These days innovation is everything–and yet it’s nothing if it doesn’t succeed in the marketplace. Sure, innovation is about generating great ideas. But a great idea alone is not enough. It must have the legs to get over the obstacles that innovations inevitably confront.
The real trick is building something people are compelled to acquire, getting it into their hands in a form they can put to use, and generating the cash flow needed to grow. Getting innovation right means not just creating something new—it requires successful delivery of that new product or service.
Experience working on hundreds of projects in some 60 organizations has taught me that seven key activities will lead to successful innovation. Putting any one of these into practice will put you ahead of the competition. Bring them all to bear and you will systematically uncover potential, capitalize on opportunity, and generate traction that drives success in the marketplace.
1. Discover Inflection Points
A positive inflection point is a game changer that has the power to propel you forward. Expert innovators are able to sense the potential in inflection points before they take place, and then ride these dramatic shifts toward four strategic targets: growing your base, increasing the offerings your customers buy, generating loyalty, and moving you up-market.
2. Build Capacity
Systematic innovation relies on the ability to contain the three inherent stresses of a successful innovation environment. Strong innovation leaders recognize this and intentionally cultivate the people and the environment that provide a strong foundation. The three stresses are:
A. Pressures of everyday operations – just keeping the doors open brings its own special set of challenges that include everything from suppliers dropping the ball to irate customers to unplanned successes that require your attention.
B. Movement and stress that comes with new ideas, products and services – although necessary for sustainable growth and profit, innovation is by definition not business-as-usual. When it courses through your organization it demands attention and creates counter-forces that can wreak havoc if you are not ready for it.
C. Market forces: sometimes rapid, always unpredictable – every business owner knows the market can shift on a dime or a headline. Positive inflection points are sometimes generated in response to these changes in market conditions. For innovation to thrive, you must have the capacity to provide both the stability required to weather change as well as the flexibility to jump at sudden advantage.
3. Gather Business Intelligence
The best innovation rises from a sea of information about products, services, customers, competitors, market conditions and internal capabilities. Business intelligence is the data that supports your ability to make strategic decisions. It could be information about products, customers, competitors, the market or internal capabilities—or all of the above. Effective innovation requires intelligence to make smart choices that take into account each of these areas.
I have been conducting business intelligence for my executive clients since 2000. I find it surprising that so many have little or no intelligence efforts in-house, let alone the ability to exploit this resource. It’s a stark absence. They cannot act on their information because they have none or what they have is haphazard, built upon conversation and hunches only. It is a sad state considering that much of this valuable input is readily available for a negligible cost.
4. Shift Perspective
In order to see new opportunity you must be able to get out of your own box. Successful innovators question their own assumptions and try on alternative and helpful points of view.
Shifting perspective is essential if you are going to get innovation right. Your current assumptions are constraining your thinking, whether you’re aware of that fact or not. In this chapter I will show you how to challenge those assumptions by applying four techniques for shifting perspective that should put you in a new relationship to everything you thought you knew. From this new perspective, you’ll find it easier to get innovation right.
Your clients, competitors, strategic partners, and industry observers each have a sense of the value your organization provides. But is it the same value proposition you and your marketing team have worked so hard to create and articulate? Maybe not!
5. Exploit Disruption
Successful leaders learn to identify the opportunity embedded in adverse conditions. It can come from anywhere. If ignored or mismanaged, it throws business into disarray. But what if you could take the forces behind these intrusions and turn them to your advantage? That’s what the masters do. Instead of being waylaid by adverse conditions, they use them to get the upper hand. You can and you must become an expert in exploiting disruptions. Don’t fight change but use it to your advantage.
Market fluctuations are normal, including fast, painful declines and long, confusing morasses. Rapid fluctuations are particularly disruptive. The market plunges, a sexy new competitor moves into your space, technology changes too fast to keep pace, customer expectations slam you. We’ve all been there. Welcome to life in the 21st Century. Learn how to put disruption on your side.
6. Generate Value
Value is what causes people to reach in their pockets and spend. Skillful innovators understand what drives value and how to generate it. Value is at the center of everything. With it, you can hobble along in other areas and still score a goal. Without it, you are doomed to eventual failure regardless of your other accomplishments.
Value has been at the basis of commerce since the beginning when we first went beyond producing goods for our own use and began to use them for trade. Value is what we want, what compels us to pay or barter. Value is what drives all the activity tallied daily in the world’s markets. Value is the holy grail of business – you must keep your eye on it 24/7.
7. Drive Uptake
Every stage of the innovation process holds opportunity to engage the community of people who will be most interested in your offerings. Innovation leaders intentionally drive this uptake, or market acceptance, for maximum effect. There is nothing more gratifying or necessary than seeing your offerings purchased and put to use. Uptake is customer acceptance of a new product or service. Without it innovation is an empty shell, a wasted effort. With it, new ideas come into their own as they are taken up and applied by the people who most desire them – your customers.
Innovation is the successful introduction of a market offering that profits everybody involved, both you and your customers. Innovation happens when a new product or service creates a return in the market that far exceeds the time and money it takes to develop and execute. When a new offering is accepted and embraced, generating the resources that make it possible to support and grow its place in the market – that is innovation.
Seth Kahan is a change specialist who has consulted with CEOs and senior managers at over 60 organizations including World Bank, Shell, Peace Corps, and 30+ associations. This is an excerpt from Seth Kahan’s forthcoming book, Getting Innovation Right: How Leaders Create Inflection Points that Drive Success in the Marketplace to be published by Jossey-Bass in early 2013.
[Image: Flickr user Arty Smokes]