Tuesday, April 3, 2007

Innovation Tools Part 6: “A” students vs. “C” Students

I worked with a company one time that brought in some high-priced consultants to teach the employees how to innovate. We did all sorts of interesting exercises and pitched new projects to each other.

What was interesting to me was that the consultants kept saying that creativity was irrelevant in the innovation process. They said that creativity and ideas had no value. Only projects that come to life have value.

Therefore, the process being taught did not look for creativity or ideas. Instead, the process consisted of trying a large number of small experiments in a variety of directions. The ones that showed any sort of life would continue to get funded. The others would not.

Over time, I noticed that many of the employees in the process also started downgrading the value of ideas and creativity. They bought into the belief that if we just do a bunch of things, eventually a good thing will come out of it. The most interesting part was that the people who were most adamant about ideas and creativity be worthless also tended to be among the least creative people I have ever met.

Another employee who was watching this process said to me, “What the consultants are trying to do is take a bunch of “C” grade level innovators and turn them into “B-” level innovators. Unfortunately, this process will never create any “A” level innovators.”

Although a lot of busy work came out of the process, in the long run, no successful innovations were built via this process.

This is the last in a series of a series of blogs on how to think about ways to create new business innovations. There are many different theories and processes used to try to get more innovation out of a company. If you have the money, there are people who will take it in order to teach your employees how to innovate, as happened in the story above.

Yes, it is true that through learning, one can become better at innovation. However, I also believe that some people’s brains are wired in a way that makes them naturally better at innovation than others. In terms of true innovation, I would rather have a small handful of “A” level innovators working on the process rather than hundreds of “B-” level employees working on innovation.

It’s like the story that if you get enough monkeys typing on enough word processors, by random chance eventually you will have one of them write the great American novel. Maybe I’m old fashioned, but instead of putting thousands of monkeys on the task, I’d rather just commission a great American novelist to write the book. In many ways, I feel the same way about innovation. I’d rather put a small number creative people with lots of ideas on the task than teams of non-creative people who learned a process. In the rest of this blog, you will see why.

The important thing to note is the difference between innovation and business improvement. Business improvement is about improving your position in the current paradigm. I call it the “More Better” principle. It’s just like the good things you did before, only you are doing more of it and you are doing it better than before.

Many of the concepts being taught in the story above work well in developing “More Better.” Try lots of small experiments throughout the organization and feed the winners, starve the losers. Wal-Mart has prided itself for decades on its ability to have small experiments going on all over the company and then use its rapid communication network to get the best experiments propagated quickly across the entire chain.

These principles did not create an innovative new retail format. They just made Wal-Mart one of the best at operating these retail formats. Wal-Mart did not invent the discount store or the warehouse club or the supercenter formats. They just copied good ideas that they saw elsewhere and made them better. This is a good thing, but this is not innovation.

Innovation is creating a business opportunity in a space that did not exist before. This is something completely different from “more better.” Running a current business well and creating the new businesses of the future take very different skill sets. There have been enough studies done and books written to conclude that if you try to have the same people work simultaneously on making the most of the current business model, while at the same time work on creating the new business models of the future, they will fail at both.

In the book “Built to Last” the authors called these distinctively different tasks with distinctively different skill sets “preserving the core” versus “stimulating progress.” In the book “Creative Destruction” the authors called it “operating” versus “creating.” Because the two tasks are so different and require such a different mindset, one can not be efficient or effective switching back and forth between these mindset.

In the story above, the consultants started by having the participants from the company split their time between innovation and running current businesses. It turned out to be a failure, so they switched to full-time innovation.

I don’t think most football teams would try to train an offensive lineman in how to be a better quarterback. It is a different skill, needing a different body type and a different mindset. Even if you could make him a slightly better quarterback, he will probably never be good enough to deserve to be your quarterback. Instead, the team would go out and find a naturally gifted quarterback and leave the lineman to become a better lineman. Similarly, a football team would not have every player on the team take turns at being the quarterback. It would cause too much confusion, chaos, and inconsistency of performance. Instead, only a few people with the quarterback skill-set would work at the quarterback position.

I believe the same is true in innovation. Get a skilled player for that position and leave the other people working on their different skills.

Then, there is the question of millions of small experiments versus one big bet on the future. Either extreme can get you in trouble. To optimize efficiency and effectiveness one needs to balance two issues:

1) Enough ideas so that there is flexibility, in case the ideas do not pan out.
2) Few enough ideas so that you can focus your effort and your strategy.

My experience has been that if you get a small handful of “A” level natural innovators, they will provide more than enough innovative ideas for the company to tackle. However, if you open it up to big innovation all over the company, the company will choke on all of the activity and never be able to get enough focus to get the right ideas implemented.

Great innovation is often more successful when it leverages off the strategic strengths of an organization. By having a few people focusing on innovation, they can ensure that it stays on course for optimizing you strategic intent. When it becomes random and diffused throughout the organization, the ideas can deviate wildly from plan and even be contradictory to what someone else is doing.

It is difficult enough to bring a successful innovative idea to reality when it is carefully
nurtured and focused on. In a land of chaos, the likelihood of getting through the entire process successfully is near nil.

Finally, there is the “power of veto” in an organization. If innovation is thrust into the main organization, there are too many people with vested interests in the status quo who can veto the innovation. There’s a reason why some of the greatest innovations from large companies were hidden away in remote locations outside the normal business process. It was the only way to keep them alive and out of site from the veto-ers.

There are many reasons why I believe that true innovation should be put in the hands of a few who are naturally gifted in the area:

1) It takes a different skill set (go with people who have it)

2) It takes dedicated focus (away from normal business responsibilities)

3) You will get fewer, but better ideas—plenty enough to work with

4) There is greater likelihood of getting ideas consistent with your strategic intent.

5) Separation is needed to avoid being vetoed by the status quo

Therefore, when looking for a new innovation, bring in the “A” team.

Some people may argue that there aren’t enough “A” players to go around. Well, there are companies out there like IDEO with a reputation of nurturing great innovation. Great innovators know about these companies and flood them with resumes—more than they can possibly absorb. I don’t care if everyone can get an “A” player, only whether I can get an “A” player. If you get the right reputation, you will get these people.

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