5 Myths of Innovation

Prof. Birkinshaw has a must read article for all innovation managers in the MIT Sloan Management Review: The 5 Myths of Innovation.  Here are my learnings from it:

1. Innovation is NOT about the Eureka moment.  Innovation is 5% inspiration and 95% perspiration.  Companies are good at generating ideas, but it is in the detailed development and getting the innovation ready for market is where most failures are identified (the valley of death). The research shows that many companies are good at generating ideas (or at least ideas that sound good), but the performance drops through successive steps of development.
   

   Most innovation efforts fail not because of a lack of bright ideas, but because of a lack of careful and thoughtful follow-up. Smart companies know where the weakest links in their entire innovation value chain are, and they invest time in correcting those weaknesses rather than further reinforcing their strengths.

   The eureka moment is the driving force behind ideation workshops. I have myself conducted several and have been amazed at the lack of results. Many ideas sound good on the surface but digging into them is expensive. Also, it is very hard to find budget to explore ideas beyond the ideation workshop.

2. Innovation does not come from social interaction: There has been many suggestions of using social networks (here and here) and online forums to gather innovation ideas and nurture innovation (Tata’s learn to innovate).  However, the success of tehse forums is not guaranteed. As we have seen in the past, active engagement from the managers/executives is key to success of any online forum.  Here are some more thoughts:
   

   So what should you do to avoid these problems? The most important point is to understand the types of interaction that occur in online forums, so that you use them in the right way. If you are looking for creative, never-heard-before ideas, and if you want people to take responsibility for building on one another’s ideas, then a face-to-face workshop is your best bet. But if you are looking for a specific answer to a question, or if you want to generate a wide variety of views about some existing ideas, then an online forum can be highly efficient. (See “Questions That Work — and Don’t — in Online Innovation Forums” for examples.)

3. Open Innovation is not critical: Borderless or open innovation where companies access innovation from the outside has been much revered as the next big wave (See hotbeds of innovation, quirky innovation, etc).  However, nurturing innovation from the outside is an order of magnitude more complex than internal ideas.  R&D teams are often weary of outsiders. Organizations often have a problem with not-invented-here.  Finally, outsiders often speak a different language from internal teams, which makes it difficult to internalize their innovation.  Add to it complexity of IP licensing and costs of evaluating thousands of ideas that you might receive from the outside, and it becomes unmanageable.  The key is to access innovation from the outside when the problem can be very narrowly and precisely defined and there is not much overlap between external/internal teams.
   

   External innovation forums have access to a broad range of expertise that makes them effective for solving narrow technological problems; internal innovation forums have less breadth but more understanding of context. Smart companies use their external and internal experts for very different types of problems.

4. Financial Incentives are not the best way to drive to innovation:  As we have discussed many times (the problem with financial incentives, impact of incentive bonus plans, etc), financial / monetary incentive are probably not the best approach to driving innovation.  Prof. Birkinshaw has the following to say:
   

   Rewarding people for their innovation efforts misses the point. The process of innovating — of taking the initiative to come up with new solutions — is its own reward. Smart companies emphasize the social and personal drivers of discretionary effort, rather than the material drivers.

5. Top-down innovation is as important as bottom up: There is a misconception that all innovations start from disruptive technologies and key R&D.  However, even when the ideas come from R&D, they need to be actively funded and managed to succeed.  Also, it takes a lot of discipline and cultural change to get disruptive innovation to market. 
   

   Bottom-up innovation efforts benefit from high levels of employee engagement; top-down innovation efforts benefit from direct alignment with the company’s goals. Smart companies use both approaches, and are adept at helping bottom-up innovation projects get the sponsorship they need to survive.