Jeff Standridge (Intro):
Are you ready to change the trajectory of your business and see massive improvements? Each week we’ll share strategies and practices to generate sustained results and long-lasting success in your organization. Welcome to the Innovation Junkies podcast.
Jeff Standridge:
Hey, guys, Jeff Standard’s here, and welcome to another episode of the Innovation Junkies podcast. Great to be with you today.
Jeff Amerine:
Hey, it’s good to be back. Jeff, how are you?
Jeff Standridge:
Man, I’m super, super, super. And I’m excited about what we’re going to start moving into now to talk about for the next couple of episodes.
Jeff Amerine:
We’re going to hit innovation pretty hard.
Jeff Standridge:
We are. You know, we’ve been talking about the six domains of strategic growth that are part of the strategic growth diagnostic. We talked about revenue velocity, the first one, which is basically the strength and effectiveness of your sales, marketing, and messaging efforts. Then we talked about organizational effectiveness, the degree to which you have a plan to achieve sustained strategic growth. Then we had a few episodes on operational effectiveness. How are you at getting your products and services delivered to your clients and measuring the effectiveness of those products and services. Then we moved into leadership effectiveness. We talked about the climate that you generate that you create, the type of workplace that you have, and how you leverage different elements of leadership to actually drive uncommon results in your organization. Now we’re moving into innovation readiness, and we’re going to start by just probably this episode will focus on just kind of innovation at a high level. How does that sound?
Jeff Amerine:
Now, that sounds great. I think it’s appropriate and timely for sure.
Jeff Standridge:
So, you know, we were in a presentation yesterday, Jeff, where we actually talked about our definition of innovation. And I’d like to just maybe use that as the starting point that as we approach innovation in our practice with our clients plan, we define innovation as a plan to change. And that plan change is synonymous with ideation, invention, or creativity. So it’s planned ideation, planned invention, and planned creativity that’s directed toward more pleasant, more effective, or more efficient ways of doing things or that’s directed towards substantially reducing the transaction costs of doing that business. So that’s kind of the way we look at innovation. What do you think about that?
Jeff Amerine:
No, I think it’s definitely important, and one of the other things that is tied to that is sort of the type of innovation we’re thinking about in terms of whether it’s incremental, whether it’s breakthrough, or whether it’s disruptive. Go a little bit deeper into those three areas.
Jeff Standridge:
Yeah, you know, so incremental innovation is probably the one that is most widely known because it’s pretty much synonymous with continuous quality improvement, continuous improvement, or what have you. So it’s where we make changes, planned changes, so to speak, that enable small improvements or extensions to existing products, or services, or processes. And over time, they may be transformational, but certainly, at the outset, they’re incremental. So we use the example of Gillette or Coca-Cola. You know, we had Coca-Cola for years, then we had New Coke, then we had Coke Classic, then we had vanilla Coke and Coke, lime and Coke light and Diet Coke, and what have you. Gillette started out with a really good razor. Then they came out with the disposable razor, then the disposable razor with two blades, and then one with three blades, and then one with three blades and an aloe vera strip across the top. And so incremental improvements that effectively changed the game for an organization.
And then, we talk about breakthrough innovation. That’s where you have a new technology that’s being applied to an existing business model. And so iPhone is what comes to mind there. You know, we had cell phones in existence for a number of years before 2007, but it was in 2007 that Apple released the smartphone, the iPhone, using a traditional or a preexisting business model. They just infused into it a new technology, and it changed the world. And so, you can use new technology with an existing business model, or you may use a new business model with existing technology. So as we said a few moments ago, Gillette’s been around for years, but Dollar Shave Club took the razor, the razor blade, the towel, and those kinds of things and put it into a regular subscription business model. So that’s breakthrough innovation.
And then, you can have disruptive innovation, which results in an entirely new product offering, new product, new service, or new process to address, at least at this point, unmet needs in the market or in a company. It usually creates new markets and usually disrupts or replaces existing markets. So probably the prototypical example there is video streaming services Netflix, Amazon, Prime, Hulu, Roku, and what have you. Wholemeal delivery services like that. That’s, to some degree, replacing pizza delivery. But this whole fresh delivery like Hello Fresh, Home Chef, and some of those kinds of things, and then I guess Uber is a unique example because it took an existing technology, i.e., the taxi cab, and it really overlaid a new business model though at it at its start was a breakthrough innovation. But it has become so prolific that it has resulted in it becoming probably more of a disruptive innovation nowadays.
Jeff Amerine:
Yeah. And I think that so I think it’s understanding what innovation is, understanding the categories of innovation helps you. Then when you get to the next part of it, of what are some other elements that are kind of tied to success. If you want to actually be an innovative organization, and some of the things that we think about and see all the time that we emphasize is the innovation, the leadership, and culture are tied together very closely.
And those things, those things are integral to being tied to a strategic plan. Innovation can’t be this kind of separate thing. It needs to be part of the overall strategic plan that the company and all the resources are working towards.
Jeff Standridge:
Yeah, you know, and so we talk about that plan to change, right? Innovation outside of a plan is kind of just chaos. Right. And how many times have we talked about it before. We’ve lamented the fact that we’ve been in organizations where change erupts because someone has an idea, right? And they begin running, you know, headstrong toward the implementation of this idea, only to have it falter after three, six, 12, 18 months because it really didn’t fit within the context of any planned outcomes for the organization.
Jeff Amerine:
Exactly. Exactly. You know, as entrepreneurs, particularly early-stage entrepreneurs, occasionally you get stuck in this idea of a shiny object that can be very threatening to the overall good of the organization. There’s kind of historically always this rub between innovation, regardless of what type of innovation it is, and organizational effectiveness serving existing customers. So it’s got to be, it’s got to be part of the strategic plan, it’s got to be part of the culture. We’ve already defined it. There also has to be this willingness and understanding that a big part of innovation is there will be incremental failures, there will be failures along the way. So being able to understand those risks and to accept them and also being able to have a tool kit like what we offer in our innovation approach and our innovation methodology that makes sure that the risk in the failures that you experience are not super costly. They happen early, and they happen before you commit lots of resources and capital to a particular project. All that is really important. The other, you know.
Jeff Standridge:
We hop in there, and we take the steps on the front end to protect, to mitigate risk where we can. That’s right. We’re not going to mitigate all the risk. But then also that we reward failures. We reward actually taking the chance or taking the risk. Rewarding the ideas. So, Astro Teller, I believe it was at Google Labs, you know, he, I believe, I was reading a book where they talked about his approach to innovation is that the day your project gets accepted or your innovation or idea gets accepted or that and the day that your product or innovation or invention gets killed, both of those are days of celebration because it means you got to a point where you made a definitive decision to either fund the new idea or kill the new idea. And both of those are a success.
Jeff Amerine:
Yeah, and that’s really counterintuitive if, to most people, that has not been built into our overall culture as a society or in the more corporate cultures. It’s important. That’s really important. And I would say it’s also important to have good measures, key performance indicators, and to do some storytelling. We’ve been involved in innovation processes in organizations where internal and external PR is not something that they want to do or they’re really good at, and it’s to their own detriment. Even if there’s lots of innovative stuff going on, and nobody knows about it, you’re not going to get the rallying of the crowd, rallying your customers, stakeholders, or even your team members around it. So you can’t keep it a secret. You’ve got to make sure you kind of make a big deal of it, and you tell the stories both the good, bad, and ugly stories of the process because there’s something to be learned from all of that.
Jeff Standridge:
Yeah, I would agree. I would agree with that completely. You know, I was just thinking about how, you know, as we talk to organizations about innovation and about implementing a new innovation program, we’ve had to be very direct on the front end to say, hey, we need to understand, is this something that you’re willing to get behind and promote internally, particularly at the very least internally, because you want all good minds to come to the table with innovation and if there’s this vision of grandeur for an innovation program, but there’s no plan to do internal PR marketing and promotion, then it’s probably not going to get off the ground or stay off the ground anyway.
Jeff Amerine:
You gotta have that behavior change, right? Particularly if it’s something you’re going to implement internally or with your customers, it’s just as important in rolling out the innovation as telling why it’s important and having the behavior change go right along with it. The other thing is, you know, getting by and is something we’re just talking about, their team member performance really needs to be tied to innovation.
We’ve also seen situations where, okay, we’re going to be innovative, and people already have their MBOE managed by objectives, whatever however they’re measured. And it’s one more thing that they’re not actually B being rated on that they’re asked to do. So, where does that going to fall on their priority list? You know, if it doesn’t impact their promotion or their pay structure or bonuses or any accolades they would get, they’re not going to be highly incentivized to act on it. And so, having team member performance tied to the innovation is very important also.
Jeff Standridge:
Yeah, I completely agree with that. You know, in any organization where we are helping them create or implement a new innovation program, it really has to be almost two initiatives occurring in tandem or simultaneously. You’ve got your innovation program that’s happening, that’s perhaps why they engage us to do that, but you also have to have an eye toward a transformation of the organization.
Organizational change in organizational transformation, you know, in some of the tenets of that, you’ve got to have clarity and focus as to what you’re trying to accomplish. You’ve got to have strong leadership. You have to have engaged and committed team members, etc., and 100% accountability. So forgetting to include or forgetting to consider the fact that if you’re building a sustained innovation program that endures beyond the people who launched it, you have to move the organization along with it, and so that’s a real critical part.
Jeff Amerine:
It is. It is. And if you do all the things that we’ve just been discussing, you avoid one of the greatest pitfalls that we’ve seen occur. And sometimes it’s with mid-level leaders or somewhat senior-level leaders, and we call that innovation theater. They know they need to be innovative, they want to be innovative. They’ve been funded to be innovative, and so they go through the motions of trying to be innovative, but they don’t do all the other things. We just talked about it. It’s not tied to the strategic plan. They haven’t really defined what type of innovation they’re chasing. They don’t have a culture that rewards risk. They’re not recognizing the successes and the failures as part of the process. They don’t have good measures. They’re not telling the story, and they don’t have team performance tied to it. And then it becomes innovation theater. We did something, you know, we created some power plant, light slides. We talked about it at the annual meeting, but it really didn’t change the competitive positioning of the company or any other strategic metric you’d typically look at. And that’s why we really want companies to avoid playing that innovation theater game.
Jeff Standridge:
That’s right. So if you’re thinking about implementing an innovation program in your organization, some of the things to think about, we’ve just talked about, we’re going to next move into a couple more episodes talking about the various stages of innovation. So this has been another episode of the Innovation Junkies podcast. Thank you for joining.
Jeff Amerine:
See you next time.
Jeff Amerine (Outro):
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