January 3, 2019
When I give talks or workshops about how to bring new ideas into a company, one of the first things people ask me is how their company compares to other businesses. They’re curious about where they fall on the innovation spectrum.
This is how I explain it to them.
Who’s allowed to contribute
When it comes to innovation, I see two kinds of companies.
The first is the companies that work hard to innovate. These are the ones that have a specific group of people tasked with coming up with new ideas. Sometimes they’re product managers. It could be a research and development group. Or even a group that’s specifically been given the “innovation” label.
They’re quarantined off from the rest of the business so they can focus on innovating. They’re the Ph.D. engineers. The design thinkers. The SMEs of the organization. Innovation and the responsibility for it sits squarely on their shoulders.
But if you ask anyone else in this type of company for new ideas, they say one of two things.
First is, “That’s not my job.”
When there’s a group that’s specifically tapped for innovation, everyone else believes they’re off the hook. They don’t have to think about better ways to do their job. In this scenario, I look at things that a team or even an individual is doing and it’s common sense about how to improve their systems or processes. There’s no reason to look at their work from an outside perspective because that’s someone else’s responsibility. They show up day-after-day doing their work in exactly the same way.
The second response people give is, “I’m not smart enough.”
When you get specific about the qualifications of the team of people responsible for new ideas, you make everyone else think they’re dumb. An accountant isn’t going to use design thinking to do a better job of paying invoices. An HR rep won’t use predictive modeling before using a new approach for how meetings are managed. The sophisticated strategies that people use for product and service innovation don’t overflow into the general employee population.
In these companies, the suggestion that anyone outside of the innovation group should come to the table with a new idea makes regular employees worry that, somehow, they’ll be wrong. They don’t want to risk looking stupid.
Companies that innovate focus on new ideas for the products and services that they sell. And that’s where it stops.
Now, compare this with the second kind of companies that I see – those that are innovative.
Innovative brands believe that everyone in the organization has responsibility for big thinking and great ideas. They expect each employee to get creative with how they can do their job better in the big picture of the company’s business objectives.
Innovative companies believe in the democracy of great ideas. They know that you can’t realize open innovation when you practice closed participation.
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Getting back to the conversations that I have with people about where their company falls on the innovation spectrum, I see four archetypes of innovators:
#1 The One-Hit Wonder
These companies came out of the box and they had amazing, huge success in a product or service. Everybody went crazy over it…but that’s the best they ever did.
Once we were big fans of AOL, Palm Pilot, MySpace (well, maybe not everyone), MapQuest and Tivo. And think, when’s the last time you talked about any of them other than as the butt of a joke?
#2 The Cling-On
There are companies that have one really good idea, and then over time they desperately cling onto that success and how great it felt. After their initial charge, they never really come out with anything new. Everything turns out to be just a slightly different twist on their first success. Companies like Blockbuster and Sears acted with a Cling-On mindset. The glory days were just too great to let go of, so they never did. And we know how those strategies worked out.
#3 The Steady Eddy
Steady Eddies are the reliable companies that keep plugging away. They never disrupt a market by turning it up-side-down, but they consistently put out products that make people pause and take a look. Unlike the market disruptors that do BIG innovation they stay steady over the years. These are the brands that deliver innovation with a little “i.” They’re steady and reliable, but they wouldn’t be labeled a game-changer.
These are the 3Ms and Xeroxes of the world. Microsoft is such a Steady Eddy that you can see it in the name of the products it’s launched over the years – Windows 1.0, 2.0 and 3.0 series, Windows 95, 98, 2000, Windows 7, 8 and 10. The list will probably go on forever.
With a steady string of patents and new, dependable products that keep risk-averse customers in place, these companies steer clear of the graveyards filled with the One-Hit Wonders and Cling-Ons. They’re smart enough to realize that being overly responsible with innovation leads to irresponsible stagnation. The Steady Eddies keep paychecks coming for employees and dividends for shareholders. But they’ll never knock your socks off.
#4 The Perpetual Innovator
Organizations that are persistent and open to new things welcome ideas from anyone. They understand that before they can have great ideas, they have to have more ideas that are of better quality. They look at inspiration from outside their industry, and they’re able to get people excited about change – both customers who buy and the employees who deliver it. These are the Amazons, the Googles, the Teslas of every industry. They see perpetual innovation as something that’s a true part of their culture.
Look at Netflix, one of the most successful Perpetual Innovators in the history of business. It started as a front-door DVD delivery service that rivaled movie-rental stores like Blockbuster. Through perpetual innovation, the company has grown from subscriptions to a physical product to subscriptions for streaming content. It wooed a team of writers and developers so it could deliver original programming. Netflix created prestige and credibility for itself through shows like House of Cards and Orange is the New Black. The company continually innovates the experience by removing customer pain points before customers realize they exist.
Don’t want to click to watch the next episode? No problem, Netflix now has a six-second countdown that takes away the need to decide. Too impatient to sit through the trailer on each episode of your favorite show? No problem, just click to skip the intro. By being a consistent, Perpetual Innovator, Netflix has revolutionized the way people watch movies and TV shows.
Companies are always scrambling for better returns. They look at the cost of customer acquisition, churn and lifetime value. There’s a meticulous strategy about how to make revenue numbers and the next product release.
But the most successful companies in the world are realizing bigger than life returns because they have a mindset about who owns great ideas and how they’re introduced into an organization. These are the companies that expect everyone to contribute so they can perpetually innovate across the organization, not just across a portfolio of products.
Innovative companies, the Perpetual Innovators, understand that innovation is what keeps people coming back. Whether that’s your customers, your prospects, your shareholders or your employees.
Photo credit: (c) Carla Johnson