Innovation success is never a straight line. What eventually separates successful companies from struggling ones is the ability to adapt to change.
Being in the innovation field for over 15 years has allowed me to see hundreds, if not thousands, of ideas. Some are from big companies. Some are from hungry entrepreneurs. Still others are from our team at Innosight. They are all the same. Every innovative idea, and I mean every one, is partially right and partially wrong. The trick is identifying which part is which.
The way most companies try to confront this challenge is to find truth through analysis. Talk to experts. Run customer surveys. Construct an elaborate financial model. Hold a complex series of internal alignment meetings. And then proceed forward with what appears to be a perfect plan.
Those that follow this process learn a life lesson taught by the great American philosopher, actor, and occasional boxer Mr Mike Tyson, who once said, “Everybody has a plan, until they get punched in the face.” The punch the would-be innovator receives is that the plan which had looked so good on paper, was really resting on shaky assumptions.
So, what’s a would-be innovator to do? Fly a kite, of course.
From the beginnings of civilisation, legions of would-be innovators were obsessed with a perplexing problem: Birds could fly, but humans couldn’t. People built prototype after prototype that at best never got off the ground and at worst led to serious if not fatal injuries. The Wright Brothers finally cracked the problem by following a distinctly different approach. Before they built a plane, they flew kites and gliders. The great thing about flying a kite is that when (not if) it crashes, no one gets hurt, and it is easy to try again.
To optimise their kites, they hacked a cardboard box, bicycle spoke wire, and a fan into a wind tunnel. Imagine how it felt in 1901, when everyone else was obsessed with crazy contraptions that had little hope of working and the Wright Brothers ran 200 experiments in over two months. As Mr Wilbur Wright later reflected: “Sometimes the non-glamorous lab work is absolutely crucial to the success of a project.”
Great innovators find creative ways to go beyond planning to learn through active experimentation. It isn’t just building prototypes (though prototypes are great), it is researching analogies, running thought experiments (Mr Albert Einstein’s insights about relativity were famously influenced by him imaging himself running alongside a beam of light), and using models and simulations to learn in resource-efficient ways.
This kind of experimentation often doesn’t come naturally to established organisations. After all, sustained success comes from disciplined execution of known processes, not from introducing variance to learn the unexpected. Leaders seeking to enable experimentation in their organisations should consider four approaches.
1. Simplify experiments. A few years ago, the software company Adobe started a programme called “Kickbox”. Participants receive a small red box. When they crack it open, they see checklists, templates, and tools that simplify prototype development. Most critically, the box also contains a pre-paid debit card with US$1,000 on it that can be spent without asking for anyone’s approval. To date, 1,000 people have received a Kickbox. That’s US$1 million in investment, but it is also 1,000 kites that otherwise would never have been flown. Many of those kites crashed, of course, but others informed new product development efforts or highlighted acquisition opportunities.
2. Bring discipline to experimentation. One mistake organisations make when they start embracing innovation is to assume success is all about the speed and scale of experimentation. Yes, speed and scale matter, but the ultimate goal is effective and efficient learning. A slow, careful test beats a quick, poorly created one. For example, Netflix approaches experimentation with almost a maniacal discipline. Every experiment has a clear hypothesis and an objective for the test. Managers make predictions before they run experiments, and execution is done in a way where predictions can be validated, with a control group and an experimental group (known as “A/B testing”). Then, most critically, Netflix acts based on what it learns.
3. Build skills experientially. Over the past few years, DBS, under the leadership of chief executive officer (CEO) Mr Piyush Gupta, has sought to shift from a compliance culture to a digital one that embraces experimentation. Part of the shift involved replacing traditional in-class leadership training with experiential training modelled on the hackathons that have become popular in Silicon Valley. The idea of a hackathon is straightforward. Bring a group of people together. Give them either a specific problem or a broad challenge. Give them as much Red Bull as they want. And lock the doors for 48 hours. When the hackathon is over, the group staggers out exhausted but amazed by the progress they have made in a short period of time. DBS had its top 200 leaders in batches of 30 go through a similar experience. The goal of each batch was to develop a functioning app. During the 48 hours they would meet customers, develop an initial idea, create a functioning prototype, get feedback from customers, and iterate. This kind of approach showcases how much progress can be made in a short period of time, reinforces the value of getting early and frequent feedback from customers, and builds leadership intuition about the power of active learning.
4. Celebrate behaviours. Tata Sons is India’s largest conglomerate, with business units ranging from tea to information technology (IT) consulting to automobiles. Collective revenues across its sprawling collection of businesses cross US$100 billion. Every two years, it holds an awards ceremony to fete its innovation accomplishments. One of the most coveted awards is called “Dare to Try”. As the name connotes, the award goes to a team that tried something that did not work. More than 300 teams applied for the award in 2015. Any time you innovate, two good things can happen. You can of course create value, but you can also learn something that opens up future avenues to create value, or learn that something won’t work before you have spent too much time or money on it. Organisations often worry about their ability to provide upside to successful innovators. The real problem isn’t the lack of upside, it is the perception of punishment when things don’t succeed commercially. Celebrating innovation behaviours helps to change mindsets and encourage experimentation.
It is increasingly clear that what will separate successful companies from struggling ones is the ability to adapt to change. Innovation success is never a straight line. There are mistakes, false steps, fumbles, and failures. Leaders can strengthen their firms’ innovation muscles by simplifying the process, testing with discipline, building intuition about the value of trial-and-error learning, and celebrating innovative behaviours even if results sometimes disappoint.
Copyright © 2017 Singapore Institute of Management