Why is Innovation so Often “Hit or Miss?”

By: Greg McLaughlin

This question has baffled many executives for quite some time. Management tries to replicate the special event or circumstances that created a successful innovation project but often fails. Companies have created positions such as Chief Innovation officer, innovation teams, and organizational strategies that promote innovation through diversity, team dynamics, and social networking. However, failure rates of 90% are common when innovations occur due purely to chance. What distinguishes whether an innovation is hit or miss?

We all recognize an innovation such as Apple’s iPad without understanding how that innovation came about. Is the iPad a new technology or just new to the marketplace? Is it an improvement of the Tablet PC or just the next extension of the iPhone? The fact is the iPad is innovative without being totally new or novel.

So, what is the key to successful innovation? Is it more allocated funds, more opportunities for good ideas to permeate the organization or is it better leadership and management practices? Although all these strategies are helpful, there is clearly no one answer to this baffling question.

Consider the following example: While consulting with a large chemical firm, and as a part of a Design for Six Sigma improvement project, the team searched for viable application to their existing product. Their product had a single use – a film product placed between two thin layers of glass that becomes automotive safety glass when joined together. Manufactured for many years, the product was extensively tested and performed well.

Since the project objective required a new product, the team was baffled. Rather than inventing something unique or new, a new use for the existing product was proposed. Redefining innovation permitted the team to discover a new use for an existing product (safety window glass – presently used in tens of thousands of homes and businesses).

Redefining innovation permitted the team to discover a new use for an existing product.

Difficulty arose when the team posed the idea as an innovation and management understood it as an untested and unproven product application. Management nearly killed the project because it perceived that the idea was not innovative, yet it radically changed their business model refreshing the product life cycle. Can a new use for an existing product be an innovation? In this case, the answer was a resounding YES!

How to define and understand “innovation”?

The innovation involved an improvement that addressed unfulfilled needs. The result: changing how the definition is perceived. From our research at Project Impact, we are finding that individuals define and understand innovation in three unique dimensions. Our first test group was a population of Latino Americans all employed within the IT Industry. Seven hundred and eighty-one (781) usable surveys were statistically analyzed. Ten statements, based on the research of Zhuang (1995; 1999), measured perceptions of innovation. Factor analysis identified three unique (independent) factors (or dimensions) each relating to how individuals understand innovation.

• The first component (or dimension), is a very traditional element of innovation – a new product or service; an invention. That is, something new – it has not previously existed.

• The second component is innovation that comes from improvement in product (service), or process.

• The third component is innovation through change. Change refers to replacing what has existed with something different.

Further data collection by Project Impact yielded survey results from Australia, South America, and Hong Kong. What is fascinating is that for each cultural group studied, our research validates these three dimensions of innovation. What varies is how well the respondent understands and supports these three dimensions. From the cultural groups studied to date, there is one best statement that defines innovation – it is making something (a product/service/technology, process or person) perform better. Consistently, the dimensions of “improve” and “change” score higher than those that describe the dimension of “new,” suggesting a broader understanding of innovation. Defining innovation as synonomous with something, novel, or new (an invention) is incomplete.

Defining innovation as synonymous with something novel or new (an invention) is incomplete.

In addition, three distinctive demographic characteristics identified differences in how individuals perceive innovation. Gender, job function, and generational cohort constituted the three demographic variables. A first pass analysis indicated no differences in gender but further detailed analysis indicated that differences exist between job functions (technical versus non-technical employees), gender, and generational cohorts. Obviously, these results will greatly affect marketing and sales strategies. Trying to market an improvement to a group that values invention (something new) would be pointless. It would be better to market the product, technology, or service as “new” and explain its new features and uses.

How does innovation exist in organizations?

What sustains innovation in an organization is clarifying its meaning and disseminating this knowledge within the organization. Examining innovation through this new lens helps to define its intent and purpose. Leadership needs to remove innovation from its special event status to one that integrates the concept into the organizational mainstream. The best method to explain how innovation exists in organizations is with taxonomy. That is, innovation exists within an organization in two tiers:

Tier 1

• Loosely defined (Innovation that loosely tagged or non-existent)
• Special Event (Innovation due to a specific need or by random occurrence)
• Departmentalized (i.e., R&D, assigned to a particular department)

Characteristics of tier 1: Innovation seen as an event; discussed and promoted but has no strategic role; Inconsistent understanding of innovation; Responsibility at department level; Confused with design and development issues; Associated only with products or technology.

Tier 2

• Functional (functions like accounting, finance, and marketing)
• Strategic (Chief Innovation Officer – plans and projects)
• Integrated (full integration into the organizational culture and value system)

Characteristics of tier 2: Is strategic, that is, it is planned and funded; Operates throughout the organization beginning at the individual level; Is fully integrated with functions similar to HR, finance, etc (corporate-wide responsibility); Is real-time with measured and managed metrics.

Those organizations in Tier 2 understand the importance of innovation by integrating it into their organization. Tier 1 organizations (which tend to be the majority) still celebrate innovation as a special event and compartmentalize it to a department or group such as Research and Development. In a world where innovation is a key for success, Tier 1 organizations risk much.

The impact of diversity in the workforce

Finally, diversity in the workforce is certainly a change that can lead to innovation. Think of innovation as a portrait that individuals view and interpret. Each person views innovation and interprets its meaning with a unique perspective.  The complexity in understanding innovation at the individual level is that different people assign a different importance and significance to these unique dimensions.

There is, in fact, a diversity of perception in defining innovation. This diversity of perception is one of the compelling reasons why innovation is so often “hit or miss.” Therefore, defining innovation and aligning individuals to a desired outcome based on their understanding of innovation is critical for success.

In conclusion, for innovation to be successful beyond a “hit or miss” rate, leaders must accept the diversity of perception regarding innovation, harness the positive aspects of selecting individuals with a common frame of reference, and find the tools that align these individuals to achieve a successful outcome. Otherwise, chaos will persist and innovations will continue to be more of a discrete event than a planned and managed function.

By Dr. Gregory McLaughlin

References

 

Baregheh, A., Rowley, J. and Sambrook, S. (2009), “Towards a multidisciplinary definition of Innovation”, Management Decision, 47(8), 1323-1339.

Dahl, A., Lawrence, J., and Pierce, J. (2011), “Building an innovation community”, Research – Technology Management, September-October, pp. 19-27.

Zhuang, L. (1995), “Bridging the gap between technology and business strategy: A pilot study on the innovation process”, Management Decision, 33, 8, pp. 13-19.

Zhuang, L., Williamson, D. and Carter, M. (1999), “Innovate or liquidate – are all organizations convinced? A two-phased study into the innovation process”, Management Decision, 37, 1, pp. 57-71.