As we all know, we're living in the great age of innovation. Of course, so did our parents. And their parents. Each generation seems to rediscover innovation — and repeat the same mistakes, says Rosabeth Moss Kanter, a professor at Harvard Business School. Too often, says Kanter, grand declarations about innovation are followed by botched execution (Hint: don't entrust innovation to an antisocial micromanager who demands results by the next quarter). Kanter, who described these pitfalls in a 2006 Harvard Business Review article, "Innovation: The Classic Traps," tells us how avoid them.
Why do companies keep repeating the same mistakes?
Managerial generations seem to turn over at a fairly rapid rate. There's very little historical memory in companies. Every new effort starts afresh and they just assume there's nothing to learn from the past.
Does every generation think it lives in the age of innovation?
At least since I've been active in these fields they've thought so — because it's been true! The pace of change has continued to speed up. Technology means there are more competitors in more parts of the world who learn about new ideas faster. It's harder to keep a monopoly on an idea or to operate in a protected market.
You say companies often focus on blockbusters like the next iPod or Viagra and overlook smaller, potentially more meaningful, successes. What's the psychology there?
If you can get a blockbuster, you can coast for a long time. If you can get a product that transforms the marketplace, like an iPod, you can keep taking that model and applying it in other places like the iPhone. There's a natural tendency to want to find those, except that they're rare. A potential blockbuster might be lurking in an idea that seems small at first. Companies that focus only on the blockbusters are going to miss a lot of the small ideas that might help fund the business and might later turn out to be things that truly are transforming.
Can you give us an example?
One of the companies that's been working hard on innovations of all kinds is Procter & Gamble. In Brazil, P&G was lagging in the market. They did some innovations they call "line extensions" of existing products like feminine hygiene, diapers, and laundry detergent. They were modifications of products with an awful lot of creativity that led to a bigger innovation — a way to address lower income consumers which are the biggest growing market in countries like Brazil and most of the high growth markets of the world. These innovations literally saved the business. This became a model for the company around the world as a way to reach lower income consumers who couldn't afford the premium price product.
Can you give us an example of a company that smothered its own attempts at innovation.
Gillette had such a blockbuster with its razor shaving systems that many people there forgot to enrich, renew, and innovate in the other areas. They sort of coasted. When companies start sliding downhill, the people go passive. When Jim Kilts came and led the turnaround, they not only innovated in the shaving systems but also got much more innovation from all of the other divisions. It was quite a dramatic change. People came forward with ideas they thought were too small or no one had listened to before. One way you shut down innovation is by pretending that nobody else but top management ever has a good idea.
Who else does it right?
The danger in naming companies doing it right today is, that's looking back, and they could just as easily stumble tomorrow. We clearly have to say Google is doing it right. Google built off its original technology and became very popular because of the ease of use, great name, great branding. And they continued to innovate. They figured out Google could be the place for advertising, and offer a range of services. They've got a culture where they believe they only hire the best people, and I think they probably do. People think everybody in the company is incredibly smart and listens to their ideas.
Is the image of the hermit inventor obsolete?
Individual innovators don't have to pretend they're the genius doing it all by themselves. In fact, that's one of the things that gets you in trouble. There was a time when many companies thought innovators were mavericks who should be in the basement so they didn't contaminate the rest of the company. That myth was shattered when we saw that innovation takes an awful lot of teamwork.
Timberland has an R&D unit for shoes called "Invention Factory." At the beginning, the Invention Factory had a real genius for shoe design, but they operated very much in isolation. They came up with a genius invention called "travel gear" that won an innovation idea award from a business magazine. Travel gear was an idea that came from observing how many shoes people were carrying in airports and how they wore all kinds of shoes to get on an airplane just so they had the right pairs with them. So the Timberland Invention Factory decided to make a modular shoe that you could change the heel or the outer covering and have a running shoe, a hiking shoe, a rain shoe, and a business shoe all in one. Cool idea.
Then it was finally handed over to the regular men's shoe division to figure out how to sell it. First of all, they were selling three pairs of shoes in one, so they had to charge three times the price or else they would eat into their existing business. The wholesalers thought it was really weird and didn't understand it at all or how to explain it to retail stores. Those people had no connection with developing this and the whole thing was killed. So that was the isolation model.
What's a better model?
Innovation can certainly be managed, but it can't be managed the same way as something that's already established. You don't manage innovation by expecting to have a full-blown plan at the beginning. You don't manage it by having deadlines that refer to your annual corporate planning calendar. You don't do it by expecting it to have a high financial return immediately. You don't do it by applying rules that fit big businesses and applying it to a small startup inside the company.
The best model looks something like what the tech world calls "rapid prototyping." I call it strategy as improvisational theater. You begin with a concept, the team goes to work, creates something, gets feedback from the audience or users, and modifies it. Your management system has to have tolerance for improvisation because you really don't know at the beginning exactly what this product or service will look like. It's like improv — you've got a theme, very highly skilled actors who are flexible and they take their cues from the audience.
To get ideas in the first place, it's helpful to have a great deal of contact with potential users and to be looking around the world to see what's missing and what the needs are. But when you're trying to form a new and fragile idea and don't have prototypes, it can be helpful for the team to focus. Leaders should give the team space. Don't make them report at a lot of meetings. Don't hold them to the same deadlines as the rest of the company. Give them a little freedom to develop the idea, but stay connected. As the idea is ready to emerge, the more collaboration with various units the better.
What sort of person should not be put in charge of innovation?
Somebody who knows one narrow field and that's all they know. The leaders of innovation don't have to be the smartest people in the world; they have to know a smart idea when they see it.