Innovating Innovation. David Morey
and Ford did not throw all of them out with the car. By 1962, such features as self-adjusting brakes and the self-lubricating chassis became technical synergies throughout the Ford line. Add to this the hard-learned lessons born of Edsel’s catastrophic quality control problems. These led the company not to tinker and tweak, but rather to reorganize all manufacturing under a single organization, thereby shifting the corporate culture to a focus on solving technical problems and human mistakes before they happen.
Of course, today, a cadre of collectors covets the car. Go shop for one of the fewer than 100 top-condition Edsels on the road at this writing. As of 2018, this icon of the failure of marketing and innovation, this Mt. Everest of lemons, which cost far too much at $2,500–$3,800 in 1958, can today be secured for your own garage from a trade collector for something over $100,000.
The lesson: Successful marketing and innovation demands three prerequisites: challenging assumptions, disrupting the status quo, and thinking anew.
Innovation Is Broken
Like the Edsel, innovation is broken today. It is in crisis. Innovation needs wide-angle, wholesale innovation. The problem is common these days. Attempts at innovation look backward. They react in an age when intelligent, proactive anticipation has never been a more critical advantage. To be sure, there is no shortage of books and articles and blogs on innovation. But you can safely ignore all that fail to focus ahead of where we are today. Innovation must foreshadow tomorrow.
So, we argue here for an anti-Edsel approach, relentlessly forward-focused and substantive. Not that looking ahead requires ignorance of the present or the past. What was once the future is now the present. That we live in this former future suggests that we live largely among products of successful innovation. Much as the Renaissance rejected aspects of its recent past (the Middle Ages), it recovered the innovation of its more distant past, that of Classical Europe.
Today, we can discover some proven ways to innovate and invent. These methods are inherently disruptive—that is, forward-focused. They are approaches that instinctively move out of the center of an organization, a society, a mindset, and go about innovation at what I call the “disruptive periphery.”
That is where we will be spending most of our time in the pages that follow. We will:
• Adopt a wide and global approach to innovation
• Deploy the power of an insurgent strategic overlay
• Leverage customer- and marketing-centric views of innovation
• Borrow the pragmatic lessons from the still-emerging world of Agile software development
We will not reject the value of experience—when that experience has succeeded in outlining a future—but we will not reflexively defend any experience for its own sake. Some three decades of battle-tested global consulting and training go into the stew of the real-world strategic principles you are about to savor. I have plated it in a simple bowl of “how-to.” Ingredients include:
• Proven change-leadership strategies counterpointed with insurgent organizational approaches
• Proactive marketing and communications strategies emphasizing customer-sourced perceptions
• Practical ways to “think different,” including ongoing and new inputs, voices, questions, perspectives, passions, and experiments
• Executional steps to bring innovation and change to the pragmatic and personal level where they will take root and grow, bearing new advantages for your business
Innovation Is Fixable
Matter is neither created nor destroyed. That a thing is broken implies that it can be fixed—can be fixed, taught, and accelerated. This requires innovating innovation with new thinking, approaches, and strategies, all of which can be taught, so that innovation can be produced on demand.
We do need to face the fact that the challenge of fixing, teaching, and accelerating innovation has never been more urgent. Today, 50 percent of startups will fail in their first year, 80 percent by their fifth, and 96 percent by their tenth anniversary.
Then, it gets worse.
With only 4 in 100 new businesses still standing, only 5 percent of those will achieve $1 million in revenue, four tenths of 1 percent will rise above $5 million, and an even smaller fraction, 6 out of 100,000, will exceed $10 million in annual revenue.
Given the odds, the need for more and better innovation is clear as day and bright as the sun. The management titan Peter Drucker has already told us what that better innovation will be: the “specific instrument of entrepreneurship” and “the act that endows resources with a new capacity to create wealth.” Innovation is always an instrument and an act. As innovation pioneer 3M defines it, innovation is a simple equation: “New ideas + action or implementation = which result in an improvement, a gain, or a profit.” I would change just one thing—the first instance of or to and. Innovation requires both action and implementation. In the first of these, innovation is an act. In the second, it is an instrument. There is an act and its strategic application, verb and noun, motion and tool.
The action and implementation of innovation is delivered in three ways:
By Leadership: Defining your own innovation vision, values, and priorities by managing creative disruption (or disruptive creation) and by personally exemplifying the power of “thinking different.”
By Company: Creating and executing on a platform, driving a unique and effective business model, fueling a change culture and organization, forming a uniquely powerful alliance, or inventing a new set of processes.
By Offering: Inventing new, relevant, and differentiated products, services, or technologies.
So, we have choices. But we must start fixing innovation right away. A recent Boston Consulting Group study finds 70 percent of CEOs interviewed put innovation among their top three leadership priorities. Great! Seven out of ten are already on board—except that the same survey reveals that a mere 16 percent believe their own company outperforms their peers in terms of innovation.
As World Economic Forum founder Klaus Schwab tells us, “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.”
Faced with change at an exponential pace, we must all—CEOs and non-CEOs, inventors and non-inventors—take charge of innovation. Consider, for instance:
• Airbnb: Founded in 2008, born on the idea of renting air mattresses on the floor of its founders’ San Francisco loft, it is today one of the world’s largest hotel and real estate companies…yet it owns no buildings.
• Uber: Founded in 2009, an idea birthed on its founder’s smartphone amidst his own frustration over not finding a taxi in the rain, it is today one of the world’s largest transportation companies…yet it owns no vehicles.
• Facebook: Founded in 2004, inside a now infamous Harvard dorm room, it is today the world’s largest media company, with nearly 25 percent of all internet users signing in to look for news, photos, music, or videos…yet it produces no content.
• Bitcoin: Founded in 2009, based on an academic paper by Satoshi Nakamito, it is the world’s first decentralized digital currency, with somewhere between 3 to 6 million unique customers…and, of course, it uses no central bank.
• Alibaba: Founded in 1999, it is today the world’s largest retailer, featuring a billion different products on just one of its many portals, and managing as much as 80 percent of China’s e-commerce market…but it has no inventory.
• Salesforce: Founded in 1999, it is at this writing among the world’s largest marketing and sales companies, with over $10 billion in annual revenues…yet it neither employs nor offers any salespeople.
One glance at this remarkable list, and it is impossible to doubt the existence of exponential change all around us. The average age of these examples as of