There is a quote that has been attributed to multiple individuals that says, "Innovate or Die". It is based on the premise that to grow and prosper in the marketplace, companies must continuously innovate. The fast-paced world that we live in demands it even more today. Every company, large or small, needs an approach for the journey to innovation that they can follow.
Why is innovation so important? All of the latest and greatest consulting company diagrams, charts, systems and tools like Magic Quadrants, Hype Cycles, SWOT analyses, Agile, Lean, Six Sigma, Business Models, Collaboration Tools, are already available. If we use these, won’t we be innovating? Not necessarily. While all those tools are beneficial, they’re not specifically designed and built to help you continuously innovate throughout your organization. Your business should constantly innovate to continue being a vibrant, thriving organization that continues to grow and profit in the marketplace. You don’t want to find that others came along and slowly chipped away at your market from the bottom up, as happened in the steel industry. This scenario was explicitly detailed by Clayton Christensen in the Innovator’s Dilemma.1
What does it take to become continuously innovative? It requires that a company have a culture of innovation where everyone is focused on achieving value for both the customer and the company. This journey has at its core the “Empathy Triangle,” which embodies the social, cultural, economic and environmental aspects of the world in which the business operates.
Creating a culture of innovation requires that you integrate the three major components of any business: it’s customers, employees, and the ecosystem in which it operates. This integration requires that the desires and experiences of these three components be met in such a way that it enhances each. It’s not an easy task. We’ll examine ways to do that in order to have a successful journey and one that ensures that the business is advancing and growing along the road to innovation. The goal is to identify and address specific challenges that achieve value for the customer, employees and the company’s ecosystem.
No matter which of the major components you focus on, the important aspect is to understand what the desired outcome is for any business transaction or process. As Theodore Levitt famously said, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”2 Focusing on what the end user truly wants is the goal to continuous innovation.
The ability to do this was explored by Jeffrey H. Dyer, Hal Gregersen and Clayton M. Christensen in their 2009 Harvard Business Review article titled, "The Innovator's DNA." Their detailed analysis of the leaders of the most successful and continuously innovative companies led them to five specific "discovery skills" that are used by the most creative individuals.3 They include:
The components outlined in “Innovator’s DNA” are like the ones used in Design Thinking. Many companies such as Apple, Coca-Cola, IBM, Nike, and Procter & Gamble believe that applying design principles to strategy and innovation dramatically improves the entire innovation process. In addition to using design thinking to develop products and services that delight customers, they also use it for effective strategy development and organizational change.
Design Thinking is an approach to complex problem solving to creatively address needs that may or may not be well articulated. The key components of design thinking are:
The aspect stressed in both Innovator’s DNA and in Design Thinking is empathy – truly understanding the needs of all the users involved. That is, as Theodore Levitt stressed om his lectures, they are not looking for a “product” but rather they want to satisfy a need for a result.
If this seems like a lot of work, it is. But helping the customer achieve their “quarter inch hole” creates a bond that allows for satisfied users who will want to come back again and again knowing they can depend on being “heard.” They will also trust you to deliver what they truly need, not just a response of “here is the latest new drill that will give you the best quarter inch hole ever.”
The goal of Design Thinking from an implementation standpoint is to create:
In most cases, users can't tell you specifically what they want. Sometimes they will only be able to tell you that something is not working or that they are unhappy with their current situation. They can't imagine the scenario in which there is a solution to meet their need, or perhaps they can only imagine an enhanced iteration of the current solution. As Henry Ford supposedly said, “If I’d asked them what they wanted, they would have said ‘Faster Horses.’” At the time, consumers couldn’t imagine that a car would be available and affordable to replace their horses.
This is where Design Thinking methods help you work through building and testing new ideas. The iterative cycle of building and testing with the users allows for continual feedback and refinement. During this process, you are observing and listening and gleaning new insights from the users. You will often hear them say, “Now that I’ve seen this, what I really want is….”
Even though there are many aspects to establishing continuous innovation, there are ways to compress the cycles if time is of the essence. Google Ventures needed a way to help their acquisitions with the issues they were encountering and the problems they were trying to solve. They used the Design Thinking processes as well as those of business strategy, innovation and behavioral science and created a tightly focused approach of one week cycles that they call a “Design Sprint.” (Note: This is not the same as the sprint cycle used in Scrum - an Agile methodology.)
A Design Sprint allows Google Ventures to help their new acquisitions tackle challenging problems in just 5 days. This short-cycle process allows a team to fast-forward into the future to see how customers react to their design prototype, without having to make any expensive commitments. It helps the companies using this process to see both their successes and failures. Seeing the flaws or failures is as critical an aspect of the process as the successes. Identifying what won’t work after just five days allows them to continue to iterate without a significant outlay of time and resources. This has proven to be so beneficial that Google itself has now adopted this approach.
In their book, "Sprint," Jake Knapp along with John Zeratsky and Braden Kowitz explain their Design Sprint Methodology.4 It's a five-day process, from Monday to Friday. The specific activities that take place during the week are labeled as:
Before you do the “Sprint,” you need to prepare. Take time to understand the challenge you are trying to address. The Sprint can address both short- and long-term projects. Google Ventures has found that the Sprint can help in situations when you have the following types of projects:
The Sprint commits you to a testing scenario with the customer, or end user, at the end of the week (on the 5th day). This approach allows for rapid feedback and provides a way to answer questions before committing to a course of action.
In summary, establishing a culture of continuous innovation requires that a company focus on achieving value for the customer, employees, and the company’s entire ecosystem.
It accomplishes this through:
The journey of continuous innovation is critical to continually grow and develop the organization in today’s marketplace. But once you have a good roadmap, the journey becomes a lot more enjoyable.