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Greg Satell
June 21, 2017
One of the best innovation stories I ve ever heard came to me from a senior
executive at a leading tech firm. Apparently, his company had won a
million-dollar contract to design a sensor that could detect pollutants at very
small concentrations underwater. It was an unusually complex problem, so the
firm set up a team of crack microchip designers, and they started putting their
heads together.
About 45 minutes into their first working session, the marine biologist
assigned to their team walked in with a bag of clams and set them on the table.
Seeing the confused looks of the chip designers, he explained that clams can
detect pollutants at just a few parts per million, and when that happens, they
open their shells.
As it turned out, they didn t really need a fancy chip to detect pollutants
just a simple one that could alert the system to clams opening their shells.
They saved $999,000 and ate the clams for dinner, the executive told me.
That, in essence, is the value of open innovation. When you have a really tough
problem, it often helps to expand skill domains beyond specialists in a single
field. Many believe it is just these kinds of unlikely combinations that are
key to coming up with breakthroughs. In fact, a study analyzing 17.9 million
scientific papers found that the most highly cited work tended to be mostly
rooted within a traditional field, with just a smidgen of insight taken from
some unconventional place.
But what if the task had been simply to make a chip that was 30% more
efficient? In that case, a marine biologist dropping clams on the table would
have been nothing more than a distraction. Or, what if the company needed to
identify a new business model? Or what if as is the case today current chip
technology is nearing its theoretical limits, and a completely new architecture
needs to be dreamed up?
In researching my book, Mapping Innovation, I found that every innovation
strategy fails eventually, because innovation is, at its core, about solving
problems and there are as many ways to innovate as there are types of
problems to solve. There is no one true path to innovation.
Yet all too often, organizations act as if there is. They lock themselves into
one type of strategy and say, This is how we innovate. It works for a while,
but eventually it catches up with them. They find themselves locked into a set
of solutions that don t fit the problems they need to solve. Essentially, they
become square-peg companies in a round-hole world and lose relevance.
We need to start treating innovation like other business disciplines as a set
of tools that are designed to accomplish specific objectives. Just as we wouldn
t rely on a single marketing tactic or a single source of financing for the
entire life of an organization, we need to build up a portfolio of innovation
strategies designed for specific tasks.
It was with this in mind that I created the Innovation Matrix to help leaders
identify the right type of strategy to solve a problem, by asking two
questions: How well can we define the problem? and How well can we define the
skill domain(s) needed to solve it?
W170608_SATELL_FOURTYPES
Sustaining innovation. Most innovation happens here, because most of the time
we are seeking to get better at what we re already doing. We want to improve
existing capabilities in existing markets, and we have a pretty clear idea of
what problems need to be solved and what skill domains are required to solve
them.
For these types of problems, conventional strategies like strategic
roadmapping, traditional R&D labs, and using acquisitions to bring new
resources and skill sets into the organization are usually effective. Design
thinking methods, such as those championed by David Kelley, founder of the
design firm IDEO and Stanford s d.school, can also be enormously helpful if
both the problem and the skills needed to solve it are well understood.
Breakthrough innovation. Sometimes, as was the case with the example of
detecting pollutants underwater, we run into a well-defined problem that s just
devilishly hard to solve. In cases like these, we need to explore
unconventional skill domains, such as adding a marine biologist to a team of
chip designers. Open innovation strategies can be highly effective in this
regard, because they help to expose the problem to diverse skill domains.
As Thomas Kuhn explained in the The Structure of Scientific Revolutions, we
advance in specific fields by creating paradigms, which sometimes can make it
very difficult to solve a problem within the domain in which it arose but the
problem may be resolved fairly easily within the paradigm of an adjacent
domain.
Disruptive innovation. When HBS professor Clayton Christensen introduced the
concept of disruptive innovation in his book The Innovator s Dilemma, it was a
revelation. In his study of why good firms fail, he found that what is normally
considered best practice listening to customers, investing in continuous
improvement, and focusing on the bottom line can be lethal in some
situations.
In a nutshell, what he discovered is that when the basis of competition
changes, because of technological shifts or other changes in the marketplace,
companies can find themselves getting better and better at things people want
less and less. When that happens, innovating your products won t help you
have to innovate your business model.
More recently, Steve Blank has developed lean startup methods and Alex
Osterwalder has created tools like the business model canvas and value
proposition canvas. These are all essential assets for anyone who finds
themselves in the situation Christensen described, and they are proving to be
effective in a wide variety of contexts.
Basic research. Pathbreaking innovations never arrive fully formed. They always
begin with the discovery of some new phenomenon. No one could guess how
Einstein s discoveries would shape the world, or that Alan Turing s universal
computer would someday become a real thing. As Neil deGrasse Tyson said when
asked about the impact of a major discovery, I don t know, but we ll probably
tax it. To his point, Einstein s discoveries now play essential roles in
technologies ranging from nuclear energy to computer technologies and GPS
satellites.
Some large enterprises, like IBM and Procter & Gamble, have the resources to
invest in labs to pursue basic research. Others, like Experian s DataLabs,
encourage researchers and engineers to go to conferences and hold internal
seminars on what they learn. Google invites about 30 top researchers to spend a
sabbatical year at the company and funds 250 academic projects annually.
Yet one of the best-kept secrets is how even small and medium-size enterprises
can access world-class research. The federal government funds a variety of
programs, such as the Hollings Manufacturing Extension Partnership, a series of
manufacturing hubs to help develop advanced technologies, and Argonne Design
Works. Local universities, which have a wealth of scientific talent, can also
be a valuable resource.
Taking steps to participate in these types of programs can help small business
compete in competitive markets. For example, Mike Wixom of Navitas, a
four-year-old battery company that joined the Joint Center for Energy Storage
Research (JCESR) as an affiliate, told me, As a small company, we re fighting
for our survival on a daily basis. Becoming a JCESR affiliate gives us an early
peek at technology, and you get to give feedback about what kinds manufacturing
issues are likely to come up with any particular chemistry.
So, clearly, being able to reach out to scientists on the cutting edge can help
a business plan for the future, just as the other approaches, such as design
thinking, open innovation, business model innovation, and others, can help
propel a business forward if applied in the right context. But no one solution
fits all problems.
If your innovation strategy is struggling or failing, consider whether it s
because you ve locked yourself into a single approach. There are always new
problems to solve; learn to apply the solution that best fits your current
problem.
Greg Satell is a popular speaker and consultant. His first book, Mapping
Innovation: A Playbook for Navigating a Disruptive Age, is coming out in 2017.
Follow his blog at Digital Tonto or on twitter @DigitalTonto.