Harsh Reality of Innovation

by Hutch Carpenter

Nothing like putting your heart and soul into innovation, and then getting this:


Man, tough audience. But very much in keeping with some the best advice on innovation. Which is, you can't have innovation without some failure along the way. It's inevitable.

That advice is both true, and glib. Innovation consultant Jeffrey Phillips catches the right spirit when he says:


"Another thing about 'failure' is that we try to kid ourselves that failure is a 'good thing' a learning opportunity. Well, not in most cultures.


This is the reality of innovation. It's tough. The more disruptive an innovation, the tougher it gets. And we're in the middle of seeing how it plays right now with Apple iPad and Google Buzz.

Let me ask you this: Do you personally think either the iPad or Buzz will be guaranteed successes for their respective companies? Be honest now.

My guess is you're like most of us: I don't know.

Well, truth be known, neither do Apple and Google. But they've got a history you'd bet on.


Apple and Google: Big Time Failures, Big Time Innovations

Both Apple and Google have had their share of duds in the market:


Obviously, these companies do not have a perfect record of successful innovations.

But they do have a record of pressing through failures and continuing to roll out innovations. In fact, they're consistently ranked the best in the world:


It pays to stick-to-it in trying out innovations. But can everyone?


Does Your Company Really Want Radical Innovation?

In Psychology Today, a professor at the University of Michigan gets to the issue:


From vaccines to Velcro, many inventions were spawned from accidents, seeming failures. But when Fiona Lee, psychology and business professor at the University of Michigan, explored which conditions help people experiment with novel ideas, she uncovered an interesting phenomenon: "Managers talk a lot about innovation and being on the cutting edge, but on an individual level, many people are not willing to try new things."


What's holding us back? A fear of failure.

Think about your own reaction to the question of whether the iPad and Google Buzz will be successful. It's easy enough to be uncertain as an observer. But imagine if you have to put shareholder capital in to it, affect your brand in the market and risk some career trajectories?

I will often read of the importance of taking risks and accepting some level of failure for companies to be innovative. This is very true. But it can be glib to summarily dismiss companies for not 'getting it'. When they're made up of people like you and me who possess ordinary... well, human characteristics.

Because how do you know when you're iterating toward a true high-value innovation, or you're just spinning your wheels? I'll turn again to Jeffrey Phillips:


"As Edison and countless others have demonstrated, you rarely get it right the first time, and if you are stymied by early failure, then you'll never find and implement the best ideas. Innovation, as has been pointed out by individuals with far more to say about it than me, will create some failures. Your job isn't to avoid the failures, since you can't predict them in advance, but to reduce the cost and impact of the inevitable failures. In other words, keep moving."


As I said before, I can't know for sure whether the Apple iPad or Google Buzz will be successful. But kudos to those companies for rolling out innovations that might fail. And in case you're wondering whether allowing employees some latitude to fail is worth it, check out the 5-year stock performance of Apple and Google versus the S&P 500:



Let's take this one out with the great speech from Teddy Roosevelt:

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."

Indeed.


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Hutch Carpenter is the Vice President of Product at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.

Radical Innovation is a Proposal, Not a Product

by Thomson Dawson

We've noticed a common thread among many companies these days. When thinking about innovation - most seem to be heavily focused on providing incremental features and benefits as a cornerstone for their competitive advantage. What seems to elude many executive leaders is a lack of understanding that people do not buy products, they buy into meanings.

Maybe the reason for this is simply the physics of most organizations inhibits radical innovation and the competitive advantage that results. What matters the most to people is not the function of a product, but their emotional, psychological and cultural connection to what a product means to them. The key to sustained competitive advantage for companies is to innovate around meanings rather than function and performance. Radical Innovation does not happen when you bring people an incremental improvement of what they already know. Rather, radical innovation (and market leadership for that matter) is the result of 'proposing' an unexpected meaning. This meaning, unsolicited by user needs, once discovered, turns out to be the very thing people were waiting for!

There are countless examples of companies who have mastered this. Of course, Apple is an easy one. And there are other compelling examples. Back in the early 80's, Seiko and Casio were driving technological innovation in quartz watches, believing people wanted technical precision. However, a Swiss watchmaker realized people cared more about self-expression than technical precision. Swatch was born and proved to be a radical innovation of meaning that created radical market success. While Seiko and Casio were closely observing user needs and existing meanings, Swatch created new ones.


Forget User-centered Innovation

With so many such examples in every industry to benchmark from, I am surprised most companies don't seem to "get it". Most are heavily invested in traditional market innovation - finding a consumer need and filling it. From our own experience working in early stage product and brand innovation, seemingly the conversation starts by the client explaining how their new product innovation has more buttons and is easier to use than the leading brand. A radical innovation of meaning rarely, if ever, comes from user-centered approaches.

In my view, this explains why so many high user involvement product categories are being commoditized. Most companies continue to improve incremental performance within existing market concepts leaving only a few visionary companies to gain competitive advantage (market leadership) by proposing new and different meanings. Did I mention Apple yet?


Good and Different

In his whiteboard book "Zag", noted consultant and author Marty Neumeier outlines the fundamentals of good and different. The premise is simple - you can't lead by following the leader. To remove uncertainty and hedge risk in innovation, many companies rely on focus group testing. While useful for certain kinds of learning, people in focus groups have a frame of reference that is based on what is currently known to them. Most people usually want more of what they currently know - only with more features and cheaper. This is not an effective venue for discovering new meanings or competitive advantage.

Today the marketplace is over-crowded with good. Good is expected. Good = the same! Different on the other hand, is more elusive. When a company proposes a radical innovation of meaning, it's no surprise it will be first judged as crazy or impractical idea. Radical innovations of meaning don't test well. A product that is radically different is always radically different than the current dominant meaning in the category. Think back to the Swatch example; personal expression trumps precision instrument. Indeed Swatch is still good and different.

What is your innovation strategy?

In his book, "Design-Driven Innovation", author Roberto Verganti outlines a framework for mapping strategy for innovation as a radical change in meanings. Check out his thinking in the diagram below:



Verganti describes the process of product innovation and competitive advantage as historically being the result of product performance enhanced by disruptive technology advances and intense analysis of users' needs. Radical innovation, on the other hand, is more about baking the more elusive unexpected meaning into the product. People discover something unexpected that, when delivered, is somehow what people have been waiting for, just not asking for. Radical innovation is a proposal to people. Radical innovation is not about function and form, but about function and meaning - never driven by users.

As your company maps its innovation strategy, this distinction of radical innovation of meanings rather than features may be noteworthy in your product development. If you're not thinking about radical innovation right now, you can be sure your competitor is. Lead, follow, or get out of the way has never rang so true.

Please share your thoughts with us.


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Thomson Dawson is the Managing Partner of PULL Brand Innovation. PULL helps leaders and teams gain more insight, clarity and confidence to pursue their most promising opportunities to create new value.

Dear Cable TV Executives,

by Steve McKee

I don't want 300 channels. I only want 18 channels. OK, the average person wants 18 channels. I really only want six. Why can't I have just six?

I know, I know, it's the economics of the industry. But industries change, don't they? I mean, look what has happened to the music industry. I used to have to purchase an entire CD just to get the one or two songs I want, but now I can buy and build my own playlists song by song. It's funny, but I'm sure I spend more on music now than I used to.

You should know I just bought an Apple TV box. That's not your fault - since the Blockbuster Video stores near me closed (and RedBox, while cool, doesn't exactly offer a huge selection) I didn't really have a good option for renting movies. So I thought it was worth a try. Now I can select from a huge selection of movies and TV shows, and when I'm not in a buying mood I can use it to watch YouTube on my HDTV. I'm beginning to think of YouTube as the ultimate TV network - there's so much on-demand entertainment there. (Hmm. You might want to make a note of that.)

Speaking of entertainment, I've held off on getting a Kindle because I knew Apple was coming out with a similar device. I'm excited to get my iPad, not only to check my email and surf the web but to download books. I guess Apple is shaking up the book publishing industry just like it did the music industry. "Saving it" is probably a more accurate description; I'm sure my book purchasing behavior will mirror my new music buying habits. I wonder if they're thinking along the same lines when it comes to TV. I guess time will tell.

So if you don't mind, I'd like to subscribe to individual cable channels. For that matter, I wouldn't mind subscribing to individual programs. I know you won't get as hefty of a monthly fee from me, but I'd be willing to pay more per network than you're getting now. And I suspect other people would be too.

Anyway, it's something to think about. But no pressure. If you don't do it, I'm sure I can find other things to do with my time and money.


Editors Note: I'm with you Steve. I've got limited cable because I don't have much time to watch television. When I really want to watch something specific I can get it online. Cable TV is going to face much the same problem that fixed line phone service faces now (declining subscriber #'s). And, if more and more networks develop their own 'apps' for a variety of mobile or IP platforms (Apple TV, iPhone, Blackberry, iPad FloTV, etc.), it's only going to accelerate.


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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Battlefield Innovation Lessons for Business Leaders

by Paul Sloane

Let's be clear, business is not war. But if you are operating in a fierce marketplace then it can feel like it. Many of the methods we use in our sales campaigns, marketing strategies and competitive tactics are based on military analogies. So what lessons can business leaders today learn from the history of warfare? Here are some that seem particularly relevant.

David vs. Goliath - 1000 BC?

Goliath was a giant and the Philistine's champion at man-to-man combat. David was a young shepherd boy. Goliath expected to overwhelm his opponent in a sword fight but David chose to fight on different terms. He defeated Goliath by using an unusual weapon, the sling, with pinpoint accuracy.

Lessons: It is no use going up against someone who has an 8-ft spear with a 4-ft spear. You need a different weapon. If you are smaller you have to be agile and different. If your competitor is the giant in the market, you need a radical approach so that you can strike rapidly and accurately. This is what Direct Line did when they used telephone technology to sell car insurance directly while the major players were using brokers.

Battle of Crecy - 1346

The English army of about 14,000 men under Edward III had ravaged northern France. They were finally confronted on August 26, 1346 by an army of some 40,000 Frenchmen under Philip VI. Battles were normally fought by knights on horseback and the French, with such a numerical advantage, felt confident. But the English had a new and superior technology, the longbow. Their archers were trained in rapid fire and could sustain a rate of over 10 arrows per minute. Each arrow could penetrate armor. It was the first time that such a mass volley of arrows had been used in warfare. The French attacked in waves and they were cut down relentlessly by the power, speed and range of their opponents' archers.

Lessons: One of the best ways to beat an established competitor is with a new technology. Innovation can overcome a strong opponent. Focus your firepower on the target. Amazon used internet technology to directly address the needs of book buyers and to run rings around the established high street vendors.

Battle of Trafalgar - 1805

Traditionally, naval battles were fought by lining up two fleets in parallel line so that they could deploy the maximum firepower from their canons. At the battle of Trafalgar, Villeneuve, the French admiral, formed his fleet of 33 ships into a line. But Nelson did not line up in parallel. He split his 27 ships into two squadrons and attacked at right angles to the French line. In the hectic battle that ensued Nelson died but the British were victorious and established a naval supremacy that lasted over 100 years.

Lessons: If you do not have a superior force or superior technology then try a different tactic. Surprise your opponent with a fresh approach. Virgin, Benetton and Body Shop are examples of businesses that used surprise tactics to disrupt incumbent market leaders.

First World War - 1914 to 1918

The scale of the slaughter of soldiers in World War I was appalling. Over 8 million military personnel died. The main tactic on the western front was to repeatedly attack strong defensive positions with waves of men. They were massacred. It was believed that with sufficient artillery bombardment and pure weight of numbers a breakthrough could be achieved. But the way to overcome barbed wire defenses and machine gun posts is not with lines of infantrymen. What was needed was the rapid development and effective deployment of the tank.

Lessons: Effort, courage and hard work are not enough. If you are competing with a well-entrenched opponent who has a strong defensive position then you need a new technology or approach to achieve a breakthrough. A long war of attrition debilitates both sides. Retail banking was a stodgy business until Egg, First Direct and Cahoot came along to shake it up and take millions of accounts away from the big players.

Maginot line - 1940

The British and French high commands assumed that the new war with Germany would be similar to the First World War, with huge static armies facing each other. The French built a massive defensive line along the entire border between France the Germany, the Maginot line, consisting of enormous fortifications. But when the Germans attacked in May 1940 they did some lateral thinking. They used fast-moving armored divisions and paratroops. They swept through Holland and Belgium and around the Maginot line. The British and French were outmaneuvered and France fell in five weeks.

Lessons: Assuming that new contests will be similar to previous ones is dangerous. The best way to combat an opponent who has a strong defensive position and barriers to entry in a market is to go around those barriers and find a new way to the market. This is what Direct line, Amazon, Netscape and Easyjet did.

Battle of Britain - 1940

After the fall of France, the British retreated across the Channel, leaving most of their equipment behind. The German army, having raced across Europe was rampant while the British army was demoralized and under-equipped. The Germans planned an aerial assault followed by an invasion, and many thought that Britain would fall as quickly as France, Holland or Poland. But the British had some things that the others had not - the channel, the Spitfire, radar and Winston Churchill. Churchill gave the people a vision, purpose and belief that enabled them to sustain the blitz, oppose the might of Germany and eventually triumph.

Lessons: In tough environments, winning CEOs are those who have a clear vision, can communicate it to their people and motivate them to achieve the goal. Sir Arnold Weinstock, Bill Gates and Jack Welch are recognized as this type of visionary leader.

Defeat of Hitler - 1945

After his great successes in the early part of the war, Hitler was convinced that he was a military genius and the German Wehrmacht could overcome any obstacle. When he attacked Russia in the summer of 1941, he was so confident of victory that there were no plans for a winter campaign; no winter coats for the soldiers and no winter oil for the tanks. He ignored the advice of his generals and pushed his forces down towards Stalingrad and then refused to allow them to withdraw or regroup when the communication lines became overextended. His arrogance and overconfidence built a barrier to criticism and meant that he never used the full talents of his team. Eventually Germany was overwhelmed by the weight of Russian, American and British forces.

Lessons: A narcissist CEO will lead the business to disaster. Plan a fallback scenario. Strong vision and belief are essential but a leader who blocks constructive criticism, ignores the input of his team and fails to build consensus is doomed. To mention them by name would be libelous but take your pick from the CEOs who have led mighty companies to disaster in recent times.

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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

Rules of the HP Garage

[The garage where Hewlett and Packard started HP, 1939 photo]

by Paul Williams

Founders Bill Hewlett and David Packard had the right idea when they first built their company. They believed if you had passion for what you did - and did it with quality - the money will follow.

This was a pretty radial idea back in the 1940s, 50s and 60s. Their approach to business became known as the "HP Way." And later the title of the book David Packard wrote about building HP. (The HP Way).

They started their business in a one-car garage in Palo Alto, California. (That garage has been dubbed the birthplace of Silicon Valley).

In 1999, HP CEO Carly Fiorina, summarized the spirit of that HP Way with her Rules of the Garage:

• Believe you can change the world.
  
• Work quickly, keep the tools unlocked, work whenever.
  
• Know when to work alone and when to work together.
  
• Share tools, ideas. Trust your colleagues.
  
• No politics. No bureaucracy. (These are ridiculous in a garage).
  
• The customer defines a job well done.
  
• Radical ideas are not bad ideas.
  
• Invent different ways of working.
  
• Make a contribution every day. If it doesn't contribute, it doesn't leave the garage.
  
• Believe that together we can do anything.
  
• Invent.

While HP has had ups and downs in the past years, you can't take away from the original spirit, values, and soul of the garage.

Did you know their first substantial sale was to Walt Disney. They sold him eight audio oscillators.

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Paul Williams is a professional problem solver at Idea Sandbox. He can help you create remarkable ideas to grow your business. You may read more at his website and find him Twittering as @IdeaSandbox.

Challenge Your Assumptions

by Paul Sloane

Every time that we approach a problem, in any walk of life, we bring to bear assumptions that limit our ability to conceive fresh solutions. Brilliant thinkers are always aware of assumptions and are always happy to confront them.

There is a story told about a northern pike, a large carnivorous freshwater fish. A pike was put into an aquarium, which had a glass partition dividing it. In the other half from the pike there were many small fish. The pike tried repeatedly to eat the fish but each time hit the glass partition. The partition was eventually removed but the pike did not attack the little fish. It had learned that trying to eat the little fish was futile and painful so it stopped trying. We often suffer from this "Pike Syndrome" where an early experience conditions us into wrong assumptions about similar but different situations.

The way that we see things is often circumscribed by our assumptions. In the middle ages, the definition of astronomy was "the study of how the heavenly bodies move around the Earth." The implicit belief was that the Earth was at center of the universe. In 1510 a brilliant Polish astronomer, Nicolai Copernicus, postulated the idea that the sun was the center of the solar system and that all the planets revolved around the sun. He was able to explain the motions of the planets in a way that made sense but was totally at odds with convention.

The atom was originally defined as the smallest indivisible unit of matter. The assumption was that an atom could never be subdivided. This belief hampered the advancement of science until eventually J.J. Thomson discovered the existence of a sub-atomic particle, the electron, in 1887.

In business we make all sorts of assumptions. For example, you might hear people say:

• Competition sets the price level in our industry


• We must constantly raise our quality and service delivery


• Our largest customers are our most important customers


• We should hire people who fit in well with our team


• Each of these notions needs to be challenged.

Often it is up to a newcomer to an industry to break the existing orthodoxies. For example:

• Henry Ford challenged the assumption that automobiles were expensive, hand-built carriages for the wealthy.


• Anita Roddick challenged the assumption that cosmetics had to be in expensive bottles. Her retail chain, the Body Shop, sold products in plastic containers.


• IKEA challenged assumptions by allowing customers to collect their furniture from the warehouse.


• The low-cost airlines like Southwest and Easyjet challenged the assumptions that you needed to issue tickets, allocate seats and sell through travel agents.


• Apple challenged the assumption that a personal computer was functional and not aesthetic.

Brilliant thinkers know that assumptions are there to be challenged and they relish defying them. How can you do this? Here are some tips:

• Start by recognizing that you and everyone else have ingrained assumptions about every situation.


• Ask plenty of basic questions in order to discover and challenge those assumptions.


• Write a list of all the ground rules and assumptions that apply in your environment and then go through the list and ask, "What would happen if we deliberately broke this rule?" and "What if we did the opposite of the norm?"


• Pretend you are a complete outsider and ask questions like, "Why do we do it this way at all?"


• Reduce a situation to its simplest components in order to take it out of your environment.


• Restate a problem in completely different terms.

Ken Olsen was CEO of DEC, a company that was a great innovator in the days of the mini-computer (during the pre-PC era). He said:

"The best assumption to have is that any commonly held belief is wrong."

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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

Are you in denial?

by Rowan Gibson

Sometime over the next decade (if it hasn't happened already), your company will be challenged to change in a way for which it has no historical precedent.

Look around the world today and we see entire industries whose business models have gone belly up. The pharmaceutical industry has a fundamentally broken business model. The global grocery business has an imperiled business model. The traditional airline industry is struggling with an out-of-date business model. The insurance industry, the travel agent industry, the music industry and the movie industry have anachronistic business models. This is a situation that most companies have never faced before.

Whilst some firms may have become adept at reinventing their products and services over the years, very few organizations have any experience in completely reinventing who they are, who they are serving, how they are serving and what their industry is. They simply have no history of that kind of fundamental innovation. That's why - almost in a heartbeat - a lot of companies come unstuck. When the need for deep, fundamental change arises, most industry incumbents are simply not ready for it.

For example, was Detroit ready for the Japanese back in the 80s? Was Xerox ready for Canon? Was Coke ready for Red Bull or Starbucks? Was the BBC ready for CNN? Was Kodak ready for the digital camera - and the camera-phone? Was Microsoft ready for Linux, or Google? Was Barnes & Noble ready for Amazon? Were the world's telecom companies ready for Skype?

The burning question you therefore need to be asking yourself right now is, Will our company be ready? Will we be able to make a radical shift from where we are to where we could or should be? Have we developed a slew of promising new strategic options from which we can choose? Are we already experimenting with alternative sources of profit on which to build our company's future? Do we have the kind of people in our top management and throughout our organization who are open to these new possibilities?

In other words, are we already committing enough of our energies to deep innovation and strategic renewal? Or are we going to sit there in denial for a decade and go through some "Valley of the shadow of death" experience before we wake up and say, "Okay, maybe we have to change here?"

Don't wait till your industry has been turned on its head, your business model has been undermined, and powerful competitors - either aggressive newcomers or innovative incumbents - are already eating your lunch. Instead, you need to be thinking seriously, right now, about developing a deep capability for radical innovation and ongoing strategic renewal. It's the only way to guarantee any hope of surviving - and winning - in the new Innovation Economy.

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Rowan Gibson is widely recognized as one of the world's leading experts on enterprise innovation. He is co-author of the bestseller "Innovation to the Core" and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

Creative Destruction and Newspapers

by Steve McKee

I love reading the newspaper. I like the feel of the broadsheet in my hand, the anticipation of turning each page to see what's next, and the sense I get of being plugged into the world through the rhythm of daily reading. I am a newspaper loyalist, and I'm an endangered species.

That, of course, is not news. Newspapers are shrinking and their circulation shriveling, like a mirror reflecting the Internet's growth and expansion. Politicians and pundits (including many newspaper editors and publishers) who aren't schooled in business don't recognize the absolute and inescapable law of creative destruction. They wring their hands as if what's happening is a tragic thing. I see it simply as the way of the world.

To a news consumer, the Internet offers many advantages over ink and paper, from timeliness to portability, affordability to dialogue. And for a generation of readers spawned in the wake of the Web, getting their news online is not only better than in print, it's more natural. Even old guys like me who love the sound of the thump on the driveway in the morning increasingly turn to our Macs and Blackberrys to keep up with breaking events.

But while the Internet is rapidly replacing ink, paper and newsstands, the Web is to news as an aluminum can is to Coke - a terrific way to deliver the product but not the source of its value. Newspapers are struggling because newspapers are confused - they forgot they were in the business of building an audience and focused instead on selling the audience (to the advertisers who increasingly bore their cost of operating). That was fine as long as they had a monopoly on distribution, but it led them to spend their limited resources on adding more ink colors rather than more color to their ink. Now that advertisers have (ultimately) infinitely more choices, newspapers are stuck.

But the answer isn't so difficult. The key to the future of the newspaper industry lies in its past. There will always be a market for news, and newspapers still have core competencies in gathering, reporting and interpreting what's important to their readers. If they do their job well, they'll continue to be able to provide the exclusive content for which readers will pay, regardless of whether or not it results in ink-stained fingers.

The more the newspaper industry focuses on 'news' rather than 'paper', the better off it (and we) will be. That will enable it to embrace evolving distribution opportunities and find new sources of revenue and competitive advantage. Just like every other industry must do.

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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Radical or Gradual Innovation?

"Radical Innovation" refers to high risk, high uncertainty projects which hold the potential to both influence the marketplace and bring high returns to firms. It's a kind of "promised land" of differentiation, growth and wealth for businesses and nations. Radical innovation is different from gradual innovation, in which small, incremental changes are made to activities in order to create more value with less waste. The focus of this article is how firms can realize radical, or breakthrough, innovation, which is the more difficult type to foster.

A 2007 McKinsey Global Survey revealed that 70 percent of corporate leaders call innovation one of their top three priorities. They believe that breakthrough (or radical) innovation will have the greatest affect on corporate performance. The report shows that these leaders agree - "innovation is the best strategic decision for sustainable competitive advantage." Yet these same leaders report that strategies for igniting innovation in their companies elude them. Too many barriers exist. Why?

One reason is that radical innovation, while prodigious in its rewards, is also prodigal in it's demands on resources. Translated: breakthroughs can payoff big, but the process is costly, and the risks huge. While investment and risk cannot be avoided in the rigorous pursuit of innovation, an understanding of what is known about successful innovation strategies can help organizations:

1. Trust in the wisdom of the pursuit


2. Move forward with greater confidence that the steps they are implementing are the right ones to truly foster breakthrough innovation

Another barrier to successful radical innovation initiatives is that the real driver of innovation is culture, and culture is the most difficult layer of the business pyramid to change (Flameholtz & Randle, 2007). When the words "culture" and "innovation" appear together in an article or research study, the discussion will most likely focus on national cultures, emphasizing the belief that nations demonstrating values of individualism, high risk tolerance and power distance are more predisposed to innovation than collectivist cultures that value hierarchy, social harmony and low risk tolerance. New research, however, indicates that corporate culture, not national culture, has the greatest impact on radical innovations.

In January of 2009, Tellis, Prabhu & Chandy released the results of their research into radical innovation across nations. They collected a wide range of data on 759 firms from a cross section of 17 major economies of the world. Their findings are startling. First, in every nation, radical innovation varies a great deal across firms. So, the idea that national culture is the innovation driver appears dubious. What, then, accounts for the difference between firms that innovate radically and those that do not?

No matter what the country, national culture or climate, firms that produce the greatest breakthrough innovations share three attitudes. These attitudes, the study finds, are "the willingness to cannibalize assets, future orientation, and tolerance for risk." How can corporate leaders use this research to drive innovation in their own firms? They must approach it from the highest level of their pyramid: the corporate culture.

How can firm leadership begin to address the cultural changes necessary to spur breakthrough innovation? They can begin by measuring their own firm's cultural practices using the diagnostic tool developed by Tellis, et. al. This is a great way for firms to benchmark their cultural practices against others of the same size or industry. Then, they can begin to manage and maintain an innovation-producing culture.

Next, leaders can shift their focus away from the number of patents they produce (numbers of patents to do not positively correlate to innovativeness, oddly enough) and toward cultural attitudes that drive radical innovation. Are they willing to cannibalize current revenue producing successes or do they slavishly protect them? A successful stream of profits from existing products and services generally leads to protective measures, in which the firm attempts to hold onto that revenue, rather than sacrificing profits for future discoveries. Do they rest on their past successes (or worse, romanticize them), or do they stay ever watchful of what the future may hold, what might make current profit streams obsolete, and focus on how to meet new challenges down the road? Finally, can they embrace risk? Radical innovation cannot flourish in a fearful atmosphere where risk avoidance is rewarded. "Dare to fail" is the mantra of the innovator.

Some other keys to innovation success include:

1. Make innovation a core part of your leadership agenda. Start every day with a discussion of innovation and corporate culture.


2. Managers must model behavior that encourages innovation.


3. Top innovators must not be penalized for failures; this will only discourage the risk-taking needed for the next big discovery.


4. Leadership teams must make the time to focus on new topics (future orientation).


5. In larger firms, collaboration between marketing and R & D departments can be essential to successful innovation.


6. Mentor both high performers in the firm to become future innovators, and mentor those who may not share in innovation pursuits but who could become innovation "antichampions" if not taught to value innovation, and tolerate the risk inherent in its development.


7. Accept failures an inevitable.


8. Try to balance your leadership team with people who are abstract thinkers as well as pragmatists. This mix can help move innovations forward with measurable goals.

Finally, team member selection is of utmost importance. Radical innovation teams need folks who are comfortable working on problems for which paths to solutions are unknown. Such people possess high levels of what's called "associative fluency." Associative fluency refers to a person's ability to make connections across a wide range of domains. It allows them to imagine many solutions to problems, and these people are less like to get stuck "narrowing," or finding solutions only within their domain of expertise. They are multi-dimensional people. So, instead of looking for domain experts for your radical innovation team, look for a mix of people with broad experiences and the ability to see problems from many angles.

Many firms want to create structured, repeatable processes for radical innovation. Instead, the research shows that building cultures and infrastructures that support innovation yield greater returns. In "The Human Side of Radical Innovation" (O'Connor & McDermott, 2004), the authors define radical innovation maturity as "the degree to which the organization has systematically implemented processes for initiating, supporting, and rewarding radical innovation activities." This is a cultural shift, and it's not easy. But it may be the key to the kingdom of the future.

References:
Flameholtz, E.G., Randle, Y. (2007). Growing Pains. John Wiley & Sons, Inc., San Francisco, CA.
McKinsy Quarterly (2007). How companies approach innovation: A McKinsey global survey. http://www.mckinseyquarterly.com.article_print.aspx?L2&L3+O&ar=2069
O'Connor, G. C., McDermott, C.M. (2004). The human side of radical innovation. Journal of Engineering and Technology Management. 21, 11-30.
Tellis, G.J., Prabhu, J.C., Chandy, R.K. (2009). Radical innovation across nations: The preeminence of corporate culture. Journal of Marketing, 73, 3-23.

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Julia Fischer Baumgartner is a founder and principal of art-cm, a consulting firm specializing in helping entrepreneurial stage start-ups move up to the professionally-managed level.