Over the last week I spent time at Dana Point, in California, where I was attending Spigit’s annual Innovation Summit. It was an excellent event, and whilst I was there, I came across these things I thought were interesting enough post… and comment on.
Some 130 years after Edison’s remarkable creation of the electricity system, there still remains no doubt about the fundamental and truly epochal nature of his contributions: the world without electricity has become unimaginable. I bet that 130 years from now our successors will not be able to say the same about Apple’s sleek electronic devices assembled from somebody else’s components and providing services that are not fundamentally different from those offered by competitors.
The examples in this article are good, but the conclusion, in my view, is wrong.
Jobs was today’s Edison. Not because of the innovations (as Apple’s creations are rarely breathtakingly innovative, nor are they groundbreaking).
What they are, however, is an example of how integration across categories can do wondrous things. No different, really, from the Edison example of a fully integrated system: generation, distribution, and finally the lights themselves.
Apple is not a company that builds innovative products. It is, rather, a company that is innovative in the way it makes platforms.
However, far too much of our time as innovators is spent in the incremental alley. We’re captivated by improving existing products and services, rather than focused on balancing incremental innovation with other forms of innovation.
This from Jeffrey Phillips at Innovate on Purpose. His argument is a balanced one, but misses the most critical point of all: unless you’re making money as an innovator, you’re going to get cancelled.
Unfortunately, for almost every organisation I’ve ever been involved with, making money is a short term goal. Unfortuantely for almost every breakthrough innovation programme I’ve ever seen, getting money is a long term goal.
In other words, there’s little choice except doing short term money making innovation (incrementalism), and wishing it were otherwise, whilst moaning about the opportunities that innovators as a profession are missing doesn’t change the reality one bit.
Financial institutions and educators have propagated a way of thinking that is poison for innovation, Christensen said. And that thinking is around internal rate of return or IRR. As a result, investors are looking to put money to work fast and take it out as quickly as possible. This behavior is not only prevalent inside companies but also inside the venture business, he said. Christensen said that typically it takes about seven years or so to get a company to the finish line and get a good return on investment. Now compare that with an incremental product (or improvement) that you can flip quickly – that gives a big boost to the IRR.
This goes to the point I made a moment ago. Short termism may be bad for innovators, and it may be bad for companies, but facts are facts. You do have to make a number if you want to stay in business.
I agree there is a need for some systemic change. I agree that if it were possible to actually unleash creativity on business problems where there was no need for short term returns, it is likely that the world would be a much more exciting, and certainly better place.
That is a dreamland for innovators, however. A discipline which is just learning the ropes is hardly in a position to demand – and get – changes to the way everything is done all at once.
Those kinds of changes will come in time, I am sure. After we have proven Innovation is a discipline that can stand the test of time, just as marketing, accounting and all those other ones had to do.
Now, this is an article with a lot of valuable points. But I think it misses the most critical one: the move to a startup means you aren’t protected, anymore, when you make mistakes.
A mistake in a large organisation usually has predictable and controllable consequences, at least, any kind of mistake which hasn’t resulted from exceptionally poor judgement.
But because a startup is smaller, it has much less scope for recovery from missteps. So, when you put a foot wrong, the consequences are much greater, relatively speaking.
My observation is lots of people in corporate jobs simply aren’t ready to put their wallets where their mouths are. So they don’t take the risk at all.
They should. Life is more exciting when there are consequences.
5. If he is risk averse, sell risk avoidance
Greater than 50% of people – at least if you take the traditionally accepted normal curve of innovation preferences (innovators – laggard) will be more risk averse than average.
It follows, therefore that half the time, the best innovation sales strategy is talking about the dangers of staying with the old rather than discussing the benefits of the new.
It might make you sound like a dangerous naysayer yourself, but if it gets things done, it is a small sacrifice, surely?