Call it innovation on steroids. Or innovation at warp speed. Or just the innovation of rapid innovation.
But the essential point remains: Technology is transforming innovation at its core, allowing companies to test new ideas at speeds—and prices—that were unimaginable even a decade ago. They can stick features on Web sites and tell within hours how customers respond. They can see results from in-store promotions, or efforts to boost process productivity, almost as quickly.
The result? Innovation initiatives that used to take months and megabucks to coordinate and launch can often be started in seconds for cents.
And that makes innovation, the lifeblood of growth, more efficient and cheaper. Companies are able to get a much better idea of how their customers behave and what they want. This gives new offerings and marketing efforts a better shot at success.
The Speed of Change
- The Evolution: Technology is allowing companies to test new ideas at speeds—and prices—that were unimaginable even a decade ago.
- The Effect: Innovation, the lifeblood of growth, is growing more efficient and cheaper.
- What’s Ahead: Innovative companies will shift away from traditional research-and-development methods. Managers will change the way they solicit ideas. And much, much more.
Companies will also be willing to try new things, because the price of failure is so much lower. That will bring big changes for corporate culture—making it easier to challenge accepted wisdom, for instance, and forcing managers to give more employees a say in the innovation process.
There will be even better payoffs for customers: Their likes and dislikes will have much more impact on companies’ decisions. In globally competitive markets, they will ultimately end up getting products and services better tailored to their needs.
Already, this powerful new capability is changing the way some of the biggest companies in the world do business, inspiring new strategies and revolutionizing the research-and-development process.
“In the U.S., we do the vast majority of our concept testing online, which has created truly substantial savings in money and time,” says Joan Lewis, global consumer and market knowledge officer at Procter & Gamble Co.
Finding the Link
What does all of this experimentation look like in practice?
Consider Google Inc., which runs 50 to 200 search experiments at any given time. In one case, Google asked selected users how many search results they would like to see on a single screen. More, said
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As an evangelist of prototyping for more than a decade, I say “amen” to Brynjolfsson and Schrage’s comments. Innovation is a lot like staying in shape – a little done consistently is better than one exhausting push or doing nothing at all. Today more than ever, it’s important to find ways to invest in a series of small experiments that will enable you to try new things quickly, learn from them, and make necessary adjustments. This practice will not only keep some momentum going but also elevate the visibility of innovation already happening within your organization. And technology is not the only enabler of this practice – “experiential” prototyping can be accomplished with things that are probably laying around your office right now…
Laura Weiss, SM ’97
I am in complete agreement regarding design of small experiments. In my experience this is applicable across functions- Manufacturing, procurment, sales, Marketing.
It deliveries quick results and with proper modelling, rapidly scalable, often it does not cost much and provides visible proof of success & generates confidence in the executing team.
Prashant Chhaya
Working in online marketing, I can see how quickly testing is changing the game. With multivariate and a/b testing becoming more and more prevalent online, decision making about web design will no longer be left to only professional opinion and focus groups, but to user generated data.
It’s exciting to see that the culture of innovation is taking over and with that an open mindedness towards experimentation.
Great piece, Michael and Erik.
A question I’ve focused on in my business is how to enable my employees here at Cambridge Innovation Center to innovate. One fun thing that we did a few years ago was to implement an ERP-type system that can be modified on the fly without programming experience. This allows individual employees who think of a new way our company should operate to just make it happen, rather than call a meeting with IT, or add their new requirement to a list that an outsourcer might implement a year in the future. The system, which runs on Intuit’s online Quickbase platform, is designed so that regular people can add functionality without special training.
When we decided to start tracking and recognizing business successes amongst our clients, for instance, one of my employees created a new part of our system called “Client Milestones” to do this. Amongst other things, it emails all of our employees about the success, e.g. “Gloucester Pharma just raised $29M!”. I don’t know which of our employees did it, and it doesn’t matter.
I’d be interested in examples other readers have of how their companies, in a concrete sense, help their employees innovate faster.
Erik,
This is a great topic and I agree with you that the future of innovation will be faster paced and potentially more tumultuous.
In addition to digital technologies assisting companies with the pace of innovation, there is the possibility of creating entirely new products and businesses purely on the competitive strategy of faster innovation using digital technologies.
Sesha
Innovation is always been a backbone for all the companies either big or small. Companies always have to rotate people in all functions , those are the most valuable resource in the company.
Saravanakumar
Excellent article! Innovation in today’s society is moving so quickly that it is allowing companies the flexability to see what is working well for them and what isn’t. These experiments are helping to keep the cost of doing business reasonable.
Great work guys. My only issue with this premise and frankly all theoretical hypothesis is that they are just that. Sure, you can use much of this in your business IF you dont have to worry about building product, delivering solutions, managing customers, marketing, sales, finance, client issues, R&D, etc. I agree with all that Michael and Erik have said, and think the article makes total sense and its what I consult my clients to do, but bridging the gap between the luxury of having the time to do all this and actually doing what conceptually makes sense is a very difficult challenge for most businesses. They simply dont have the time or resources i.e. luxury to experiment when they are struggling to meet stock holder and market expectations or even stay in business. Yes, you can experiment tactically i.e. in certain segments, products, end caps, isles, brands, etc. But most business I know big and small have a very hard time bridging the gap between the conceptual buy in and the actual time and resources to actually execute. That ultimately is the crux of the matter. I agree completely with the article, but there should be some thinking on the practical and realistic ways in which to incorporate the theoretical.
Excellent, Henry Ford supposedly said if he asked customers what they wanted they would have asked for a faster horse. Innovation doesn’t always work when you ask customers what they want but if you can put different choices in front of them rapidly and cheaply, you will tell very quickly what works and what doesn’t.
One of the biggest killers of innovation is the evaluation process. Being able to experiment with and sense the market is a great way to test innovations.
Seriously playing at innovation is a team sport… so one way of making Inn’n happen is to collaborate with individuals across departments… internal or external to organisation. But remeber the definitions of collaboration…
1. To work together, especially in a joint intellectual effort
2. To cooperate treasonably, as with an enemy occupation force in one’s country
If your bosses see def’n 2 as the one.. then life can be tougher… but we can work as def 1. and then show bosses the benefits that they can own… ego job.
We made it work for 15 years but it was a challenge every day… but rewards were worth it so we were tolerated!
Oh and I should have said.. let them evaluate results not assertions hence collaboration of individuals!