Innovation is Not an Event

Monday, May 17, 2010 | 9:54 a.m.

The seminar ad promised that if I attended the two-day session I would “learn how to be innovative and increase innovation in my company.” This ad typifies what is wrong with the idea of innovation in the U.S. lately. We have become a nation of instant gratification. We think that if we attend an event, we will instantly be transformed into an innovator, when in fact, innovation is a process, a mindset, and a cultural norm for the most innovative companies.

Don’t believe me, look at the top three companies listed by Bloomburg BusinessWeek magazine in its annual “The 50 Most Innovative Companies.” Apple, Google, and Microsoft hold the top three spots in this year’s list. All three have the “I” factor, great process, an innovative culture, and a progressive mindset. But these companies did not instantly become innovative. All three have worked very hard to become and stay innovative and they invest in innovation.

Apple’s 2008 research and development budget was $1.1 billion and it has increased each year since the company’s inception. Google promotes “Innovation Time Off” whereby employees are encouraged to spend 20% of their time working on projects that interest them. Fifty percent of all of Google’s products have resulted from this investment in time. Microsoft is promoting Microsoft Innovation Centers where it is partnering with local governments, academic institutions, industry, and other software and hardware developers to enhance local capacity for innovation through hands on engagement.

Today I want to focus on the intangible: the cultural mindset for innovation. Many companies are good. They excel at providing their services or goods to the market and delivering value to their customers. They have achieved brand consistency, good return on investment, and a loyal customer base. But all of this does not make them innovative. Doing your job well, on-time, within budget, and delivering quality--while essential--is not necessarily being innovative. Being innovative requires at its core, an innovative mindset.

Innovation takes time, dedication, patience, and faith. Becoming an innovative company does not happen by chance. It is not enough to say, “we are innovative.” A company must be designed in such a way that innovation and creativity are encouraged and fostered. Look at the “big three” again. They invest their time and money to be innovative. In your organization, how many people’s sole function is to innovate? How is innovation encouraged within others? What percentage of time are employees required to be billable?

Innovation does not occur when employees are over-taxed with delivering the work or when utilization rate or percent billable is the metric for organizational success. In fact, this mindset stifles creativity. Some companies have departments dedicated to developing and testing new ideas but even then, opportunities are missed that could develop from doing the work. One needs to be in the world to see the opportunities the world provides.

It takes patience to be innovative. Very few people can develop creativity on demand. Creativity or innovation is best developed by consistent processes that allow room for re-analyzation. The cultural mindset needed for innovation must also be tolerant. This demonstrates faith that the organization can innovate.

Innovative companies do not get complacent. Complacency or becoming “fat and happy,” is one of the greatest threats to successful organizations. Many companies who were once innovative and cutting-edge have been killed by getting too comfortable with their success. They lose what made them successful to begin with. Watch for the warning signs. Words like “good enough,” or “we’ll do better next time” are sure signs of complacency. When “save as” is the norm, instead or creating letters or proposals from scratch which are tailored to the engagement is another sure sign that your company has lost its edge.

The ability to innovate around your core offer, to deliver new goods and services that respond to your clients’ changing needs, and a mindset that always is looking for a better way are what will keep your company from getting complacent. In turn, it will also keep your company relevant.

Innovation is not just one great idea. Having the first big idea is great and can lead to tremendous success, but it is not enough if you don’t nurture it and continually advance. Look at both Starbucks and e-Bay, both of which fell off the Top 50 list this year. While both had breakthrough ideas, what have they done lately? I’m not convinced that instant coffee is going to be the next innovation for which Starbucks is hoping. While both Starbucks and e-Bay have remained relevant, new competitors have been lining up to syphon off their customers. Both of these companies will need to innovate to maintain their customer base and keep the companies fresh into the future.

It’s not enough to have a great idea. It is critical to innovate around that great idea to remain on top of one’s market.

Until next time…

Craig