Innovation and disruption labs exposed.
At first Google ruined our perception of culture and set standards so ridiculously high that most business in South Africa doesn’t even attempt to fix their culture because the bar has been set so high. Now with their skunkwork’s “Solve for X” and the acquisition of Idealab Google have outsourced the smart thinking and can afford to hire the best minds in the world to help solve problems most of us don’t even know are problems yet. This should not stop even the smallest business from being innovative and disruptive in their immediate space. But what is Innovation and disruption besides the trendy terms that are thrown around and leadership conferences?
Its important to get your head around that fact that all disruptors are innovators, but not all innovators are disruptors. A disruptive technology or idea literraly changes the way we think, behave and buy and can influence countless people to experience something new in their lives. Innovation can do the same thing but more often than not, is incremental and has a smaller impact on the general populus but does simplify, speed up and improve something to justify the change.
The next imporant fact is that you are more than likely not going to be the ground breaking innovator in your industry and your opposition will be first to market. And thats perfectly okay. In Adam Grant’s book “Originals: How Non-Conformists Move the World” he beautifully explains how marketing researchers Peter Golder and Gerard Tellis compared the success of companies that were either pioneers or settlers.
The pioneers were first to market: the initial company to develop or sell a product. The settlers were slower to launch and waited until the pioneers had created a market before entering it. When Golder and Tellis analyzed hundreds of brands in three dozen different product categories, they found a staggering difference in failure rates: 47 percent for pioneers, compared with just 8 percent for settlers. Pioneers were about six times more likely to fail than settlers. Even when the pioneers did survive, they only captured an average of 10 percent of the market, compared with 28 percent for settlers. Feel better?
When you see disruptive innovations coming from outside your organization you have 3 options:
- Option 1: Chase the market
- Option 2: Find new markets based on your expertise
- Option 3: A non-productive approach, to deny that the disruptive innovation will affect you market at all and continue business as usual. Lets all bury our heads in the sand, shall we?
When you learn of a radical new invention that threatens to disrupt your business and market, do not ignore it and don’t “insulate” against these disruptive threats and try preserving your current business model. Don’t be afraid to educate the market if the move is happening especially if you are leading the charge.
So how should you bake innovation into your company?
At the pharmaceutical giant Merck, CEO Kenneth Frazier decided to motivate his executives to take a more active role in leading innovation and change. He asked them to do something radical: generate ideas that would put Merck out of business. His executives worked in groups, pretending to be one of Merck’s top competitors. His team developed ideas for drugs that would crush theirs and key markets they had missed. Then, their challenge was to reverse their roles and figure out how to defend against these threats as Merck.
This is referred to as a “Kill the company” exercise. Its super powerful as it reframes a gain-framed activity in terms of losses. When deliberating about innovation opportunities, the leaders weren’t inclined to take risks. When they considered how their competitors could put them out of business, they realized that it was a risk not to innovate. The urgency of innovation was apparent
Running an innovation lab or disruption session in your business is a great starting point. Start with some hard-hitting questions that address what actions might your competitors take tomorrow that would keep you awake at night. Other questions you can pose your team are as follows:
- What new technology could potentially destroy our business model?
- What new legislation/law could potentially destroy our business model?
- What’s happening in another part of the world that you could adopt and adapt in your environment?
- What are some of the disruptive changes in your industry that might serve as the source of innovation for you and your company?
- What are the key emerging technologies, and how are they being used inside and outside your industry, company, and region to create proprietary advantage?
- Is there new business models emerging that you can adopt or adapt to deliver radical improvements in the way you and others do business?
- Can you expand not just your “share of market” but also your “share of wallet” by adding new business models—for example, if you currently have a product business, can you add information, services, or solutions?
- Can you expand into adjacent businesses by either taking over activities that used to be done by someone else in your industry, expanding into new markets, or adding new products?
- Are there fragmented industries where significant value can be delivered through consolidation?
- Are there shifts in power with an entry or exit of a key player or consolidation of several players, which threaten your existing position or create opportunities to partner in your existing business or enter a new one?
- Are new markets or businesses emerging in other parts of the world that create opportunities or threats?
- Are there opportunities to create value by outsourcing or offshoring activities that you currently perform inside your organization?
- Is there activities that you currently source from outside that you should be doing inside to create proprietary advantage?
- Is there impending or shifts in regulation, political power, or society that threaten to disrupt entrenched power bases and provide opportunities for new entrants?
- Where is the greatest complexity now?
- What are the most “emotion-generating/engaging” service attributes you can offer that you could never satisfy?
It is never a bad idea to throw in a PEST or SWOT analysis into the mix to thicken out the risk elements. Always think of worst-case scenario first and work your way towards a winning strategy. Successful entrepreneurs are able to recognize patterns before an opportunity takes shape and search for ideas at the intersection of markets, industries, and emerging technologies. Look for business models that work well in one market and can be adapted and applied in another.
An innovation workshop is never the only step to creating disruption in your business or market place. The stages you should try including are:
- Problem identification (customer journeys for anywhere between 1 month and 1 year)
- Clarify and challenge the biases and business models in your firm and in your industry
- Analysis and research; always have facts and figures as the basis for decision-making.
- Listen to—and learn from—the market: Identify sources of significant problems that cannot be solved using today’s product and service offerings. Focus first on the problem—not the solution. Be sure that you don’t just listen to your current customers.
- Design thinking stages (internal and collaborative); this helps you discover new product ideas.
- Unpacking the designs into options, road maps and feasibility.
- The decision making process.
- Assessment of capability and resource gap analysis.
- Identify important global and local trends that signal potential revolutionary shifts in customer behaviour
- The case for a business plan with revenue and value potential.
- The narrative for staff and the market.
- Design and implementation (includes assigning all your required resources)
- Testing the ecosystem.
- Launch and iteration.
Labs like these should take place on a set agreed frequency and adding external people for a unique POV adds a rich layer of brains that doesn’t have the same industry bias’ that your people do and broaden your perspective.
Here are a few tips on Innovation ideas and disruption workshops that spark original ideas:
- Run an innovation tournament.
- Welcoming suggestions on any topic at any time, doesn’t capture the attention of busy people.
- Innovation tournaments are highly efficient for collecting a large number of novel ideas and identifying the best ones.
- Instead of a suggestion box, send a focused call for ideas to solve a particular problem or meet an untapped need.
- Give employees three weeks to develop proposals, and then have them evaluate one another’s ideas, advancing the most original submissions to the next round.
- The winners receive a budget, a team, and the relevant mentoring and sponsorship to make their ideas a reality.
- Picture yourself as the enemy.
- People often fail to generate new ideas due to a lack of urgency.
- You can create urgency by implementing the “kill the company” exercise [Stolen from Lisa Bodell, CEO of Futurethink.]
- Gather a group together and invite them to spend an hour brainstorming about how to put the organization out of business—or decimate its most popular product, service, or technology.
- Then, hold a discussion about the most serious threats and how to convert them into opportunities to transition from defence to offense.
- The Pitch:
- Invite employees from different functions and levels to pitch ideas.
- At DreamWorks Animation, even accountants and lawyers are encouraged and trained to present movie ideas.
- This kind of creative engagement can add skill variety to work, making it more interesting for employees while increasing the organization’s access to new ideas.
- Involving employees in pitching has another benefit: When they participate in generating ideas, they adopt a creative mind-set that leaves them less prone to false negatives, making them better judges of their colleagues’ ideas.
- Hold an opposite day.
- Since it’s often hard to find the time for people to consider original viewpoints, one of the smart practices is to have “opposite day” in the boardroom and at conferences.
- Executives and staff divide into groups, and each chooses an assumption, belief, or area of knowledge that is widely taken for granted.
- Each group asks, “When is the opposite true?” and then delivers a presentation on their ideas.
- Word Banishment
- Ban the words like, love, and hate.
- At the non-profit DoSomething.org, CEO Nancy Lublin forbade employees from using the words like, love, and hate, because they make it too easy to give a visceral response without analysing it.
- Employees aren’t allowed to say they prefer one Web page over another; they have to explain their reasoning with statements like “This page is stronger because the title is more readable than the other options.”
- This motivates people to contribute new ideas rather than just rejecting existing ones.”
- Welcome criticism.
- It’s hard to encourage dissent if you don’t practice what you preach.
- When you receive an email criticizing your performance in an important meeting, copying it to the entire company sends a clear message you welcome negative feedback.
- By inviting employees to criticize you publicly, you can set the tone for people to communicate more openly even when their ideas are unpopular.
- Shift from exit interviews to entry interviews.
- Instead of waiting to ask for ideas until employees are on their way out the door, start seeking their insights when they first arrive.
- By sitting down with new hires during onboarding, you can help them feel valued and gather novel suggestions along the way.
- Ask what brought them in the door and what would keep them at the firm, and challenge them to think like culture detectives.
- They can use their insider-outsider perspectives to investigate which practices belong in a museum and which should be kept, as well as potential inconsistencies between espoused and enacted values.
In summary, throwing innovation and disruption workshops may be seen as a cool new thing but they stand for ground zero in change for big business and can be leveraged to unlock creativity for youur business and for customers and their wider community. Build an innovation lab to make sure you do not underestimate the value it can deliver.