Why Innovation Matters

Another myth is that innovation is for geniuses like Chester Floyd Carlson (the inventor of photocopying) or Leonardo da Vinci: Throw some money at the oddballs in the R&D labs and hope something comes out. This is wrong. The notion that innovation occurs only when a lone genius or small team beaver away in the metaphorical (or actual) garage leads to a destructive sense of resignation; it is fatal to the creation of an innovative enterprise.

Of course, geniuses exist and, of course, they can contribute bottom-line-bending inventions (see Jobs, Steven). But companies that wait for "Eureka!" moments may well die waiting. And remember, while da Vinci designed a flying machine, it could not be built with the technology available at the time. True innovation matters for the present, not for centuries hence. Another genius, Thomas Edison, had the right idea: "Anything that won't sell, I don't want to invent. Its sale is proof of utility and utility is success," he told his associates in perhaps his most important invention -- the commercial laboratory. "We can't be like those German professors who spend their whole lives studying the fuzz on a bee," he said. Generating ideas is important, but it's pointless unless there is a repeatable process in place to turn inspiration into financial performance.

Innovation is a Social Process

To succeed, companies need to see innovation not as something special that only special people can do, but as something that can become routine and methodical, taking advantage of the capabilities of ordinary people, especially those deemed by Peter Drucker as knowledge workers. It is easy to put it off because you are rewarded for today's results, because the organization doesn't seem to support or value innovation, because you don't know where to find ideas, because innovation is risky, or because it is not easily measured. But these are excuses, not reasons. We have both observed and practiced innovation as a process that all leaders can use and continue to improve. It is broader, involves more people, can happen more often, and is more manageable and predictable than most people think.

But making innovation routine involves people. In real life, ideas great or good do not seamlessly work their way from silo to silo. No, from the instant someone devises a solution or a product, its journey to the market (or oblivion) is a matter of making connections, again and again. Managing these interactions is the crux of building an innovation organization. In a phrase that will recur throughout this book, innovation is a social process. And this process can only happen when people do that simple, profound thing -- connect to share problems, opportunities, and learning. To put it another way, anyone can innovate, but practically no one can innovate alone.

When you as a leader understand this, you can map, systematize, manage, measure, and improve this social process to produce a steady stream of innovations -- and the occasional blockbuster. Innovation is not a mystical act; it is a journey that can be plotted, and done over and over again. It takes time and steady leadership, and can require changing everything from budget and strategy to capital allocation and promotions. It definitely requires putting the customer front and center, and opening up the R&D process to outside sources, including competitors. But it can be done.

And no, belying another myth: Size doesn't matter. Innovation can happen in companies as large as P&G, Best Buy, GE, Honeywell, DuPont, and HP and as small as my father's shoe store in India. I remember vividly how we used to sit up on the roof to get a whiff of relief from the evening heat, talking about what to do better and how. When I was nine years old in 1948, we changed the game of the shoe business in Hapur, the town where we lived and our business was located. Even though we had no sophisticated understanding of branding -- in fact we never used the word brand -- we named a line of shoes "Mahaveer" (after my cousin) and targeted it at the "rich people" largely associated with the local grain trading exchange, the second largest in India. We persuaded manufacturers to produce a special line of shoes for this target audience and became number one in town in less than two years. The profits from this innovation funded my formal education in India.

from the book The Game Changer by A.G. Lafley and Ram Charan Published by Crown Business; April 2008