Nowadays, goes the theory, innovation is supposed to be done constantly, by everyone in the company, improving everything the company is about — and new Web-based tools are here to help it happen. Is the theory right? Or do the experiences of companies reveal something different?
Historically, most managers equated innovation primarily with the development of new products and new technologies. But increasingly, innovation is seen as applying to the development of new service offerings, business models, pricing plans and routes to market, as well as new management practices. There is now a greater recognition that novel ideas can transform any part of the value chain — and that products and services represent just the tip of the innovation iceberg.
This shift of focus has implications for who “owns” innovation. It used to be the preserve of a select band of employees — be they designers, engineers or scientists — whose responsibility it was to generate and pursue new ideas, often in a separate location. But increasingly, innovation has come to be seen as the responsibility of the entire organization. For many large companies, in fact, the new imperative is to view innovation as an “all the time, everywhere” capability that harnesses the skills and imagination of employees at all levels. Making innovation everyone’s job is intuitively appealing but very hard to achieve, but many companies have tried — and nearly all believe that’s it’s critical to continue trying.
This article explores the process of innovation in 13 global companies. Many of the standard arguments for how to encourage innovation in large organizations were confirmed, but some surprises were uncovered as well. The article organizes its key insights around five persistent “myths” that continue to haunt the innovation efforts of many companies. The five myths are: (1) The Eureka Moment; (2) Built It and They Will Come; (3) Open Innovation Is the Future; (4) Pay Is Paramount; and, (5) Bottom Up Innovation Is Best.
7 Comments On: The 5 Myths of Innovation
Well made points – Sun Tzu said it centuries ago – “Preparedness everywhere means lack everywhere”
To expect innovation everywhere and always is to waste your resources – instead the key to improvement is knowing where you are constrained and focusing your efforts at that leverage point.
Michael A. Dalton
Author of Simplifying Innovation
Quest for innovation is a never ending story, but must not be a “end”, itself. Just a way, to get “out of the box”, create “blue ocean” and take advance in competition fields. And companies must be prepared and organized for it, by creating the mindset and the taste for it. Innovation places are such fuels of motivation for people, that they have to live inside the daily life of companies. Quite in DNA, if you look at innovation trendsetters say…
We can find good examples outside the companies, collaborative places that can help the level of awareness and interest of corporation. See for example innocentive.com, for me a very good sample of what already works…
I think innovation is misunderstood, mismanaged and overrated at many companies and the amount of time for realization is underestimated.
This article helps to drill down on what innovation could/might be and helps us to understand it and the required lengthy time horizons for realization/execution much better.
Well done.
Phil Corse
Kellogg School of Management
An excellent article. The key takeout for me is that innovation is a balance, there isn’t a “one shot” solution. It’s the balance between creativity and implementation; between customer needs and technology options; making sure the best options are implemented, whether internal or external; between top down directives and bottom up energy. Also, that innovation is more about people not process; hence the observation that financial reward doesn’t make a difference to idea suggestion.
Thank you.
Kevin McFarthing (Innovation Fixer Ltd)
Useful learning the balanced conclusions from this research.
One immediate thought that struck me is that Innovation is probably going through the stage of maturity that Quality went through in the late 1980s. Yes, ultimately it’s about empowering people, there are multiple tried-and-tested approaches and techniques to equip people with, measuring results is paramount but just throwing money on a borrowed scheme is not going to succeed… and so on.
Corporate Size Is the Antithesis of Innovation
Your article ignores the more important consequence of size which inhibits innovation, change, growth and entrepreneurship. Your study sample is mostly of larger companies that don’t really know how to innovate.
The issue is best evidenced by comparing the performance of different types of companies. Between the years 2002 and 2010 ,the results of buying 50 shares each of the following large prestige leading Companies : Coca-Cola , Citi , Dell , Exxon-Mobil , G.M. , G.E. , I.BM. , Disney, 3M, Johnson & Johnson, Microsoft, Wal-Mart, Pfizer and Proctor & Gamble are as follows: You would have invested about $32,000 and lost about $ 3000 or almost 15%. .
In contrast if you bought 100 shares of Cognizant, Ralph Lauren, Google, Hanes, Coach, VMware, Costco, Apple, and Amazon in 2002 or whenever they went public the results are as follows: You would have invested about $ 26,000 and it would be worth almost $ 132,000 or about a 20% annual return.
What is ignored is that many large companies lack the structure and commitment to create effective environments because of inherent constraints:
• In your article on myths in( comparison to other great articles on analytics in the issue) you ignore several aspects that may be responsible for the results reported :
o Large organizations frequently have tunnel vision, organizational constraints and ignore emerging challenges, technologies and opportunities. Thus, it is not the factors you describe but their execution that is wrong. It is interesting that 2 spin-offs of Sara Lee(Coach and Hanes) have done spectacular
o They lack the flexibility to respond to urgent needs or changes in their environment and use outdated solutions and technologies.
o You seem to take an all or nothing approach to evaluating these tools rather than understanding the integration and environment affecting innovation. For example bottom up or open systems still require goals, measurement and focus which do tend to get ignored in the enthusiasm of new programs.
o Similarly, criticizing the Eureka moment should not be interpreted to encourage the squashing of deviant, new and challenging ideas.
.
Most companies need to examine and adjust their capabilities to compete in a changing and complex market place. In particular, professional cultures and decision making need to replace hierarchies which are the cornerstone of size. Organizations are frequently focused on control, minimizing risk and treating everyone equally. Instead I argue that we need to learn to accept and accommodate deviant behavior. This is best exemplified by companies like Apple and Facebook who have thrived as a result of special leadership.
In summary “Size does not matter anymore “, the performance of innovative companies in the last 10 years is the best evidence. In order to be flexible in our changing environment, companies simply need to have more focus at the operating level than the corporate level. Most important we need to identify, support, encourage and reward traits like deviance, innovation, passion, and commitment,
RG wrote: “Useful learning the balanced conclusions from this research.
One immediate thought that struck me is that Innovation is probably going through the stage of maturity that Quality went through in the late 1980s. Yes, ultimately it’s about empowering people, there are multiple tried-and-tested approaches and techniques to equip people with, measuring results is paramount but just throwing money on a borrowed scheme is not going to succeed… and so on.”
I agree that at the core is it really about empowering people. It is also about changing the perspective of those people as well.. for example Made in China to Invented in China. Large shift in perspective that will no doubt empower in directions never before dreamed of…