Innovation then … and now? | Synergetic Management

Innovation then … and now?

This is the second of a two-part look at creative outputs and innovation.

In the first part, we looked at an interesting blog post by Stephen Arnold who challenged his readers with the view that creative leaps by Google are done more via acquisition than by internal “idea / innovation labs”. This has profound implications for many readers because of the almost-universal (yet unconscious) tendency to benchmark our creative processes with what we think leading companies are doing and why we think they innovate better than we can.

In this second part, we will look at some conclusions Arnold drew from a study he conducted into how the technological leaders of decades ago actually innovated – how they used the creative process. (Hint: in most cases, they did not use any repeatable, reliable creative process, nor did they have a solid innovation process!)

(Note: in any quotation, emphasis is mine)

Almost 40 years ago, Stephen Arnold studied innovation for one of the Big Four consulting firms. His client, a Fortune 50 company, wanted to know: “How do technology leaders innovate?

Arnold focused on 12 “big innovation spenders” (vs. small, lean start-ups) in sectors such as electronics, pharmaceuticals, and manufacturing. His three key findings:

Finding One

While innovation was critical, the entire innovation effort was often unguided and relied on luck. These innovation leading lights did not know how to spark creativity with any repeatability.

First, none of the companies in the sample had much of a clue. Innovation happens, which is strikingly similar to the phrase “stuff happens”, “Así es la vida” or “C’est la vie.” The 12 firms in our sample were making oodles of money rolling out interesting, clever products …. (and) in order to keep the cash coming in, innovation in general and new products in particular were needed. But (in many interviews), we heard the same message: The innovations for which the firms were known arrived almost by happenstance. Someone got an idea to run a tube from a paint can to a cheap paint roller. Bang. A new product idea was born ….

Finding Two

Many different approaches were tried (often at the same time)to evoke innovation – not only was this wasteful, they still dependent on luck for success!

Some of the different approaches include:

  • Reverse engineering competitors’ products.

This is a useful exercise for business intelligence reasons. Yet, include this as part of the Creative Process and you run the risk of limiting your thinking by fostering preconceived notions about possible solutions based on what your competitors may or may not have done. Who says your competitors are doing it right in the first place?

  • Forming up special (or SWAT) teams.

The danger here is the belief that it takes a “special team” to use the Creative Process effectively. Sometimes it helps; sometimes, it does not. Special teams for a day or two? Potentially powerful if the Creative Process is properly facilitated. Special teams for extended periods? You run the risk that the absence of these seconded performers from their regular businesses may hurt you more than needs be. So, if special teams are not always necessary, nor are they always the best answer, what is the best answer? Often, the people most intimately connected to the problem are the best equipped to solve it!  

  • Innovations were purchased; start-ups were bought and absorbed by the company in the hopes inventions would arise.

Expensive way to gain innovations – you pay for the innovation + any profit margin the innovation owner cares to charge. Also, unless you are very much bigger than your acquisition, you have just imported a headache assimilating two different cultures.

  • Creation of skunk works, some of which “worked on science fiction projects for government agencies.”

 Unfeasible for all but the biggest $$$ contracts.

  • Massive experimentation (with questionable control).

Wasteful! Throw enough resources at a problem and iterate towards a solution negates centuries worth of engineering and business sense. The whole purpose of repeatable, dependable creativity is to eliminate this kind of waste!

  • Some efforts “included a ‘sandbox’ or ‘playroom’ where anyone with an idea could leave the normal routine and experiment.”

Has its uses, but also encourages the idea that creative work is separate from everyday work. The best ‘sandbox’ is one where the culture supports creativity and there is an enshrined process for working with everyday colleagues to innovate. Then everywhere becomes a sandbox anytime!

  • Improvements were sought from the “forced disruptions” caused by “reorganizations, hiring and firing, and strategic shifts.”

If this worked, then Business Process Reengineering would have turned everyone into creative powerhouses! Funny, we do not remember this happening….

  • A crash-program technique Arnold called an early version of a “death march” – “The idea is that a deadline is set and the professionals were enticed to reach the goal and win the innovation Super Bowl. As crazy as it sounds, this method produced some startling consumer product successes ….”

Sadly, this may have worked, but at a huge cost. One way it works is by ‘encouraging’ those involved to suspend judgments. Suspending judgment allows embryonic ideas to survive and be developed into solutions – suspending judgment is what makes good old-fashioned Brainstorming so successful. But anyone in a crash innovation program will find the exercise exhausting, and this will lead to attrition of those who paradoxically may be your most creative staff.

Arnold sums it up best:

Management genius or luck? No one knew. Stuff happens.

Finding Three

Purchasing innovation was a valid strategy.

For some in our sample, the (purchasing) approach was also a hit-and-miss proposition. The practitioners of the just-buy-it approach to invention rationalized the approach in terms of time to market and cost savings.

And Arnold identifies perhaps the real reason for purchasing innovations:

One ancillary finding: Buying companies was described as “fun.”

Arnold’s conclusions:

The net net of the study was that innovation was a dark art. None of the companies in our sample of 12 had a repeatable formula for producing inventions. Curiosity, persistence, intelligence, instinct, time, a tolerance for failure, and luck seemed to be the common ingredients.

It is intersting Arnold has identified some of the key cognitive and affective skills required for effective creative problem solving – although luck and time are useful in any effort! The irony is that, far from being simple observations, they represent important elements of a repeatable Creative Process.

Incredibly, contrast the above quote with another of his conclusions:

One of the surprises for me was that innovation was perceived by the managers we interviewed as essential to the success of the firm. The firms in our sample had hammered the mantra of innovation into the nerve fibers of the organization. Talking about innovation and delivering were in 1974 two quite different functions.

So something these managers saw as essential was essentially left up to luck or accelerated in half-hazard, wasteful ways. Incredible!

But why should I care about a 40 year-old study?

Innovation is not new. Neither is the need for innovation new. Yet, these giant companies (some with $20 billion in revenue in 1970’s dollars) were dancing in the dark as to how to foster creativity reliably and repeatedly, i.e. how to foster innovation.

How many times have you seen it stated that since manufacturing has largely ceased to be a viable path to prosperity for the West, innovation is the key to our future prosperity? Innovation is vital to many leading firms in many industries, and even the follower companies rely on innovations to copy and cost-reduce to survive.

The heavyweights of yesteryear fumbled for solutions and many opted to buy innovation as an ‘innovation strategy’. Today, even with all the research into creativity, things are not much better. Arnold has identified Google (and others) as relying on the acquisition strategy for a principal source of fundamental innovation. You think they would have ‘cracked the code’ by now.

Yet, innovation – and the Creative Process that drives it – is surprisingly easy to do well repeatedly. All you need is a good process and a good guide.

Synergetic Management stands ready to give you both … call us today!

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