Innovation and Large Enterprises – Part I: Innovation based on existing product lines
Part I: Innovation based on existing product lines
Innovation in large enterprises (companies) is a very difficult task. Large enterprises have become successful because they do what they do very well. This means they are focused and have a strong ‘delivery mindset.’ Employees at large enterprises, particularly those involved in building, operating, servicing and selling the products are rewarded based on delivery accuracy and for delivering more of the same product. So, when you roam the hallways of HP, Intel, Microsoft, Oracle, SAP and many other companies, you see 99% of the activity if not 100%, focused on ‘delivery.’ This also applies to much smaller companies and the delivery mindset if what we have perfected over time. At a startup, you find the discussions more around ‘what-if’ we could this, or ‘what-if’ the product worked that way, or ‘hey, why don’t we try it out with our customers and see what they think?!’ Different dialogs in different places. However, to succeed we need to have the latter dialog in all companies, independent of size, to change our mindset effectively from delivery to innovation.
To explore this critical topic of Innovation in enterprises, I would to distribute our discussion into a 3 part series of blog posts:
- Part I: Type 1: Based on existing product lines
- Part II: Type 2: Acquisition and Investment Based innovation
- Part III: Type 3: Brand new innovation/Product lines
As many of you know, I spend the majority of my time working with enterprises who have anywhere from 500 people to 250,000 employees, as well as with startups. My focus is disruption in order to bring about innovation, and to promote far more innovation that we are seeing today in enterprises. Many of these topics are discussed in ProVoke and also formalized in the ProVoke Methodology for disruption and innovation.
Part I: Type 1: Innovating based on existing product lines:
Several times a day I hear the following from brilliant engineers globally “I am an engineer, not an entrepreneur. I don’t think in terms of ‘innovation’ rather I want to make sure we meet the delivery timelines!.” And, many times a day, I stop to remind these fantastic engineers, that when they develop, they are innovating. Not every innovation is Facebook or Square, rather innovation is happening every minute across thousands of companies are various levels and extents. New features on an existing product line, new services based on an existing product line, evolving an existing product line are one of many examples of the first type of innovation at enterprises. However, what we are generally lacking is the ‘innovation mindset’. The conscious awareness and inspiration that every time we write code, enable a service to work that we are enabling something that was not possible to be possible. That is innovation. If frustrates me to see engineers not embrace this attribute! We hire extremely talented people to do really tough tasks. In essence, this is about taking responsibility and owning the ‘innovation capacity’ which we all have. Yes, we need to disrupt to innovate and experiment to innovate. The innovation mindset applies to all parties within a company. Operations can think boldly and differently about innovation and supporting operations. Product development can become more ‘proactive’ in introducing products and delighting customers rather than reacting to customer demands. Sales can start having innovation based discussions with customers to help customers see possibilities, instead of selling more of the same thing (changing “quota-mindset” to “innovation-based quota” mindset).
The shift from a delivery to innovation mindset is a corporate mindset and can not just be driving by one group or one individual. See my blog on CIO (Chief Innovation Officer). There needs to be integrated top-down, bottom-up and center forward momentum to move innovation forward and degrees of freedom to freely about innovation possibilities. So, if nothing else, we can certainly look at any existing product lines and hugely innovate around that product or service. Let’s take the example of Blackberry: If the company had had an innovation mindset, imagine the extent of innovation that could have been offered via RIM to the millions of extremely loyal users. Instead, because it continues to push the same product and not innovate it is no longer in business. In ProVoke, I talk about other examples including leading companies such as Kodak, Xerox, Motorola and much more. Why did Fedex and UPS thrive when the US Postal Service is in such dire straits? What I see every day confirms the fact that it is NOT about these organization not having hugely talented and educated staff and innovators, it is because culture is anti-innovation because of fear of losing revenue and marketshare. The discussion of disruption brings discomfort, which is exactly what we need to start the dialog. And of course, we don’t abandon delivery or revenue, we start to actively deliver and innovate. So, think about it, companies like Xerox, Kodak and Motorola, have IP in the billions of dollars. Hence fact is that they have extremely high innovation capacity, but then also think about this: Why are these companies dying and becoming extinct? Another example, Microsoft resisted effectively introducing Azure to the market out of fear of loosing Windows and Outlook product revenue. Now trying to catch up with Amazon, who changed the world with EC2! Why did not Microsoft innovate earlier? Classic case of delivery mindset to protect revenues. And, when the resistant-innovators finally do agree to play, they may not always succeed as they are too late to the game. When Blackberry, out of desperation last year introduced its tablet, it did not help the company at all. It became a desperate “me-too” innovation attempt.
Yes, while “me-too” today seems to drive much innovation, we all know that it works and fails given different circumstances. In summary, innovation can always happen based on existing product lines and does not have to be a radical new idea. It requires that we be bold and bring different perspectives into our consideration, and that we encourage our staff and ourselves to think with an innovation mindset. This means a bit more risk with much higher rewards. Methodologies to streamline this process are key but more than anything it is around changing the culture, to the Culture of Disruption and Innovation. We will be bringing the other parts of the puzzle in the next 2 parts.
Would love to hear your thoughts!
Picked up a copy of Provoke yet? You can find it on Amazon. All my best,