By Mark Phillips
July 7, 2011
Innovation is imperative. It is the most reliable source of growth in a mature economy. Low cost and high quality can only get you so far when there is someone in the world who can do it cheaper.
It differentiates one product or service from everything else that’s on the market. It can be an endless money pit.
Traditionally, companies have invested in innovation in the same way they manufacture products. They ask for a list of potential innovations, select a few, assign a project manager to the project, plan it, put time and money into the “innovative” project, execute and see if the results stick. It sounds good, but it doesn’t work. It ends up creating products that nobody wants. Worse it demoralizes the team that worked on it and the people who backed the project. A stigma starts to grow around “innovative” projects, luring in only the unsuspecting and naïve, pushing their budgets to the fringes of a corporation.
This is no-way to grow. The best and brightest will move to other parts of the company, parts with more stable career paths. Or, they’ll move to another company altogether. Innovation will walk out the door.
It’s no wonder this approach doesn’t work. Innovation is the creation of something new. It is high-risk, uncertain and strange looking. The traditional approach tries to control risk and uncertainty. It constrains innovation. It puts creativity in the same box as manufacturing: pick what you want to make, engineer a production line, manage the line and out comes innovation.
Innovation, though, can’t be manufactured. It is wilder than that. It can’t be measured by a project being on time, on budget or meeting requirements. It can’t be gauged by the ROI of one project. These are the wrong factors to measure or control if you want to be innovative. A quick check against these variables brings the point home.
Budget doesn’t drive innovation. If so, the wealthiest companies would be the most innovative. Microsoft, for example, would lead the world in mobile phones. Exxon-Mobile would lead in profitable alternative fuels.