Don’t Fall Victim to Things That Stifle Innovation

With all the talk about the importance of innovation, you’d think we’d be better at it by now. Not so according to a recent Accenture study of more than 500 executives at British, French and U.S. corporations. Rather than offering “the next big thing,” researchers said that innovations coming to market today are more typically “line extensions.” Instead of the game changing products, services, and business models that were anticipated several years ago, many so-called innovations have become considerably more limited in scope. 

First the good news: Over 70 percent of respondents to the Accenture study ranked innovation among their top 5 priorities--with nearly one in five (18%) putting it at the head of their list. However, study authors found two dominant obstacles standing in the way of driving higher returns from innovation: Conservatism and the “invention trap.”

1.      Conservatism focuses on individual line extension renovation rather than developing a broader portfolio that also includes big, hairy audacious ideas.

2.      The “invention trap” is an overreliance on the invention process itself.

The problem here is that most organizations—large or small--lack systematic, enterprise-wide processes that can commercialize inventions into scalable products or services and bring them to market in a timely manner. 
Here’s what else disturbed us about the Accenture report:

·         Only 34 percent of respondents believe their company has a well-defined innovation strategy.

·         46 percent say they have become more risk averse in considering new ideas.

·         45 percent see their company pursuing a portfolio of smaller, safer opportunities rather than seeking the next breakthrough.

Busting through inertia

We recently interviewed Michelle Mason, managing director of ASQ for the Association Adviser enews. Michelle told us that if your organization has complex problems to solve, “look for employees with high levels of curiosity.” Eric Wulf, head of the International Car Wash Association told us he’s a “resource getter, not a management of people person” and Bob Hasmiller of the National Association of College Auxilliary Services told us he’s a big advocate of “Management by Walking Around (MBWA)” and hiring people who are insatiably curious and lifelong learners.
Here’s another shocker: Nearly all (93%) of the executives surveyed in the Accenture report regard their company’s long-term success to be dependent on its ability to innovate. At the same time, less than one in five (18%) believe their own innovation strategy is delivering a competitive advantage. Fewer than half the present-day respondents believe they have an effective approach to new product development or are seeking innovation effectively.

C’mon people we can do better than that.

Respondents cited specific challenges to innovation (we call ‘em excuses)

• Predicting future trends (30%)
• Achieving cost containment (27%)
• Securing ongoing budget support (26%)
• Leveraging new technology (26%)
• Transforming new ideas into marketable goods and services (24%)

Macro View

Tuesday, the Standard & Poor’s Case-Shiller home price index posted the biggest gains in seven years as housing prices rose in every one of the 20 cities tracked.  Further, consumer confidence reached a five-year high in May according to a Conference Board report also released on Tuesday, with big improvements in Americans’ views about both the current economy and future economic conditions. It hasn’t hurt that employers have added jobs for 31 straight months.

Conclusion

At the end of the day, the only thing really stifling innovation at most organizations is fear or failure and lack of imagination. That’s why we pioneered the Art & Science of Strategic Stumbling™.

You can’t learn if you don’t fail from time to time. And that’s the main difference between visionaries who build great companies and products and executives who simply build careers. Who would you rather work for (or hire)?

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Tags: Accenture study of innovation Standard & Poor’s Case-Shiller home price index, the invention trap, management by walking around, lifelong learning, Strategic Stumbling