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- Herausgeber: Die Keure Publishing
- Kategorie: Fachliteratur
- Sprache: Englisch
Change the way you think about innovation and give yourself every chance of success!There are lots of books, courses, and videos on innovation. They are fun and usually motivating, but seldom deliver long-term results.
Cycles is a fun book, but more importantly, it explains how to innovate at every stage. Consistent winners are idea builders that make good or even mediocre ideas great over time. With
Cycles you’ll learn by doing how to grow ideas up to 6x faster while cutting risks by over 50%. This book brings together 4 years of research and the work of 22 innovation experts into a simple system with easy-to-use canvases and tools. The foundation of this system is thinking of idea building as an ongoing process of cycles. Some cycles are short, and some are long. The best cycles include the ABCs of innovation.
A = Align
B = Build Ideas
C = Communicate and Check
S = Systematically Improve
This system ties the theories and research from hundreds of books into something easy to understand and something you can do right now. If you want to be a better innovator,
Cycles will change the way you think about innovation. More importantly, with easy hands-on tools,
Cycles will make it easier to innovate faster while reducing risks.
A straightforward and effective method that you can start applying right away!
ABOUT THE AUTHOR
Bryan Cassady is a long-time entrepreneur and has built successful businesses in six countries. His success rate is eight successful businesses from eleven tries. For more than ten years, he has been teaching Innovation and Entrepreneurship at leading business schools around the world (KU Leuven, Solvay, EDHEC), led some of the world’s largest and most successful accelerator programs (The Founder Institute and the European Innovation Academy), and coached over 400 companies. He is currently working on the Global Entrepreneurship Alliance- a foundation being set up to train 1 million entrepreneurs by 2027.
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Couverture
Page de titre
ACKNOWLEDGMENTS
We are on a mission to make entrepreneurship education available to millions. This book is the book I wish I had when I started teaching entrepreneurship.
This book is dedicated to my students and clients. My students pushed me to share my ideas in book format. My clients helped ensure that everything I wrote could be applied in the real world.
Over a period of 3 years, I worked with 22 amazing co-au-thors. Their expertise and stories helped pull everything together.
One person that is not listed as a co-author, but who inspired a lot the content is Doug Hall. Over the years, I have read many books and attended many training sessions. The best training in Innovation I ever attended was run by Doug Hall and his team at Innovation Engineering. It was in these sessions that I was first introduced to the original works of Edward Deming and the importance of getting systems right to increase the odds of innovation success. I strongly recommend their trainings and all of Doug’s books to anyone interested in improving their innovation success odds.
During the writing process my coach and mentor was Steven Macgregor. He helped refine and tie together the ideas coming from many different places.
Lastly, I would also like to thank some other people whose help was invaluable. Gwenn Sonck listened to me talk about the book for two years. Vishruti Singh worked hard and late to make the great visuals for the book. Zoe Cassady made sure I understood the importance of getting the visuals right. Nikunj Gupta and Simran Ajwani; their never-ending energy got my first classes ready and the canvases improved. Shayne Smart pushed me to extend my book’s functionality by encouraging the creation of mural canvases to support most of the chapters.
Most important of all were my son Tibo Cassady and my partner Luciana Bento Praxedes. Tibo was both my harshest critique and strongest supporter. Luciana, you were my muse that helped me finally get this book done.
This book is the product of many minds. For the new insights each person brought, I am thankful. For any flaws, I take full responsibility.
Thank you!
Bryan Cassady
CONTENTS
TOOLS
Tell me and I forget. Teach me and I remember. Involve me, and I learn. Benjamin Franklin
In the coming pages, you’re going to get a lot of new information. To help you make these ideas something you can use, there are practical tools and canvases at the end of each chapter.
You can download the full cycles toolkit in PowerPoint format:
http://tiny.cc/cyclestoolkit-ppt
You can download canvases for each of the book sections at these links:
Alignment
www.tiny.cc/M-align-template
Build
www.tiny.cc/M-build-template
Communicate/check
www.tiny.cc/M-cc-template
Systematically improve
www.tiny.cc/M-systems-template
Habit building
www.tiny.cc/M-habits-template
PART
1
INTRODUCTION
CHAPTER 1: AN HONEST INTRODUCTION
This chapter was co-written with Lana Kristine Jelenjev.
Psst! Do you want to know the secret of guaranteed, instant, overnight innovation success? Of course, you do! Don’t we all? Well, the good news is you’ll find it in this book. It’s on page 319 in the last paragraph, to be precise. (Here’s the link for those of you on Kindle: “Final Thoughts”) A quick disclaimer, though, only if you read the entire book will it really make sense. I understand you’re impatient and probably want to check that out first, and that’s fine; I’ll be waiting for you here.
OK, now that you’ve been there, you know the secret, which is kind of important. It’s actually the key to this book.
If you’re ready to learn and work hard, this book will help you learn how to grow little ideas into big ideas at work, at home, and any other place you think is important.
Now would be a good time to clarify an important point. This book will not provide instant success. It will offer a proven innovation method that helps build ideas up to six times faster while reducing failure risks by at least 50%.
Why You Should Read This Book.
There are more than 200,000 books on innovation and startups, more than 25,000 books on how to scale up your company, and nearly 70,000 books about building your own business. What on earth could make it worth my while writing another book – or worth your time to read it?
The answer is simple – there are ways to innovate better, and you have a right to know.
Personally, I have built eight successful businesses in six countries, and my co-authors have built dozens more. My success rate is eight hits from eleven tries (if you’re interested in the three losers, one was a big failure, and two just never took off).
A little over ten years ago, I started teaching Innovation and Entrepreneurship. I have taught at leading business schools (KU Leuven, Solvay, EDHEC), led some of the world’s largest and most successful accelerator programs (The Founder Institute and the European Innovation Academy), and coached around 200 companies.
In my work, I have seen two types of innovators.
The big idea hunters.
The idea builders.
It is easy to understand why the idea builders are better at reducing risk. What is perhaps more exciting and surprising is understanding that idea builders also move faster and usually build more significant ideas than the “big idea hunters”. My book explains how to become a successful idea builder. It is a book I wish I’d had when I wanted to start my first business as it would have helped me understand how careful, disciplined, and consistent efforts beat big bangs almost every time.
There Are No Quick Fixes.
In today’s world, we want quick fixes to big issues, and too many books are fast food for the business mind. Something that you can digest quickly but is not healthy for your business.
Most of these books contain a kernel of truth, but it is not presented in sufficient detail, so anyone who tries to put the theories into effect will not get the expected results. In this book, I take the existing theories and add to them. The additions are practical and explain all of the “how-to’s”.
This book ties the theories and research from hundreds of books into something easy to understand and something you can do right now. You don’t need to read all the books that I have read, as this one will make innovation holistic and step-by-step.
What Will You Find in This Book?
For years, I have talked with innovators about the importance of grinding out ideas, and still, many remain skeptical. A lot of my students and many people I meet in the business world believe that successful innovation is all about ‘Eureka moments’ and that game-changing ideas appear out of a clear blue sky. I knew this was not true, but I needed facts. It inspired me to run a four-year research program to identify the drivers of innovation success. This research was a team effort. In interviews with more than 400 companies, we saw many that succeeded and more that failed. The most significant difference between winners and losers is that smart winners make good or even mediocre ideas great over time.
As in life, some companies will succeed by luck. Unfortunately, luck is something hard to plan.
How do you increase your odds of being a smart winner? The best way is to think about growth as an ongoing process of cycles. Some cycles are short, and some are long. Whatever the length, they need to be about learning and improving. The best cycles include the ABCS of innovation.
Thinking like a Great Artist.
There is an old saying: “Bad artists do it on their own, good artists copy, great artists steal.” In the innovation space, there is a lot of ‘stealing’ going on. The reason is simple; there is a core logic to successful innovation. The logic is quite simple: create a bias for action, do the right things, learn, improve, and repeat.
This is not the first book or even the thousandth book about innovation. It does not replace all the work done by pioneers in this field, but instead uses facts derived from research to build on those ideas to provide a step-by-step guide to innovation success.
If you talk to innovation experts, many will refer to ideas developed by Edward Deming almost 40 years ago. Deming introduced the concept of PDSA (Plan, Do, Study, Act). His work is profoundly insightful, but a hard read.
Eric Ries (The Lean Startup), Alex Osterwalder (The Business Model Canvas), and several others wrote bestselling books, “repackaging” PDSA. They simplified Deming’s ideas and made them more accessible to a broader audience. Agile, Scrum, and Design thinking can all trace their intellectual heritage back to PDSA.
Many of these methods do a great job explaining what you should be doing and why you should be doing it and provide powerful thinking frameworks. But, when it comes to the practicality of how to do it, they seem to come up short. For example, Eric Ries introduced a powerful concept called validated learning that uses build, measure, learn cycles. I loved his work but felt I was left stranded with questions about how to actually do it. What should you build? How do you build? How should you measure it? How do you effectively capture learning?
The new and arguably, most popular method to promote innovation fast is design sprints. They cover the ‘how’ of PDSA but miss a bit of the ‘why.’
This book covers not just why and what but also how. It does this by providing:
The ‘ABCS’: a framework to help you decide what to do next.
Clear guidance on how to run the cycles of learning.
A systems approach to applying learnings more effectively.
How to Use This Book.
At the heart of this book lies the difference between working in your business and working on your business.
The secret is to move away from the standard model in which 80% of a new or expanding company’s effort goes into Big Idea hunts. Using the guidance in this book will reduce that 80% to 20%. Where do the surplus resources go? A great deal will transfer into active learning designed to build your ideas faster while reducing your failure risks.
This book is not just theory; it is facts derived from my research about building a basis for action. Each chapter will take you through the CYCLES process, providing exercises to apply these ideas to your business.
You can read this book as a stand-alone to learn more about systems of effective innovation. But if you can, I’d encourage you to apply what you learn as you go. A powerful and very successful method is to use this book to support a design sprint. Before each section of the sprint, read the relevant section and apply what you have learned. It may look like this:
Sections of this book
Introduction
Build
Communicate/Check
Systems
Alignment
Monday
Tuesday
Wednesday
Thursday
Later
Key parts of a Design Sprint
Map
Decide
Prototype
Test
Debrief
Sketch
Storyboard
Gather feedback
You Have a Choice: Stop or Continue.
According to a McKinsey study, seven out of ten companies rank innovation as one of their top five priorities. The same study shows that 94% are unhappy with their ability to innovate, indicating that something is clearly very wrong with how organizations are currently approaching innovation.
If you are happy being unhappy, feel free to stop here. If you want to join the ranks of innovation winners, read on.
CHAPTER 2: KNOWING WHAT AIN’T SO: THE THREE BIG MYTHS OF INNOVATION
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so…”
ATTRIBUTED TO MARK TWAIN
Three Myths of Innovation.
Innovate or die! That is not a myth. In a world of high consumer expectations, unrelenting change, and intense competition, it is a fact backed up by the numbers and my own experience. But less well-known is that if you innovate the wrong way, you may die even faster!
I have spent a great deal of time researching what does and what does not work and have identified the three most common mistakes business people make when thinking about innovation:
Innovation is just about big ideas.
There are recipes for successful innovation.
Innovation is about creativity, not systems.
By dispelling these myths, innovation will work harder for you, yielding better results.
Myth 1: Innovation Is Just About Big Ideas.
Today, everyone is looking for a short-cut to the next big idea. We are enamored with the belief that big ideas are the secret to fame, success, and happiness.
We have all seen the stories in the news, in books, and on television. The story is simple: “Start with a big idea, work hard, and success will follow.”
In my opinion, the biggest and most harmful myth a company can believe in is the notion that big ideas will save the day. When companies focus on big ideas, they over-think, over-invest, and over-commit to the wrong ideas. Too often, they waste time doing nothing while waiting for a big idea to arrive.
As they wait, they tend to ignore the process needed to build ideas and make these ideas happen. Worse yet, they create systems that block people who want to innovate, ignoring potentially useful small ideas because they are too focused on waiting for those big ideas! (For a great short video on the craft of building ideas, watch Steve Jobs in this two-minute video: http://tiny.cc/cyclesjobs).
Instead of adopting grand strategies, innovation leaders pick a strategic direction, start getting things done, learn along the way, and keep pushing until small ideas become big ideas. Most importantly, they start with what they already have, looking at ways to develop existing products and ideas to make them better and more commercially successful. As long as companies wait for the muse to tap them on the shoulder with a big idea, they will continue waiting.
The reality is that almost anything you see as a big idea today started as a small idea that was nurtured, developed, and changed over time. We believe in big ideas because we tend to see only the result of the innovation process, so it is easy to believe in overnight successes. We do not see the whole process with the changes of direction and backtracking, which led there.
The misconception about big ideas is the notion of overnight successes. With startups, the logic of big, overnight success seems to make the most sense. Success may come after three months, or it may take 15 years – but 6 years is probably the average. Microsoft went public in 1986 – after a 1975 startup. For Google, those milestones were 2004 and 1996.
Moviemaker Sam Goldwyn famously said, “Give me a couple of years, and I’ll make that actress an overnight success.” It is the same with building ideas.
Myth 2: There Are Recipes for Successful Innovation.
Imagine that Steve Jobs could somehow return, as your guardian angel, advising you on what to do. Would that mean that your organization would suddenly develop huge innovations and become a market leader?
Not necessarily.
Of course, his advice could be helpful, but his recipe for success may not be your recipe for success.
The reasons are simple to understand. The industries Steve Jobs worked in are different from yours. His personality is different from yours. And the ingredients he had to cook with are different from yours.
The challenge is: we all like simple solutions, and we want to believe that there are recipes for success. In the world of innovation, there are thousands of “Gurus” and hundreds of thousands of “cookbooks” which claim to provide those recipes.
In this book, you will not find step-by-step recipes for successful innovation because, in my experience, they do not work. Instead, we will give you methods to combine ingredients in different ways to create something new. What you will learn are techniques that you can apply to your organization to encourage and foster innovation.
A few years ago, I received what I think is the most ingenious cookbook of all time; Culinary Artistry. There are a few recipes, but most of the book is built around ingredients. In the visual below you will see a sample of what can be done if you just have beets in your refrigerator. With this cookbook, you can cook with almost anything…
Myth 3: Innovation Is About Creativity, Not Systems.
Another deep-seated myth about innovation is that it is about creativity, and processes do not matter. It is a fundamental error; the companies that succeed at innovation invest in systems and processes that encourage, recognize, and implement innovation at every level. It is with systems and processes that we can turn a lump of coal into a diamond.
In J. D. Salinger’s book, The Catcher in the Rye, the character Holden Caulfield says, “It’s not too bad when the sun is out, but the sun only comes out when it feels like coming out.” No successful organization can afford to wait for the sun to come out; they must ensure that it is shining all the time. They do that by putting in place processes that make innovation part of business-as-usual, not something that must await a singular burst of inspiration.
Larry Keeley of Doblin, an innovation consultancy, has followed the creativity versus systems debate closely for decades and insists that the answer is clear: “Creativity is maybe 2% of the innovation process. It’s a vanishingly small component, and it’s the part you can acquire from outside the firm.”
Harold Sirkin, a consultant for the Boston Consulting Group, is even more emphatic, saying, “… firms have too many ideas and too much emphasis on creativity – more ideas merely choke the funnel even more.” The more ideas a firm comes up with, the more critical it is to decide very early which of them to kill to avoid heading down countless and costly dead ends.
Of course, creativity is an innovation element, but you must be systematic about how and where you look for this and what you do with it when you find it. In the pages that follow, you will learn how to create systems that will unleash the potential for innovation within your organization, not just occasionally when inspiration strikes but continuously.
The Ingredients of Innovation.
A colleague’s wife is among the best cooks I have ever met – possibly the best, and I include professionals in that statement. She loves to cook, and when a dinner invitation comes, it’s accepted without question. Recently at dinner, her main course was stunning, and I asked her what she called it. She then explained that when at dinner recently in a restaurant she had never tried before, she had a delicious chicken and chickpeas casserole.
The chef had not been forthcoming when asked what was in the sauce, but the taste had given her some ideas, and she was trying out variations on that sauce. “I didn’t have any chicken, so I tried this monkfish. And John really doesn’t care for chickpeas, so I’m trying this mix of three different kinds of beans.”
“But what did the recipe say?”
“I don’t often look at recipes. Methods are more important. If you know how monkfish responds to heat, and how different that response is from when you’re using chicken – and if you know how the proportion of herbs and spices you would use for chicken will change if it’s monkfish in the pot – that’s all you really need to know.”
That was an eye-opener. One of the best cooks I have ever met doesn’t follow recipes. But I believe that is probably true of most successful cooks. Instead, they use their knowledge of ingredients and preparation methods, cooking, and presentation to produce novel and appetizing dishes.
There is a lesson here for innovation. Recipes are prescriptive; they tell you in detail how to choose, prepare, combine, cook, and present ingredients to produce an acceptable meal. That can be helpful, but what you produce will be the same meal as everyone else who follows that recipe. Innovation is not prescriptive. It is about preparing, combining, and presenting ingredients in different ways to produce entirely new dishes. There cannot be a recipe for innovation because you are doing what no-one else has done before; otherwise, you are not innovating.
So, forget about recipes for successful innovation, as they probably won’t translate directly to the needs of your industry, you may not have all the ingredients the recipe calls for, and they will simply lead you down the same path as the other companies following the same recipe. Instead, this book is about understanding the theories and processes underpinning innovation and creating systems to make these work for you. Therefore, I will not give you a recipe; I will teach you to cook.
Start with the Ingredients You Already Have.
Even with limited ingredients available, you can still innovate. Pet Rocks was a product developed by Gary Dahl, a freelance advertising copywriter from Northern California. One evening in 1975, he was chatting with friends when the conversation turned to pets and how expensive they were to look after. “Not a problem for me,” said Dahl as a joke, “I have a pet rock…”
Everyone laughed, but later that evening, Dahl started thinking about it. With his background in advertising, he understood that marketing is the key to selling almost any product. Perhaps there was an opportunity to sell the ultimate, low-maintenance pet.
Over the next two weeks, Dahl wrote a thirty-two-page booklet, The Care and Training of Your Pet, which he filled with jokes, puns, and clever wording. He then bought a pile of rocks taken from Rosarito Beach in Mexico and packaged each rock in a cardboard box, which could also be used as a pet carrier (it even included breathing holes for the rock!).
By Christmas 1975, Dahl was selling more than 10,000 Pet Rocks each day. The Pet Rock craze did not last long – within six months, it was over, but Gary Dahl was then a multimillionaire.
Many people might think that Pet Rock was a big idea, but it was not. When asked about the unexpected success of Pet Rocks, he said: “I think the country was feeling sorry for itself. What I mean is that there was Vietnam and Watergate and the recession, and the country needed a laugh. So I packaged a four-dollar giggle in a box.”
Using his skills and experience in marketing and advertising, Dahl understood that he was not selling rocks at all; he was selling fun. The witty and irreverent manual was actually the core element of his product.
When he came up with the original notion for the Pet Rock, Dahl was creative. When he collected the rocks, designed the boxes, painted the rocks to suggest different rock characters, wrote the manual, and launched the product at the San Francisco Gift Show, he was innovating.
It is great to have a big idea, and sometimes that will work. But most successes are new ideas linked to things that have come before. They are in the area of what Steve Johnson called the “Adjacent Possible.”
Even when it appears to be exclusively the product of creativity, the most consistently successful innovation actually comes from recognizing small ideas and using available ingredients to grow them.
How Small Ideas Can Change an Organization.
While the story of Pet Rocks is interesting, most businesses are not based on a single big idea. Even in more complex organizations, new products almost always start with a small idea. Over time these simple ideas can grow to the point that they actually change the nature of the organization. Here are three examples:
Starbucks: Starbucks began as a small company selling high-quality coffee beans and equipment through a Seattle store. Only later did it start opening cafes and brewing coffee.
Amazon: Amazon began when Jeff Bezos started selling books by mail order from his two-bedroom house in Seattle in 1995. He intended to sell only books, but it rapidly became clear that he could use his new platform to sell just about anything.
Netflix: Netflix was launched in 1998 as an online DVD rental service. When DVD rental declined in the mid-2000s, the company switched to providing video on demand via the Internet.
All three of these companies have become internationally successful by adopting fundamental changes to their core business. In each case, it was the change that led directly to their success. Harnessing innovation allows organizations to identify such potential changes and to use them to grow and develop.
Successful organizations use innovation to identify potential changes in direction. A study of Inc. 500 companies shows that only around 15% are still in the business line in which they started.
Is there a change of direction that could turn your organization into the next Amazon, Netflix, or Starbucks? Only by building systems that allow you to identify, assess, and adopt innovation effectively will you ever be able to find out. Without systems, you may achieve random innovation success. With systems, you will be better positioned to grow small ideas into big ideas reliably, consistently, and repeatedly.
What Is Innovation?
There are hundreds if not thousands of definitions of innovation. Before we talk about succeeding at innovation, it is vital to have a clear definition. My favorite comes from another author, Doug Hall. He defines innovation as something meaningfully unique. He argues that innovation needs to provide value (some-thing meaningful) and do it in a new way (uniqueness). When something is meaningfully unique, customers notice the difference and are willing to pay more. As much as I like this definition, I believe the second, and often forgotten, part is the ability to capture this value created. Simply put, innovation is the ability to create value and capture value for you/your organization.
How to Succeed at Innovation.
Successful innovation comes not from focusing on creativity or big ideas but by making a system – a process – from innovation. The birth of good ideas is not random. That does not mean they never happen by accident because serendipity is a wonderful thing and something most of us would hate to lose in this world. But serendipity is not something any company can afford to wait for or count on to just appear at the right times.
A systemic approach has been proven to reduce risks and increase the speed of innovation. When you put your faith in systems, over time, you will find ways to build ideas. The biggest and perhaps most crucial reality is that successful, one-off big ideas are very rare. The most reliable way to generate successful innovation is to take small ideas and grow them over time.
I want to mention the common wisdom that accepting failure is an implicit part of the innovation process. Failures can undoubtedly be an important part of the learning process, and failures are often the only way to make clear decisions. However, at the risk of going against hundreds of articles, speeches, and studies, I would like to suggest that a focus on success is at least as important as a willingness to accept failure. Why? In our lives and business, what we focus on, we get. Here are five rules for success:
1.Accept that recipes are not enough.
You need to know how important ingredients are, but you also need to know what combinations of ingredients will produce your best results. How do you do that? Trial and error would be one description, though more sensitive managers might prefer to talk about iterative processes and A/B testing.
Whatever you call this process, it amounts to the same thing: work out a combination of ingredients you think would work for you and test them. Analyze the results. Are they positive? Can you do better? How? Now try that new combination and test it again.
2.Take the time to understand the basics of innovation.
Be prepared to discard or modify an idea if it does not give you the level of success you were hoping for, as your first idea may not be your best. Keep innovating. Communicate with your colleagues and employees, asking them what you are doing well, what you are doing badly, and how you could do better.
Forgo the concept (that so many seem to have) that innovation is a desperate race against time. Yes, a degree of urgency is essential – but the most important thing is to keep going, keep testing and refining until you get what you need.
When you arrive at the right result, go with it.
3.Use the ingredients you already have.
Ready – Set – Cook was the American version of a Television show that ran in many countries (and is still running in Italy). Members of the public would turn up with a bag of ingredients expecting a celebrity chef to turn them into a meal. There has probably never been a better example of what we mean when we talk about using the ingredients you have available and not relying on a recipe.
British celebrity chef Anthony Worrall-Thomson was presented with a bag containing, among other things, a coconut. We can only assume that the person who brought that bag along intended to present a challenge that Worrall-Thompson could not meet. The chef, known to be a little testy on occasion, looked more than a little disconcerted as he tapped the coconut on the counter.
It was reasonably clear that he would rather have been tapping it on the head of the individual who brought it. But he used it! He used the milk inside the coconut, and the white coconut flesh, mixing these with other ingredients to produce a meal that may not have been cordon bleu but was certainly edible. He then served the meal in the coconut shell.
The same principle applies to your organization. You already have ingredients available, including talent, product, and service. However, yours will be a very unusual company if any of these resources are being fully utilized. Before you start looking for additional ingredients, consider what else you can do with what you already have available.
4.Not enough ingredients? Buy or build some more.
You may discover that your list of ingredients is missing some essential elements. In that case, it may be a good idea to get some more. Unfortunately, there is no online or walk-in store where you can use your credit card to restock with innovation ingredients. Training and education are good ways to add to your existing ingredients and build what you already have into a successful innovatory business.
5.Build a learning focus.
Learning is intrinsic to successful innovation, and that means learning from failures as well as successes. Transformational products are a result of the systematic development of ideas. But this process is not just about creating new products, as one of the most important and valuable outcomes is learning. Every time you act, you gain information, you can then use it to inform your next action. This process of acting, learning, and using that learning to plan your next action forms an iterative learning cycle:
If you do not learn, you risk making the same mistakes, time, and time again. Innovation is about exploring the unknown, so there will be mistakes.
Creating a learning focus, where the importance of learning is recognized, and systems are put in place to capture that learning means that each step you take is informed by what you learned from the last step.
If you try to innovate without a learning focus, you are relying on luck. To approach innovation systematically, you must understand the importance of learning and use that to inform the development process.
Key Take-Aways
•Think in terms of systematically building up ideas and not searching for big ideas.
•There are no recipes for innovation success, but there are practices that will lead to success. The core of these practices is a commitment to building ideas over time.
•Creativity is great when it comes, but systems are the answer if you want to increase your odds of success.
Next Up: Understanding the three myths of innovation is important because it helps you avoid the most common mistakes. Now you know what not to do, it is time to start talking about what to do and why theory is vital to successful innovation.
CHAPTER 3: THE POWER OF THEORY: IF YOU WANT YOUR INNOVATION TO FLY, THEORY IS THE WIND BENEATH YOUR WINGS
Don’t just do it.
Flying into the Future.
Orville adjusted his goggles and settled himself more securely on the lower wing of the fragile biplane. The small engine popped and banged next to him, there was a strong smell of hot oil, and the twin propellers churned the air behind. He had done this more than a thousand times, yet each time there was a renewed flutter of nervous excitement. Perhaps, finally, this time, it would be different. Perhaps this time he really would fly over the low, sandy hills of North Carolina!
The theory of flight already had a long history, but no-one had been able to create a heavier-than-air craft capable of powered flight until that moment. The theory said that it should be possible, but most people assumed they would need a large and powerful engine. Instead, the airplane designers on the launch ramp in North Carolina had calculated that a lightweight engine producing only modest power coupled to efficient wings was the most likely solution to the problem of flight.
Orville Wright nodded to his brother Wilbur who released the weight which propelled the aircraft down the short launching ramp. It took off but began to settle towards the ground, just as it had done so many times before. Then, incredibly, the propellers bit into the chilly air, and the airplane lifted above the sandy earth and briefly pointed its nose upward. This time, it was different. This time the Wright Flyer really did fly. On a December morning in 1903, innovation changed the world when the Wright brothers became the first humans to achieve sustained, powered flight.
What is especially notable about one of the most significant innovations in human history is that the Wright Brothers’ work involved no leaps of intuition or sudden inspiration. Starting with an existing theory, the brothers systematically tested every aspect of it with their flying machine and then methodically refined and improved it.
The story of the Wright Flyer neatly encapsulates the power of theory. Theory can lead us in entirely new directions. Still, to become a practical reality, it must be harnessed to a process designed to test and improve to deliver tangible results.
Theory Is the Foundation for Active Learning.
The previous chapter explained how to avoid the three main innovation myths. This chapter sets out how you can begin the process of making innovation work for you. Like the last chapter, this is not just an idea; it is practical advice based on my experience and the outcome of a great deal of research. Avoiding the wrong route is important but identifying the right route for you is critical. For this reason, the theory is important in successful innovation.
When you are beginning something new, one of the problems is identifying where to start. I strongly believe, and the evidence of successful entrepreneurs agree that the right place to start is with a hunch. A hunch comes from your knowledge and experience, and hunches are essentially mini-theories.
However, theory alone will not build a new product. To do that, you need to test, develop, and refine your theory through action. A theory that is never tested through action is just a daydream. Action is what makes things happen and what helps us learn, but at the same time, action without the guidance of theory will most likely produce little more than wasted effort. Theory applied in business is not abstract and academic; theory is the essential starting point for productive action.
Successful innovation begins with a theory and then implements and tests this practically. It leads to active learning, where knowledge gained is used to move the process to the next stage.
There may be several available theories, and testing will establish which is most appropriate. In the Wright Brothers case, their work rejected the theory that a successful flying machine would require flapping wings. The brothers focused on one theory of flight and used experimentation and testing to refine their machine based on this theory. The Wright Flyer is the embodiment of active learning – at each stage of testing, they learned a little more about flight, the control of an airplane, and each new prototype featured improvements produced by this active learning.
It translates directly to business innovation. Use theory to predict what may happen if you follow a particular course of action, and this is how you test theories over time. Some may be rejected as a result of this testing. Others will be proven to be viable, and through prototyping, you develop a practical application of the theory. This process can be described in the following way:
When I do X, Y will happen.
Result of testing:
Confirmation –
theory strengthened.
Partially true –
look for revisions.
Not true –
look for new theories.
A good theory provides direction and opportunities to learn. Learning is the foundation of almost all innovation.
Don’t Just Do It!
Many businesses, keen to ship a new product, do not want to spend time thinking about and developing theories first. Instead, they want to move straight to offering something novel as quickly as possible. I call this the “Just Do It!” school of entrepreneurship after Nike’s famous slogan.
Any organization that says, “let’s just ship a product and see what happens,” will quickly discover that this approach has some inherent flaws. Most notably, if the project’s objective is only to see what happens, something will always happen! However, because the project will lack the underpinning foundation of theory, it will not deliver what Eric Ries, author of The Lean Startup, calls validated learning. Following the Just Do It! approach might deliver sales success, but you will not learn why this happened or how you can improve or refine for future success.
Speed is certainly an essential element of successful innovation but adopting the Just Do It! approach turns innovation into a lottery – you may be lucky or may not, but what you will not do is learn why you failed or succeeded.
Learning is the true measure of progress in any organization interested in innovation. Learning means that you understand what happens and why it happens, which is a key element in successful innovation.
What Is a Theory?
Before we go too much further, it is probably a good idea to pause for a moment to describe precisely what we mean by theory.
In simple terms, a theory says, If I do “X,” I believe that “Y” will happen. It is a way of predicting the outcome of planned actions even when these are new and untried. All theories can be proved (or disproved) by testing and experimentation.
The primary characteristics of a theory are:
Theories are conceptual, based on prediction using mental concepts.
Theories are based on models, using available data to support predictions.
Theories provide a robust way to understand planned changes’ effect and impact, even where actual data is limited.
Theories are as simple as possible.
Theory is essential in business, as all management and innovation practices are based on predicting the future. Managers must develop and test theories in the same way that scientists do. By building on historical theories, we can create new, improved theories for the future.
Let us now discuss a few main characteristics of theory.
Theory provides a structure on which to build. Imagine an empty plot. Imagine that you must build a house on that plot, but you do not have a detailed plan.
In these circumstances, the completed house is unlikely to be satisfactory. Building the basement without understanding what the ground floor should look like is sure to present a whole set of unforeseen problems that will result in extra work.
Trying to implement innovation without an underpinning theory is like trying to build that house without a plan. Theory provides the unifying foundation, which ensures that you do not waste effort on research, that is not directly related to your intended end-result. Theory helps to direct your efforts and resources to ensure that you deliver the innovation you need as effectively as possible.
A good theory is the “first-principles” truth you can build on.
Theory helps us to predict what may happen in the future. Reliable prediction is an essential element of effective management. Theories help to accurately predict what may happen if we implement changes to business processes, products, or systems. Theories help us evaluate potential innovation. In the words of my favorite author on innovation:
“The best way to make accurate sense of the present, and the best way to look into the future, is through the lens of theory.”
CLAYTON CHRISTENSEN, SEEING WHAT’S NEXT
Theory allows us to move beyond current data and observations and to explore the potential consequences of innovation.
However, a theory must not be treated as dogma, fixed, and unchanging. The ability of a theory to provide reliable prediction must be subject to ongoing, systematic empirical testing. If the theory provides accurate prediction, it may be refined and improved. If it does not, the theory must be revised or even discarded entirely.
Knowledge and understanding come from the learning involved in the development and testing of theories. It may involve an appreciation of what will work or perhaps a recognition of what will not. Both are equally valuable, and successful innovation comes directly from the learning which emerges from the practical application of tested and refined theories.
The Power of Theory Lets You Invent Like Edison.
Many people associate innovation with genius and leaps of intuitive reasoning made by people of extraordinary natural ability. Albert Einstein and Leonardo Da Vinci are often cited as examples of individuals who appear capable of making such great leaps of knowledge; however, true genius is extremely rare. Most innovation comes not from a single major paradigm shift but as the culmination of several smaller, iterative improvements.
Neither Orville nor Wilbur Wright woke up one morning and suddenly said, “Hey, I think I know how to build an airplane!” Instead, they methodically refined and improved a basic design based on an existing theory over several years. That is how most successful innovation works.
Fortunately, an effective innovator does not have to be a genius. One of the most consistently successful innovators was an American inventor named Thomas Alva Edison. Edison submitted more than one thousand original patents in the United States and more than five hundred worldwide. How did he do that?
The answer is that he created the world’s first industrial research laboratory where a team of researchers relentlessly investigated theories by testing and experimentation. The establishment of what became known as the “invention factory” in Menlo Park, New Jersey, led to Edison’s name becoming popularly known as “The Wizard of Menlo Park”.
However, the truth is that there wasn’t any magic involved in the facility, which generated a new patent, on average, every twenty days. Edison employed top scientists at Menlo Park continually developing new theories and testing existing ones that were either refined or discarded. Prototypes were created, tested, and improved. Innovation emerged from this process not by happenstance but as a planned output from this unique and first of its kind facility.
Many modern research and development facilities follow the lead established by Edison at Menlo Park. However, even if your organization does not have dedicated R&D facilities, by effectively using the facilities and resources available, you, too, can harness the power of theory to turn your business into an innovation factory.
Understanding Theory Is About Learning How To Think, Not Being Told What To Think.
Theories tend to be unique to organizations and the circumstances of the period in which they operate. For this reason, you cannot take a theory that works for one company at a particular time and expect it to work in another company at a different time.
Instead, theories provide a way of understanding problems and framing possible solutions by predicting what may happen in the future. No theory is right or wrong; it either provides an accurate prediction, or it does not. No theory lasts forever; customer expectations, competition, and available technology all change over time; therefore, theories must change too or become obsolete and ineffective.
In terms of innovation, there are no one-size-fits-all theories that work for every organization. However, some general approaches consistently produce good results, and we will talk about these later in this chapter. Instead, successful innovators must understand how to develop and test theories that are specific and unique to their organization and circumstances.
How To Build a Theory.
There are three steps to building a theory:
Make a hypothesis.
Test it.
Check if it produces the expected results.
Every theory begins with a hypothesis, a supposition made based on available evidence as a starting point for further testing. It will take the form of “If we do X, then Y will happen.”
Next, the theory is tested. When X is done, is the result Y as expected? Testing is essential in confirming that the original theory was correct and checking whether the underlying assumptions are also correct.
Any theory is based not just upon what happens but also on why it happens. You cannot reliably make your predictions if you do not understand why things happen. When testing a theory, sometimes the outcome is not entirely as predicted. These must be investigated to determine whether the original theory or the assumptions on which it was based, are incorrect or incomplete.
In this way, organizations use theories to learn about what may happen in the future and their existing systems and processes. Learning organizations can adapt to changing circumstances that are profoundly beneficial in today’s rapidly changing business environment.
Theories for Innovation.
How can you create theories that will facilitate innovation in your organization? You will find no shortage of experts to tell you what to do, but the sheer number of different approaches is bewildering. At the last count, there were more than seventy thousand books on innovation on Amazon alone. On LinkedIn, there are over one million “innovation consultants”.
Of course, you could read all the available literature and scholarly articles to decide what works for you, but there is another way. I have tested different theories with over four hundred organizations over a period of several years. I reviewed hundreds of academic articles (you will find a list in this book’s Further Reading section). I also conducted person-to-person interviews to validate questions and to test our hypotheses.
That work provides the foundation for this book. Nothing here is presented without backed-up evidence supported by years of experience. One of the most important things we have discovered is that four theories are consistently providing the best innovation results within a wide range of companies. These are:
What you need to know
The theory
Big ideas are grown.
If you want to end up with big ideas, you must begin by growing small ideas.
Winning companies have improvement habits.
If you can embed improvement habits in your organization, you will be able to grow bigger and better ideas.
Effective speed and effect make a world of difference.
If you cultivate a sense of urgency and a culture of speed, you will grow ideas faster and more effectively.
The ABCS are the fundamentals of innovation.
If you want to succeed at innovation, you need a proven method to follow. The ABCS provide a powerful, proven, step-by-step method to ensure successful innovation.
Let’s look at these in order and see why these theories consistently deliver positive results.
Big ideas are grown. As discussed in the last chapter, one of the three most believed myths about innovation is that it is about big ideas that emerge overnight. The reality is that the most successful innovations are grown over time by developing theories and their methodical testing and ongoing learning.
For example, America’s most beloved chocolate, Hershey’s, resulted from a collaboration between three companies and the outcome of years of experimentation and learning about market needs. Until 1903, chocolate was a luxury only the rich could afford. However, all changed when Milton Hershey set up his Experimental Plant in the town of Hershey, PA. After years of experimenting with milk, sugar, and the cacao bean, Milton Hershey finally succeeded in making chocolate affordable for all.
Before establishing Hershey’s, Milton Hershey had already failed at a candy shop in Philadelphia and a caramel business in New York. His success came after thirteen consistent years of failure. However, along the way, Hershey learned about what did and did not work in the field of chocolates and used this learning to finally produce a hugely popular product.
It is just one example that shows how the notion of overnight success held by so many people is entirely wrong. Big ideas are rarely born in an instant; they are almost always grown over time. Theory is an essential part of growing ideas and learning from that process.
Winning companies have improvement habits. Dr. Edward Deming created a famous list of the fourteen points every management system should strive for, and the first point, and perhaps the most crucial, was the constancy of purpose.
As Deming put it, “Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.” It is a prerequisite to building and maintaining an innovation system.
The constancy of purpose refers to looking towards the future with the full expectation of and preparation for success. Management looks after its employees, while it is the employees’ responsibility to improve the products being offered to consumers. Everyone in the company has the same purpose; make a profit and maintain an advantage in the market through improvement.
James Dyson built exactly 5,127 prototypes before building an effective vacuum cleaner that did not clog and did not need a bag. Each prototype was incrementally better than the last. It takes long-term improvement habits and mindset to create a revolutionary product. Dyson used this approach to innovate a new product and successfully compete with the market leaders at that time; Hoover and Electrolux.
Successful companies make improvement and innovation part of the everyday ethos of their business.
Effective speed and effort make a world of difference. Theory provides the essential underpinning to innovation, but that does not mean that you should spend unlimited time developing theories. Speed and agility are also crucial aspects of any successful innovation system. There is no point in spending months developing and testing theories only to discover that your competitor got there first. Likewise, if something entirely new becomes apparent during testing a theory, you must be ready and able to change direction quickly.
Research done by Siegfried Streufert and others proves that a sense of urgency is linked to better managerial performance in companies. Our own experience backs this as our research classified companies by their level of innovation success ranking by percentiles. On average, large companies (>1,000 employees) focused on speed scored in the 72nd percentile while companies with speed issues scored in the 24th percentile.
Zara is one of the most well-known retail clothing stores in the world. It provides affordable clothing that looks as though it is straight off the runway at a fashion show. The reason for this is that it usually is straight off the runway.
Zara employs a business model that prioritizes speed, which is why their time from runway to store is very short. They also use a “Just in time production” strategy to avoid overproduction and a tight synergy between business strategy and operational processes.
For Zara, part of the secret to their success is the speed at which they bring new and innovative products to the market. For most organizations, speed is an essential element of successful innovation.
The ABCS are the fundamentals of innovation and this book is based around the ABCS of innovation. It is an approach that will help you build ideas into theories and theories into real-life products. We will cover the ABCS in more detail later, but for the moment, I want to introduce the overall approach:
A
is for
Alignment
. If innovation is to succeed, everyone in the company must be thinking and working together towards a common goal.
B
is for
Build
. Ideas are built, and these can be ideas for new products, processes, or systems.
C
is for
Communicate
and
Check
. If you are going to grow your ideas successfully, you must communicate what you are trying to do and why. When you are testing theories, you will constantly check that you are achieving what you have set out to do.
S
is for
Systematically Improve
. Successful innovation is not random or subject to chance. It is the result of a methodical process of identifying, evaluating, implementing, and testing. This process of systematic improvement must become embedded in every level of the company’s ethos and operations.
In the systems chapter of this book, we’ll explain that a system is the product of its parts. If a systems’ results were the sum of its parts, getting three out of four things right would be fine. But, the reality in most systems (including innovation systems), the success of a system is driven by its weakest link, meaning if you get one thing wrong, the whole system can fail.
Align
Build
Check
System
Results
✓
✓
✓
✓
Bigger ideas, faster at lower risk
X
✓
✓
✓
Chaos, wasted energy
✓
X
✓
✓
Weak ideas, small improvement
✓
✓
X
✓
Resources wasted on bad ideas
✓
✓
✓
X
Small wins, no big improvement
The ABCS is the logical, sequential parts of a process. An innovation leader’s job is to identify which stage the organization has reached and either improve the work done or move to the next stage quickly and efficiently.
By systematically and methodically following the process defined by the ABCS, you optimize your chances of innovation success.
Developing Innovation Theories that Work for You.
You should now understand why theory is an essential element in any successful innovation system. You should also understand the four general approaches that will enable you to make innovation work within your organization.
You may feel that it is now time to turn to a consultant to find your organization’s perfect theory. However, please be aware that there is a significant difference between general approaches and specific theories for your company. As covered in the last chapter, innovation is a lot like cooking. The same ingredients can create a good or bad dish, and the same recipe will never turn out exactly the same for everyone.
Innovation success comes not from slavishly following someone else’s recipe but from understanding what ingredients are available to you (and which may be missing) and how each reacts within your organization. Successful innovation is about using an innovation culture to generate good ideas and then learn from this to translate these into theories and practical solutions in your organization. In this book, we will show you how.
Key Take-Aways
•Theory provides a direction and focus for action – the only way to move forward is to take action, but action needs to be informed by theory to avoid wasted effort.
•Theory without action leads nowhere
