Are you truly innovating?
I recently had the pleasure of meeting up with Maaike Doyer, Global CFO and Strategy Designer at Business Models Inc (BMI). If you haven’t heard of BMI perhaps you’ve heard of their Business Model Canvas? It’s become a standard for capturing early new business model concepts in a simple, clear manner. I’ve used it myself many times and love it.
I took the opportunity to ask Maaike her perspective on the state of the innovation world today. Her answer, “It’s more uncertain.”
We have been and continue to be in a time when companies know they have to innovate given the changing economic environment, yet the environment is uncertain, because all the effort that has already been invested in innovation hasn’t yielded the results organizations were seeking.
Perhaps it’s because all this activity amounts to “innovation theater.” In speaking with Maaike, she echoed the concern outlined by Steve Blank in this Harvard Business Review article, that despite working with great partners coming up with great ideas, few of these ideas are being developed and showing up in market. As the article says, companies are just doing “innovation theater.”
What’s getting in the way? First, organizations don’t always set a true innovation strategy—how will they win with innovation? It’s not a one-size fits all approach. Companies need to articulate their clear strategy and approach to win with innovation. Second, what people forget is that innovation is hard and is not just about implementing design thinking practices, starting an internal incubator, or giving people 20 percent time off to develop ideas. It takes great technology and R&D to bring ideas to life. It takes fortitude and commitment to bring an idea to market. It takes having leadership capital to get an organization behind an innovation leader. It takes creating psychological safety for teams and creating a healthier relationship with failure. To this point, Maaike shared that BMI is now working on a model that considers a more holistic total innovation system to help companies create a complete end to end innovation engine.
To be sure, innovation isn’t easy. Maaike shared how large companies, in particular, struggle with implementing innovation, not able to take the great ideas they come up with and get teams and resources committed to bring them to life. One practice she sees proving to be more successful in gaining that commitment from companies in Silicon Valley is co-innovation, companies coming together to develop something new. It’s in seeing the possibility of what they can co-create that the organizations get excited and committed to doing something new. Perhaps it also gives them the backbone and strength to follow through, both having skin in the game. This can be especially true when considering new business model innovation. Take the famously successful example of IBM, Intel, and Microsoft partnering to create the PC industry.
The final thing that Maaike shared that is worthy of note is that she often sees companies managing a Product Portfolio, not a true Innovation Portfolio—meaning that many companies are not taking a broader view and seriously considering new business models. I think this is an especially important point given how much is changing with the Fourth Industrial Revolution and how much disruption or new opportunities are available given the changes and new technologies and systems being formed.
A few key takeaways:
Define a corporate innovation strategy. Really understand how you are going to win with innovation. What approach best fits your business strategy?
Avoid innovation theater. Understand what it is going to take to truly commit to executing innovation and bringing it to market. Create a holistic system within your company and get top leadership buy-in from the start.
Consider co-innovation. This should be a serious consideration especially if you are exploring new business models. Who can you partner with to enter or create a new market?
Generate business model innovation. Building on the last point, in today’s environment, make sure you are creating an innovation portfolio that includes new business models to set you up to win in the new economy.
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