Table of Contents
Praise
Title Page
Copyright Page
Dedication
Foreword
Acknowledgments
Introduction
About the Companion Web Site
PART I - SETTING THE STAGE
CHAPTER 1 - Blinded by the Light
OVERVIEW
Innovation Vision Example (Alcatel-Lucent)
Innovation Vision Example (Kuwait Petroleum Corporation)
There Is No Single Innovation Vision
Innovation Vision Case Study—Ford Motor Company
Innovation Vision Case Study—Hewlett-Packard
Innovation Vision Case Study—Apple Computer
Innovation Vision Case Study—Nintendo
Innovation Vision Case Study—Walmart versus Amazon
Innovation Vision Case Study—Intel versus AMD, Qualcomm, and NVIDIA
Bringing It All Together
CHAPTER 2 - Peering in the Dark
OVERVIEW
Strategy Must Be Based in Reality
Two Sources of Innovation, One Innovation Strategy
Time as a Component of Innovation Strategy
Innovation Strategy Case Study—The Whirlpool Example
Innovation Case Study—Open Innovation at Procter & Gamble
Not Just for Corporations
Innovation Maturity
Incremental versus Disruptive Innovation
Innovation Portfolios
Open Innovation
Bringing It All Together
CHAPTER 3 - Setting a Course Blindfolded
OVERVIEW
The Purpose of Innovation Goals
The Influence of Customer Permissions and Visual Frameworks on Your Innovation ...
Setting Your Innovation Goals
Bringing It All Together
PART II - THE INNOVATION ENGINE
CHAPTER 4 - What Are They Really Thinking?
OVERVIEW
Four Lenses of Innovation
Broadcasting the Voice of the Customer
Trend Spotting, Behaviors, and Needs
Insights and Execution
Insights Case Study—Apple iPhone
Insights Case Study—Apple iPad
Are You Innovating for the Past or the Future?
Bringing It All Together
CHAPTER 5 - Shining a Light on the Customer Problem
OVERVIEW
Generating Ideas
Idea Quantity
Idea Quality
Better Brainstorming
The Idea Generation S-Curve
The Nine Innovation Roles
Bringing It All Together
CHAPTER 6 - Picking a Winner Without Looking
OVERVIEW
You Get What You Measure
Separate But Equal
Idea Evaluation Checklist
Idea Challenges
Parallel Idea Evaluation in a Serial World
Saying No in the Right Way
The Importance of “Not Now”
Bringing It All Together
CHAPTER 7 - Going to Market Blind
OVERVIEW
Useful or Valuable
Slow Innovation
Slow Innovation Case Study—The iPod
Slow Innovation Case Study—The VCR
Slow Innovation Case Study—The Internet
Slow Innovation Case Study—Southwest Airlines
Slow Innovation—Conclusion
Idea Commercialization Stories—Apple Designs a “No!”
Lessons Learned
Bringing It All Together
PART III - THE ORGANIZATION
CHAPTER 8 - Have You Had an Innovation Lobotomy?
OVERVIEW
What Are You Afraid Of?
The Impact of Culture
Organizational Hierarchy of Needs
Breaking Out of the Mold
Choose Your Own Hours—A Case Study in Flexibility
Bringing It All Together
CHAPTER 9 - Do Your Policies and Processes Keep People in the Dark?
OVERVIEW
Some Secrets of Continuous Innovation Are Nothing New
Should They Call Them Silos or Bunkers?
Get Your Hands Off My Bonus
A Case Study in Breaking Down Information and Structural Barriers—Cisco
Another Case Study—GE and Reverse Innovation
Bringing It All Together
CHAPTER 10 - Keeping the Lights On
OVERVIEW
Who Innovates?
Innovating in a Crisis
Innovation Is Not a Project
If You Want Systemic Innovation, You Need Systems to Manage It
Innovation versus Flexibility
Managing Innovation Is About Managing Change—A Case Study
Purpose and Passion
Blogging Innovation as a Case Study in Passion
Passion versus Obsession
Innovation Is Social
Bringing It All Together
Epilogue
APPENDIX A - Customer Exploration
APPENDIX B - Visual Frameworks for Guiding Your Innovation Efforts
APPENDIX C - The Innovation Baker’s Dozen
Bibliography
About the Author
Index
Additional Praise for
Stoking Your Innovation Bonfire
“Braden Kelley has delivered a book that helps people move innovation from theory into practice. Given our experience innovating with clients over the past 40 years, I believe Stoking Your Innovation Bonfire shares many useful strategies and case studies showcasing what works. Most importantly, the book helps managers identify and address the barriers to innovation within their organization—a crucial step toward making sustainable change.”
—Mark Bernstein, CEO of PARC (www.parc.com)
“Braden Kelley has been able to abstract the realities of innovation in his book. This is not theory or science fiction; it is about valuable lessons from real-life examples that those in charge of innovation should be aware of if they want to design winning strategies.”
—Moises Norena, Director of Global Innovation,
Whirlpool Corporation
“Braden Kelley helps to demystify innovation, helping readers to understand how to deliver strong and sustainable yield from their innovation efforts.
Stoking Your Innovation Bonfire is a great primer for any organization focused on advancing its approach to innovation.”
—Joe Boggio, Director of Innovation,
U.S. Commercial Sector
“Without knowing it, organizations drift toward bad habits and blind spots that shut off innovation.
Stoking Your Innovation Bonfire unpacks the blockages standing in the way of growth so leaders understand how to move the organization forward.”
—Drew Boyd, Executive Director, Master of Science in
Marketing Program, and Assistant Professor of Marketing
and Innovation, University of Cincinnati
Innovation is never easy—and not always welcome. This book is dedicated to the men and women who dedicate their lives to pushing our organizations to make more efficient use of our human capital and natural resources and to make the world a better place.
Foreword
Innovation is not what it used to be. In fact, if you were to pick up a book on innovation from the 1970s and compare it with the book you are now holding in your hands, you would probably find the difference quite remarkable.
Back then, there were basically two areas of focus in the field of innovation. One was on boosting a company’s research and development (R&D) capability, which was essentially all about developing new technologies and products. You would have been hard-pressed to find any book at that time that dealt in a serious way with how to innovate around operational processes, services, cost structures, customer experiences, business models, management practices, or industry architectures. The dominant paradigm of that era—at leading companies like IBM, Xerox, or Procter & Gamble—was that innovation was something you did almost exclusively in a scientific research center. And those research centers were usually kept quite separate from the company’s core business. They were funded to explore fringe ideas that may have had little or nothing to do with the real work of the company, or nascent technologies that would require a very lengthy time frame before they could ever be commercialized.
The other area of innovation focus in the 1970s was personal creativity—how to “harness your imagination” and “unleash your creative potential” to come up with breakthrough ideas. In many ways, the popular paperbacks of the day helped perpetuate the myth that innovators are always lone inventors and entrepreneurial visionaries who somehow “dare to dream.” On the more scientific side, Dr. Edward de Bono’s books on lateral thinking showed us how to use specific techniques to break patterns and solve problems in non-traditional ways. But none of these books really dealt with the issue of how to connect individual innovators or innovation teams with a company’s political infrastructure, which is why so many ideas never got the necessary funding, talent, and management support they would have needed for success.
Braden Kelley’s book is an outstanding example of how far innovation has come since then. Rather than looking at the field from a myopic, R&D-focused point of view, Braden offers us a wide-angle lens that allows us to see the entire of spectrum of innovation opportunities available to today’s companies. Instead of segregating the responsibility for innovation to a specific department or isolated unit of the organization, this book presents innovation as something that should be systemically built into every nook and cranny of the company—something that should involve every single employee, in every location, every single day (as well as many constituencies beyond the company’s borders). And in place of the old bias toward improving personal creativity and lateral thinking skills, Braden’s book outlines exactly what has to happen at the organizational level to make innovation happen in a profitable and sustainable fashion. In many ways, this book is like a snapshot of the state of the art of innovation in 2010.
Perhaps the greatest advance in the field to date has been in our understanding of the organizational impediments to innovation. As my co-author and I pointed out in Innovation to the Core, building a truly innovative company is not a matter of simply encouraging people to be more innovative; it’s a matter of positively changing the things that usually diminish or stunt an organization’s innovation potential.
The fact is, the forces that frustrate and inhibit innovation are deep and systemic—they are embedded in the management principles and processes that today’s organizations inherited from the industrial era. The real challenge, therefore, to making innovation a corporate-wide capability is surfacing these fundamental inhibitors to innovation—the things that are hindering new thinking and innovation, the things that are frustrating experimentation, the things that are stopping talent and capital from flowing to the best ideas—and then working hard to uproot and remove them. Indeed, the challenge is to replace a company’s old managerial DNA with new, innovation-friendly practices and policies that enable and sustain new kinds of behaviors.
This book explains exactly how to do that. It clearly identifies the typical blockages to innovation that can be found in a company’s vision, strategy, goals, insights, ideation efforts, idea evaluation process, commercialization pipeline, and organization structure, and—most importantly—it explains how you and your colleagues can overcome them. It will help you understand exactly what to change in your own company in order to make innovation sustainable as a new corporate way of life.
On a personal note, I have been proud to contribute to Braden Kelley’s “Blogging Innovation” web site for some years. I have watched the site and its enthusiastic fan base grow into quite a significant movement, and I never fail to be inspired by the articles and comments that are posted there each day from across the innovation community. In many ways, this book is a distillation of all that knowledge, giving you a window on the very latest thinking in this exciting field. Braden started something big with “Blogging Innovation” (it was recently ranked number one in terms of popularity among innovation web sites). Who knows? Perhaps he has started something even bigger with this book. If I were a newly appointed innovation director at a major company, I would certainly not want to ignore the valuable lessons presented on the pages ahead.
ROWAN GIBSON
September 2010
Acknowledgments
I want to thank first and foremost my wife, Kathy, for giving me the confidence and support to pursue this project, and my daughter, Gabriella, for understanding that Daddy needed to disappear for a few days to make his deadline.
I first started trying to write this book back in 2006, but the idea didn’t really start to pick up steam until I had the good fortune to begin interacting with authors like Michael Raynor and Gary Hamel. Some of these innovation conversations helped to further my exploration of unanswered questions about what it takes to create innovative organizations. Working with great clients like those at Tigo Africa and dialogues with innovation leaders from other organizations including Procter & Gamble, American Express, Whirlpool, and Cisco have also helped to stimulate my thinking and strengthen the contents of this book. I want to acknowledge all of these leaders—especially Percy Grundy and Regis Romero of Tigo Africa. May your innovation journeys be successful and smooth!
Having a successful blog has allowed me to attend a number of innovation conferences around the country and to meet a lot of really great people from around the world. As a result, I’ve been able to create a rich conversation on the topic of innovation thanks to contributions from more than two dozen authors.
To some of these Blogging Innovation contributors I owe a huge debt of gratitude. Stephen Shapiro, Matthew E. May, Rick Merrifield, and Robert F. Brands have all helped to give me the confidence to undertake this project, increased my ability to navigate the book publishing industry, and helped make introductions to the people that are bringing this book to you.
I’d also like to thank my agent, John Willig, and my editor, Susan McDermott, for having faith in me and my concept. And I’d be remiss if I failed to thank my development editor, Judy Howarth, and all the other people who worked behind the scenes at John Wiley & Sons to help make this book a reality.
Finally, I’d like to thank the readers of Blogging Innovation. If you had read less I might have written less, tweeted less, and there might not have been a book. So, please keep reading and who knows what might happen next.
Introduction
It’s no secret that executives are under escalating pressure to deliver increasing profits every quarter. In such a pressure-cooker environment, the only way that companies can hope to meet the lofty expectations of the market is to hard-wire their organizations to be mindful of costs while simultaneously pursuing innovation.
Innovation has become the focus not only for businesses but also for governments and whole economies, too, as countries seek to secure high-paying jobs for their citizens and their tax base. This book will help managers identify and begin removing the barriers to innovation that are preventing their organization from creating sustainable growth and change.
Every successful organization began as a nimble, innovative start-up with the ability to course-correct and quickly adapt to the needs of its customers. But along the way, success and growth cause changes in the structure, the culture, and sometimes even the vision of organizations (see Figure I.1). Successful, growing organizations often focus on driving out the operational inefficiencies they maintained during their start-up phase, and unintentionally erect barriers to innovation as they become ever more efficient and profitable.
Unfortunately, when organizations realize that they need to innovate again, they find that they struggle to do so. Successful organizations are typically built around one or more key customer insights that allow them to solve their customers’ problems better than their competition. Often when organizations find themselves being unexpectedly disrupted by new entrants or losing share to existing competitors, they make the mistake of copying the artifacts they observe in the marketplace or that they read about in case studies. Too often, organizations then seek to boost their innovation by undertaking one-off brainstorming or ideation sessions to come up with their next technology, product, or service innovation. Instead, organizations need to look internally to uncover the innovation barriers that are challenging their organization, knock them down, and rebuild existing organizational capabilities that will enable them to create more than me-too incremental innovations that cannot be sustained.
Figure I.1 A Typical Company’s S-Curve
The problem for most organizations is that innovation is about change, and organizations and individuals tend to resist change. If you look around the business ecosystem, you’ll see that the companies that successfully innovate in a repeatable fashion and stay at the top of their industries have two things in common:
1. They are good at managing change.
2. They were flexible and adaptive enough to survive at least one innovation crisis.
Managers who read and absorb this book will be able to make immediate changes in their organization to recapture its original innovative spirit. This will help them leverage the collective wisdom and passion of all their employees to continuously innovate for customers in a sustainable way.
And how important is innovation, not just to organizations, but to the economies of whole countries?
According to “The Innovation Index,” a November 2009 report from NESTA, innovation was responsible for two-thirds of the United Kingdom’s private-sector labor productivity growth between 2000 and 2007. NESTA is the United Kingdom’s National Endowment for Science, Technology and the Arts.
A significant part of the identified productivity increase came not from traditional research and development (R&D) but from other types of investments in innovation, such as design, the development of innovative skills, organizational innovation, and brand equity. 1,500 firms were surveyed across nine sectors in this research, which will be expanded more in the future. Here is an interesting quote from the study’s findings.
The UK is a relatively good place to innovate, but has some important shortcomings. On the basis of available internationally comparable data, the UK appears to be a mid-table performer when it comes to the wider conditions for innovation compared to other leading economies (including the US, France, Germany, Japan, South Korea, and Finland). Although there is scope to develop these data further, they suggest that the UK performed less well on three important indicators: access to finance, demand for innovation (in particular the use of government procurement to encourage innovation), and skills for innovation.
The fact that the United Kingdom and other countries are examining their innovation performance and capabilities as a country points to the importance of innovation not just to firms, but to the economic health of cities, states, countries, and whole regions. I would argue that we all need to take a stake in helping our public and private organizations raise their level of innovation capabilities in order to reduce the waste of human capital and natural resources.
This is the whole reason that I devote so much time and energy to Blogging Innovation (http://blogginginnovation.com) and its social mission to make innovation and marketing insights accessible for the greater good. We all stand to benefit if we can improve the ability of our organizations to create products and services that truly solve customer problems and if our markets become more efficient at reallocating those resources.
In this book we will not paint visions of utopia that assume a completely new organization. Instead we will help readers identify the innovation barriers specific to their organization and provide case studies and guidance that will help each organization rebuild its hidden or lost innovation capabilities (see Figure I.2). Where appropriate, we will leverage and evolve other leading innovation theories into coherent, practical applications that readers can implement in reinvigorating their organizations themselves—without expensive consultants.
This book is organized into three main parts. In Part I, we will look at how the innovation vision, the innovation strategy, and the innovation goals combine to set the stage for successful innovation. In Part II we will take a look under the hood at the innovation engine—where insights, idea generation, idea evaluation, and idea commercialization work together to drive the growth of the business. And finally, in Part III we take a closer look at barriers to innovation in the organization and the potential for an organization’s innovation efforts to be derailed by organization psychology, structural and information blockages, or sustainability deficiencies. And don’t forget to check out the appendixes in the back for some special visual frameworks and other tools for helping you craft your innovation strategy and goals, and for helping the organization understand how the innovation engine should work.
Figure I.2 Where Do Your Barriers to Innovation Lie?
I hope you enjoy this book and find it a valuable resource to keep in your innovation toolbox!
About the Companion Web Site
I couldn’t possibly fit all of the information that I wanted to include in this book between the two covers—no matter how hard I tried. Nor could I stop coming up with great ideas for how to make the book even better. So, I decided to stop writing and instead add all of this great stuff to an interactive web site that you can access online and even contribute to www.innovationbonfire.com.
Here you will find:
• The 50 Question Innovation Audit that I use with clients.
• Fill it out and get instant feedback.
• An Innovation Healthcheck for each of the 10 chapters.
• These will be designed to help you pinpoint which of the 10 barriers you are facing.
• Video interviews with authors and business leaders about innovation topics.
• Text interviews with authors and business leaders about innovation topics.
• A place to sign up for our monthly Innovation Insights newsletter.
• All of your different options to follow along.
• Anything else I can come up with or someone else might contribute that adds value.
System requirements for the non-geek:
• Any computer that will run a modern Web browser (Firefox, Opera, Internet Explorer, Chrome, or Safari) should suffice.
• We won’t make the web site too fancy, so it should work on most people’s machines.
• Videos will be embedded YouTube or Vimeo videos most likely—I hope that will work for you.
PART I
SETTING THE STAGE
CHAPTER 1
Blinded by the Light
VISION BLOCKAGES
The Key Dangers
• Nobody understands why innovation is important.
• Nobody is really sure what innovation really is.
• It is unclear what kind of innovation we are pursuing.
• People don’t see why they should participate.
• People don’t feel that innovation has anything to do with them.
OVERVIEW
A start-up begins life as a single-minded entity focused on innovating for one set of customers with a single product or service. Often as a company grows to create a range of products and/or services, the organization can start to lose track of what it is trying to achieve, which customers it is trying to serve, and the kind of solutions that are most relevant and desired by them.
Jack Welch, former CEO of General Electric, once said, “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.”
Vision is about focus and vision is about the “where” and the “why,” not the “what” or the “how.” A vision gives the business a sense of purpose and acts as a rudder when the way forward appears uncertain. An innovation vision is no less important, and it serves the same basic functions. An innovation vision can help to answer some of the following questions for employees:
• Is innovation important or not?
• Are we focusing on innovation or not?
• What kind of innovation are we pursuing as an organization?
• Is innovation a function of some part of the business?
• Or, is innovation something that we are trying to place at the center of the business?
• Are we pursuing open or closed innovation, or both?
• Why should employees, suppliers, partners, and customers be excited to participate?
When people have questions, they tend not to move forward. For that reason it is crucial that an organization’s leadership has a clear innovation vision and clearly and regularly communicates it to key stakeholders. If employees, suppliers, partners, and customers aren’t sure what the innovation vision of the organization is, how can they imagine a better way forward?
You have to make sure that stakeholders know not only that innovation is important to the organization, but also what innovation means in their organization and how they can participate. Otherwise, how can stakeholders be expected to make any significant contributions to the innovation success of the organization?
For companies seeking to move innovation to the center and become an innovation-led organization, senior leaders must first clearly communicate this vision, this intention, and then lay out a plan for how they envision making an innovation-led organization a reality. An effort to move innovation to the center is best led by the CEO, but it requires the support and involvement of the senior leadership team to tell the stories to employees and customers about what the organization is trying to achieve, what innovation means to their organization, and how the employees and other stakeholders can participate (see Figure 1.1).
Figure 1.1 Venn Diagram
Innovation Vision Example (Alcatel-Lucent)
Some companies even go so far as to publish their Innovation Visions on their public web sites. For example, here is Alcatel-Lucent’s Innovation Vision:
Innovation is at the heart of Alcatel-Lucent.
Within Alcatel-Lucent, innovation is achieved through the efforts of scientists, researchers and engineers who work together to mesh what is possible from science and technology with what is required by the markets.
Alcatel-Lucent is the most powerful innovation engine in the industry, leveraging its unrivalled depth, breadth and global footprint to deliver the best communications products, services and solutions.
At the core of this innovation engine is Alcatel-Lucent’s Bell Labs, a world-renowned and distinguished research organization whose role is to:
• Conduct fundamental and applied research in domains where the impact on communications will create significant competitive differentiation and often yield game-changing innovations;
• Anticipate, explore, and de-risk technology evolutions;
• Generate and deliver innovative product ideas, components and architectures;
• Support business and marketing by advancing the company’s thought-leadership in the global technical and science community;
• The Alcatel-Lucent research community also incubates “start-up-like” projects targeting the commercialization of truly disruptive technologies and products.
We invite you to explore this Web site to learn more about our innovation engine and how it is transforming the nature of communications and networking. (From International Fund for Agricultural Development [IFAD] web site).
Translated into English, Alcatel-Lucent’s Innovation Vision is to create technology innovation in the area of communications products. Their Innovation Strategy for achieving this vision is to use Bell Labs to do fundamental and applied research along with technology commercialization. If I should be an employee in this organization outside of Bell Labs (or a supplier or customer) and I read this web site, I would probably get the message that innovation is not for me—that it’s not my job.
Innovation Vision Example (Kuwait Petroleum Corporation)
Here is the Innovation Vision for the Kuwait Petroleum Corporation (KPC):
Develop . . . comprehensive long-term plans and programs for the investment in research and development. Strengthen the coordination with local research institutes and organizations on studies, research, and information related to the oil industry.
Translated into English, KPC’s Innovation Vision is to focus on technology innovation through internal and external research. Their Innovation Strategy includes five phases dedicated to:
• Phase 1: Research and Development Infrastructure.
• Phase 2: Technology Process Design.
• Phase 3: Value Optimization in the Oil Sector.
• Phase 4: Learning and Knowledge Sharing.
• Phase 5: Information Technology (IT) Infrastructure.
If I’m an employee in this organization outside of R&D and I see this, I probably get the message that innovation is not for me—that it’s not my job. But if I am a local industry expert or researcher outside the organization, then I may reach out to them.