By: Deepak Syal
A lot of companies aspire to implement successful innovation programs but the programs fail surrounded by certain myths. A seasoned entrepreneur has bust those myths in the article based on his personal experience.
The other day I was browsing through a book store and a book caught my attention. It was titled “The Invincible Company”.
I think if I would have found this book 12 years back it would have saved many hours and mistakes that were otherwise learnt the hard way. My road was very hap-hazard, not very different from this:
The book is full of powerful insights for entrepreneurs and innovators, with visualizations used to explain concepts easily. I highly recommend it to the founders, CEOs and even the Chief Innovation Officers of new and growing companies as a quick read.
While reading, I came across some myths around innovation. I could relate with a lot of them as I had those assumptions while initiating the innovation program internally.
Let’s see how! (I have modified the myths to make them applicable in context to the innovation program.)
“The Wait For the Perfect Idea”
Myth #1: You would start generating ‘perfect’ ideas for your company as soon as you start your innovation program.
Busting Myth #1:
I feel that the innovation capture programs are about enabling people within the company to consistently share their ideas, even though they are a bit rough.
They may not be perfect. They may not be immediately applicable to the products. They may be in completely different directions. However, over the period of time, with constant guidance, they slowly start aligning with the demands of an underserved market. Therefore, I believe you have to nurture hundreds of small ideas to let your innovation program conceive the ‘perfect’ idea within your company.
We can relate this with how Reid Hoffman conceived LinkedIn from a not-so-popular predecessor called SocialNet. And SocialNet’s failure laid the foundation for the monumental success of LinkedIn.
- 1997: Reid Hoffman launched SocialNet – a social networking platform which covered “all contexts of human life”. However, due to the lack of a defined value proposition and Hoffman’s misunderstanding of the then nascent internet space, the idea failed.
- 2002: Hoffman, learning from his mistakes, co-founded LinkedIn with the purpose of connecting professionals and businesses. This was in contrast to SocialNet’s ambiguous, undefined value proposition.
- 2016: LinkedIn is acquired by Microsoft, and turns out to be one of the latter’s fastest growing businesses.
- 2020: LinkedIn is “the world’s largest professional network with 706+ million users in more than 200 countries and territories worldwide.” Furthermore, LinkedIn had an annual revenue of more than $8.05 billion USD in the fiscal year 2020.
“If you’re not embarrassed by your version one release, you released it too late.” – Reid Hoffman
Hoffman strongly believes that companies should allow their people to share their nascent ideas rather than (supposedly) ‘perfecting’ them.
I believe every innovation capture program within a company should be formed on the same principle. Give it time and it will work.
“An Obstacle-Free Path To Innovation Fired Entrepreneurship”
Myth #2: If you keep iterating the innovation program and adapting to feedback, ultimately the evidence will show you a clear path for its success.
Busting Myth #2:
Well, this one really hit me. If we are talking about myth then this would be the most popular. Take constant feedback, keep improvising, and slowly you will have a successful program is what I have heard everywhere.
However, what I found is that most of the time there will be a lot of unknowns. Users would not share what they want. They would not know what they want. They would not know the right way to express their desire. They may give emotional feedback rather than rational feedback.
I have personally spent a lot of time changing my innovation program based on feedback that I can completely relate to it. At a later stage when I considered feedback as only one signal, and used my own experience to decide the changes, it worked out better.
I would recommend that you hear from everyone, but do what you think would work the best.
Here is an interesting story if we relate this myth with business decision:
In 2007, Reed Hastings and Marc Randolph, founders of Netflix, originally an online DVD rental service, decided to pivot the company to an online streaming platform. The feedback at that time from a lot of people was it would never work; you would lose all the customers who do not have Internet. A significant percentage of your customers are not tech savvy. This will be a disaster. However, they saw the future which their customers could not. They realized that the future is all about the internet. This allowed Netflix to overcome scalability constraints posed by physical DVD shipping, as the company witnessed a tenfold increase in revenue over 2007 and 2017.
“Innovation Programs: Big Bets Vs Small Bets”
Myth #3: A small number of big bets will lead to a large return.
Busting Myth #3:
This is advice that was told to me from the start. Focus on a few things and make them work. Do not spread yourself thin. I am sure you might have heard do not be a jack of all trades and master of none.
If I look back – it is a pure myth.
During the initial days, when building the innovation program, I focused too much on a selected few departments. My thought was if I focus on two departments, then I can make it work for them, get amazing ideas generated from these departments and use this as a success to show to the other departments of the company. Honestly, it was not a very good call.
I figured out that the success of an innovation program is dependent on various factors some of them are not under your control. For example, few enthusiastic individuals within a department can change the outcome of the whole innovation program. It was difficult for me to know this in the start. If I have to redo it, I would start with a small version of the program but introduce it to multiple departments.
Here is another example in the business and investment area, that was shared in the book in context with VC investment. If we look at the data from an established US based venture capitalist firm (2004-2013) and plot the learnings in the form of a graph, we will see that 64.8% investments lose money, 25.3% investments reap decent returns and only 0.4% account for breakthrough returns.
This reminded me of another story which can give more clarity to understanding this myth:
Bosch, a German giant we all know, launched their Accelerator Program to explore new business model ideas. The program was spread over two phases, and it provided participating teams an initial funding of €120,000, followed by additional funding to test the profitability of high-potential business model ideas in the second phase. Bosch, over the last three years, has invested in more than 200 such teams, 15 of which have successfully passed the program and received follow-up funding to scale their business models. According to Uwe Kirschiner, VP of Business Model Innovation at Bosch Management Consulting, the Accelerator Program “has allowed Bosch to implement a fast, structured, and capital-efficient process for validating business models at scale”.
I believe innovation programs in each company should be designed around a similar model.
As people within the company are gaining more exposure in various industries via the Internet, they are coming up with various ideas. Therefore, for the IP department, it becomes necessary to provide needed technology so that their ideas can be captured with minimal friction and can be tracked over time. A single place where teams from different divisions can collaborate to churn out the best ideas is a must to generate valuable IP. I like TIP, by TriangleIP, that is built around this concept of democratizing innovation. It also helps in strengthening the innovation capture program.
Myth #4: The skills required to start a new program and manage an existing one are identical.
Busting Myth #4:
Exploration and exploitation are two different professions that require two different skill sets. There is a high level of uncertainty when you are exploring solutions and thus you need a program that provides that support to the innovators in the uncertainty. Most of the innovation programs are very structured. They have fixed disclosure forms, fixed evaluation criteria, and fixed rules on what invention disclosures will be moved to the patent stage. This structure works very well for the teams that are working on improving predefined products. However, the same structure fails very badly when you introduce it to the R&D teams that are in the exploration phase.
The teams working in the exploration phase are working in new areas where they are not aware of what can be patented or what can be considered as a new idea. This implies the innovation capture program should have support to answer such questions. For example, when an inventor uploads a basic invention, it can show how other companies have filed patents around that area.
This implies your innovation capture program should change for the teams that are in the exploitation phase as compared to the teams that are in the exploration phase. Most of the companies have one standard program.
“Innovating should be kept a secret”
Myth #5: Innovating teams must operate in secrecy.
Busting Myth #5:
The main aim of the innovation capture program is to foster innovation within the company. However, fostering cannot happen in isolation. In most companies people in one department do not know what kind of innovation is being done in other departments. Each department works as a silo.
Therefore, the key component in the innovation capture program should be building a community within a company which is beyond departments, business units and location. Inventors are highly aspirational and when they see more like them, it motivates them to produce more ideas thereby building ‘a great innovation culture’.
Let’s Sum It Up
”You can’t pick the winner without investing in projects that will fail. The larger the return you expect, the more projects you need to invest small sums in.” says the author.
Innovation capture programs are about supporting an environment that fosters people to submit a diverse range of innovative ideas. Therefore, it is important to see from outside the system where the innovation program is lacking. My plan of listing the above myths was to share with everyone how I was not able to realize the shortcomings of the innovation capture program as I was part of the system. A lot of things start getting visible when you see it from outside and you realize that the program can become the growth engine for your company.
All this necessitates the need for an effective innovation program at your enterprise. Equip them with the right tools to be an innovation driven company and concur the world.
“Failure is an option here. If things are not failing, You are not innovating enough.” – Elon Musk
About the Author
Deepak Syal, IAM Top 300 Patent Strategist, Singapore Entrepreneur of the Year, Edison award, Red Herring Top 100, Co-Founder at TriangleIP.
Featured image via Unsplash.