening to executives who wonder why their organizations aren’t more innovative. Definitely the story of someone on the edge of sanity. Because all intrapreneurs are.

5 Fave Innovators of 2019

5 Fave Innovators of 2019

by | Dec 3, 2019 | Leadership

It’s that time of year.

The time when we look back and take stock, and look forward and plan. So, it is in that spirit that I offer you my completely subjective list of the top 5 innovators of 2019.

Here’s the “criteria” for making the list:

  • Received media coverage (including traditional media, blogs, newsletters) BUT not so much that they’re amongst the “usual suspects” (e.g. FAANG CEOs)
  • Did, or currently doing, something different that creates value (i.e. innovation)
  • Exemplified the characteristics of an innovator including, but not limited to, courage, creativity, customer-centricity, perseverance, humility, and humor.

Without further ado, here’s my Top 5 Innovators:

Corie Barry, CEO of Best Buy

for exemplifying resilience and loyalty throughout her career

According to this fascinating Fortune article, early in her career, Corie Barry received a performance review that labeled her as a “risk to the organization.” Most people would take that as a sign that their days were numbered but Barry looked for the “nugget of truth” that contained the “things I need to work on” and “buckled down,” even creating her own development plan.

In 2012, when Best Buy seemed to be on its death bed, Barry buckled down again, choosing to stay with the retailer.

“If your purpose is stewardship, and leaving when things are bad is the ultimate crime,” she recalled.

Her perseverance, resilience, and loyalty paid off when, in June, she was named CEO of Best Buy and, at 44, the youngest female CEO in the Fortune 500. In September, she laid out a plan to Wall Street to grow her new charge from $43B in revenue to $50B by 2025.

That type of growth may seem like a long shot given all the talk of a “retail apocalypse,” but if her past is any indication, I wouldn’t doubt her for a second

Alex West Steinman, Bethany Iverson, Liz Geil, and Errin Farrell, Co-Founders of The Coven

for bringing inclusivity and diversity to a place where it’s not often found

I grew up in the Midwest (Cleveland, to be specific) and while I will be eternally grateful for that fact and will defend my Ohio roots (and sports teams) to the day I die, I will also be the first to admit that it’s not perfect.

And one of the Midwest’s many imperfections is it’s utter lack of diversity. That’s why Alex West Steinman makes this list.

In 2017, along with three other co-founders, Alex founded The Coven, a co-working space in Minneapolis. But The Coven is more than a local WeWork, it’s mission is to “economically empower women by providing safe, accessible space for personal and professional transformation.”

The Coven’s business model reflects its mission — for every 5 memberships purchased, the business gives one to a member of the community that couldn’t afford it, “prioritizing people of color, folks from the LGBTQ community, those who are differently abled, immigrants, and veterans.”

Now boasting 2 locations, 600+ members (including 140 at no cost), The Coven is making important progress in bringing diversity and inclusivity to innovation, entrepreneurship, and its Midwest community

Marcela Sappone and Jessica Beck, Co-founders of Hello Alfred

for the courage to go against the grain and do the right thing

Hardly a week passes when we don’t hear of the legal, economic, and ethical problems of the giants of the Sharing Economy choosing to designate their labor forces as contractors instead of employees.

Every company except for one.

When Marcel Sappone and Jessica Beck founded Hello Alfred while getting their MBAs at Harvard Business School, they were the Alfreds — running errands, doing odd-jobs, and responding to requests at all hours of the day and night. And when they had proof of concept, they began to design a sustainable and scalable business model. One with W2 employees.

Yes, they met resistance from investors, even being turned down by some because of their choice but they remained committed to their model because they believed that the success of their business required relationships, not just transactions,

“There should not be a disconnect between the success of a company and the success of its workers. We believe treating our employees as our primary customer is how we can best satisfy our end users.”

Sappone lays out the full argument in this 2015 Quartz article and the benefit of her stick-to-it-tiveness is undeniable. Now in 20+ cities and with 200+ employees, Hello Alfred raised a $40M Series B round in 2018, giving it the highest valuation in its competitive set (e.g. Task Rabbit and Nextdoor)

Jean Brownhill, Co-founder of Sweeten

for solving two problems with one solution

For two years, we’ve need to repaint our house. We originally contacted the painter who painted the house when it was built in 2013. One year and no progress but lots of sketchy stories later, we gave up and called a 2nd painter. He looked over the job and called us back to say he wasn’t comfortable doing it because he was friends with the original painter. He referred us to a 3rd painter who also came to scope the work, only to engage in absurdly belligerent text messaging when trying to nail down the logistics of the job. We talked to a 4th painter in summer 2019 and he agreed to do the work in spring 2020.

Because of this experience, and far too many others like it, Jean Brownhill and the company she founded, Sweeten, are on my list of 2019 Faves.

An architect by training, Brownhill founded the company after her own frustrating experience with a contractor. The concept was simple — Sweeten would match home owners with renovation projects to vetted general contractors and would take care of all of the back-office work that customer service, documentation, and marketing.

Sweeten’s projects have grown from an average of $2000 to over $100,000 in the past eight years and the company now boasts $1B in construction business and 1,5000 vetted contractors in it’s pipeline, according to an article in Architectural Digest.

This success has led to the creation of Sweeten Accelerator for Women (SAW) and initiative to actively recruit female general contractors into the platform and redesign the matching algorithm to allow home owners to select the gender of their contractors.

In an industry in which women comprise only 3% of the workforce and make $0.91 cents on the dollar compared to their male counterparts (interestingly, one of the smallest gender pay gaps of any industry), the effort simply makes sense,

“A shift in the professional paradigm for general contractors would mean more opportunities for women to enjoy business ownership and greater wealth, and would diversify the client experience in important ways.”

Angela Ahrendts, former SVP retail at Apple

for following her heart

Much has been written about Angela Ahrendts — her childhood in Indiana, her education at Ball State, her early career in fashion in NYC through to her triumphant reign as CEO of Burberry, and her “shocking” move to tech when she joined Apple.

Yes, it is all amazing.

So was her decision to walk away from her role at Apple, where she was the company’s highest paid exec, earning 2x the salary of the CEO, and the company’s only female SVP. She walked away without apology or explanation.

Testament to the fact that, sometimes, leaving something is just as powerful and inspiring as starting something.

Hope you enjoyed my Top 5!

Who made your list? Who did I miss?