An excellent Q&A feature in the Wall Street Journal about managing innovation. Some key points:
1) Thinking long term:
– Very difficult to do in most big companies, which have resources, but don’t always have the processes, skills and permission to think outside their current business. “Corporations inherently have antibodies that come out and try to envelop and kill any innovation.”
– An analogy: large companies are like farms, in which you are trying to grow rows of corn. You don’t want surprises and you apply incremental innovation to be productive. In contrast, start ups are more like a small garden, requiring a different level of nurturing; or a greenhouse where you want to keep out the elements. The conclusion is the most disruptive innovation comes from start ups and research. Or, you can develop a small garden or greenhouse on the larger farm. But you have to keep them separate. And then the challenge later is transplanting.
2) Changing the culture:
– How do you change the culture of a company to make it more innovative? “With great difficulty.” Four main factors: awareness and attitudes (need a degree of discomfort in your business to make the necessary changes); ways of thinking (a shift from analytical thinking to design thinking); processes and tools; and managing risk (through rapid prototyping, etc).
– Companies have to be willing to have project fail. And link this with HR and back it up in annual reviews. Reward people even if they “failed”, as long as the failure wasn’t for lack of trying or somebody blatantly mis-executing.
– To draw on the wisdom of the crowd, you have to have the openness in a company in which there is collaboration across multiple functions.
3) Barriers to innovation:
– The things companies have done for quality and efficiency are enemies of innovation.
– Everybody will say a new idea is too small. Going in front of a committee, and having to show a return on investment, are processes to vet an idea, but that stop people from trying and kills the surprises that are going to end up being big.
– Cultures kill what’s not like them. “Innovation is something that isn’t like me today.” The trick is figuring out how to protect new ideas.
– Do checkpoints along the way: build a good product, get feedback from customers along the way, look at early market adoption. But ultimately measure by looking back after a few years and asking, “Has this become a successful business?”