The business world has gone through a drastic change in the past few years, boosted by the Covid-19 pandemic – a whole new world full of opportunities, changes, and challenges, especially innovation challenges. To be able to reach or to stay on top of the market one thing is key – groundbreaking and genuine innovation. The pressure to innovate has risen dramatically in the past 10 years. The term innovation itself is used in many ways, as a mantra, as working style, or simply as a marketing campaign. Bringing disruptive innovation to life has always been a challenge, but what exactly are the main hurdles you and your team must overcome to successfully innovate?

During the past 6 months, we were able to chat and interview influential innovation leaders from companies such as ROCHE, DB Schenker, Sony, LG Electronics, Siemens, Coca Cola, and many more. Obviously, every innovation team has different subjects and issues they are facing, but comparing the general conflict, each company has similar problems in the innovation space.

By being able to speak to these different innovation team members we concluded that the overall main “innovation blocker” is the so-called innovation culture, better said, the missing innovation culture.

Innovation Culture

When talking about innovation culture, we are talking about norms, values, ​​and attitudes, shaping the behavior of all employees, especially those who are involved in the innovation process. Since the innovation process is not limited to the core innovation team and this process is cross-sectional, the innovation culture as such can be described as a cross-dimensional culture.

Describing the key points of the culture is easier than establishing this value system. So,  when talking about innovation culture – what are the main challenges why innovation gets stuck? We defined four challenges:

(1) Top-down approach

Successful, groundbreaking innovation is determined by the ability of the team and their culture. To bring out the best you have to push and give room for these norms, values, and attitudes to grow and to become the standard. Therefore, Innovation is a CEO mandate. Only the CEO and their board can take the much-needed decision in time, capital, and structure.

“Innovation success is not about an idea creation team and taking it to market by the existing organization. Creating an innovation center independent of the corporate organization that is responsible for identifying a viable innovation opportunity and bringing it successfully to market can only be made by the C-Level.”

– Axel Schultze

(2) There is no time to innovate

In many cases, the cross-dimensional innovation team, from the CEO to the working student, is fully stuffed with finding new ways of improving current products or services. They are too busy to think of innovation in a way where opportunities are discovered, reviewed, developed, and validated. Unfortunately, innovation has even been outsourced quite a lot to universities or startups.

(3) Fail and fail fast

Obviously, the pressure to innovate and stay relevant in the market has risen in the past years. Managers tried different techniques, took closer looks at the startup world and how their management is innovative. This led to experimenting with playgrounds, where innovation team members are hunting for inspirations and the next big thing; pivoting, brainstorming, and massive prototyping. These newfound Innovation Hubs, which tend to go back and forth with ideas – prototyping, idea – prototyping, and so forth with every little long-term success. By changing the process into a more structured way, combining research and customer feedback before prototyping, the team is able to save a lot of time, money and is not limited to just “experiment”.

(4) The initial value of an idea is zero

Your idea or my idea?  We are living in a world where recognition for something is key. With this value in the back of your mind, people tend to keep ideas secret because they are scared that somebody is stealing their intellectual property. BUT in a successful and inspiring innovation culture, it should not matter who had the idea first.

“The innovation team must know that all ideas come from past experiences and are composed of millions of impressions, often co-produced by other people. […] Teammates should be rewarded for ideas but also equally rewarded for building new ideas based on previous ideas from other teammates or anybody else for that matter.”

– Axel Schultze

Groundbreaking innovation is not only about the original idea, it’s about what you and your team do with this idea. The value of the idea is created through relentless execution and open innovation by taking into consideration what your customer wants.

Despite these main challenges, genuine innovation can still be created with the right innovation culture and innovation mandate. Rethink innovation from the ground up and discover why innovation is a CEO mandate in our latest whitepaper, “Innovation is a CEO Mandate.”

Authored by: Anna Ranke

Innovation opportunity for enterprises. What worked for startups can now also work for enterprises. Even the innovation process would be the same. And purpose and reasoning should be the same too. The only difference is the leadership structure. And that requires a new understanding of what actually makes the difference between the two company types today.

No – it has nothing to do with size or capital, And yes both are driven by human beings.

Over the past four years, we learned so much about the difference between innovation in corporations and in startups that we today realize: Enterprises had not even a chance to be innovative even when acquiring a startup.  The full details can be downloaded as a Whitepaper

HOW ARE INNOVATIVE IDEAS CREATED
When thinking of innovation it is most helpful to understand how homo sapiens is performing the creation of innovative ideas. Without knowing how innovation is done, it is hard to manage the process and innovation remains to be a process. The key learning is that ideas are composed by our neurons from past experiences. There is no mechanism that just “creates” ideas.

INNOVATION PURPOSE
Without exception, the most innovative solutions were created in an attempt to solve a problem. Random experimentation and hoping to find a great idea never led to groundbreaking innovation. Innovation is an outcome – it cannot be a desire.

RETHINKING INNOVATION
When we know how innovation is created, we can request certain results, request to provide insights, and measure and manage the effort. Most importantly executives know what they are asking, even where and what to innovate.

INNOVATION READINESS
When you know the “what and how”, you can make sure that your business is ready to innovate in the first place and prevent unnecessary costs and delays.

INNOVATION MANAGEMENT
After all – innovation management can be performed like most other mission-critical activities, teams can be selected in accordance with the requirements and tasks and results become predictable and timely.

INNOVATION FINANCING
Successful innovations consumed more than $100 Million in funding, some reached into two-digit billion-dollar investments. Obviously, this is done in stages and in line with progress, KPIs, and timelines. Comparing it with a $500,000 startup would be a huge mistake because that was only their starting point.

FOLLOWING IS NO INNOVATION
Obviously, you can catch up with the market to survive. But the financial market will recognize it accordingly. A follower will not beat the innovator – not on the market cap.

RELENTLESS EXECUTION
Innovation is one of the intellectually most demanding jobs. Not only does it take 100% focus, it also requires relentless execution and the motive to do so. The Innovation Culture, team selection, and motivations are the ultimate driver of successful innovation.

The BlueCallom Deep Innovation Design method was modeled and shaped based on all the findings from our research and our own experiences, building 4 innovative businesses and helping hundreds of startups to get there too.

Whitepaper Download here.

 

 

Open innovation is a frequently-used term that brings a variety of imagery to mind: collaboration, intellectual property, startups, and co-creation. But most importantly, it involves “combining internal and external ideas” to bring new business concepts to life. As an innovation strategy, it serves as a pathway to integrate external perspectives (i.e., from users)  into the development of a new business offering. 

Simply put, open innovation involves accessing and exchanging knowledge between people in your organization and people working externally. The goal is to support innovation by generating new, high-quality ideas that can help create a long-term competitive advantage in the market. For an established company, it can be implemented by collaborating with individual people, other organizations, suppliers, and even startups. The flexibility of how open innovation is pursued truly makes it a one-size-fits-most strategy! Do you agree? Please let us know your opinion in the comments. 

Why Pursue Open Innovation? 

Companies choose to engage in open innovation because of the various opportunities for growth, learning, ideas, and other benefits of increasing innovation activities. Also, mitigating the risk of innovation is one reason companies pursue open innovation. If the market is involved in the innovation process, achieving idea validation then ensures that a new innovation will be accepted by its market. Below are some of the key advantages: 

Speed Up the Innovation Lifecycle 

Applying open innovation as a strategy to developing a new product can speed up the time from conceptualization to commercialization. When a company introduces the necessary external experiences into the innovation process, this combination of resources and knowledge together leads to a faster innovation lifecycle. For a product-oriented company, speed-to-market is crucial for success, so it can be a great fit for this type of firm.  

(1) Gain New Knowledge 

Open innovation is centered around gaining access to new knowledge, which can be accomplished by partnering with external organizations or individuals with a specialized skill-set. By applying new knowledge to a company’s project (or product or problem), the introduction of new ideas and perspectives can lead to new value creation and innovation. As a side benefit, access to new knowledge and learning opportunities can help employees evolve their careers in your company. 

In the Deep Innovation Design methodology, the ideation process involves an analogous search in which innovation participants compare unrelated (but similar) industries, companies, or sectors in order to derive inspiration by translating the understanding into their own company’s dynamic. Analogous search can also be accomplished through open innovation by incorporating unrelated (but similar!) partners, suppliers, or organizations into a company’s innovation process. The introduction of a radically different way of accomplishing a task or workflow could lead to successful innovation! To learn more about Deep Innovation Design, you can check out this TED Talk or read more in this blog post

(2) Benefit from the Customer Experience

Collaborating with selected customers (i.e., highly engaged users) is an effective way to generate new insights about customers’ usage of your products, services, and/or perspectives on your competition. Interacting with highly involved customers opens the doors to innovative ideas. These individuals likely have experience-based opinions around your company’s current offerings or other ideas on how to improve. Including customers in your innovation or ideation process increases the likelihood to compose and capture original ideas. Since an idea is a composition of past experiences according to recent discoveries in neuroscience, involving the experiences of the end-user can augment the ingenuity of the innovation team. Customer interaction through open innovation can lead to differentiating your company further from the competition, save time, and mitigate risk. 

Are you interested in more resources? We welcome you to explore our upcoming webinar: The Strategic Value of Open Innovation on March 11, 2021. 

(3) Risks to Pursuing Open Innovation 

Of course, it is important to mention the potential hazards of engaging in open innovation. Some companies may choose to avoid openness in their approach to innovating in order to eliminate the risk of revealing company know-how with external parties. As such, vetting potential partners, vendors, and collaborators is important before exposing internal processes and practices! However, the benefits and possibilities produced by open innovation significantly outweigh the risk of sharing too much information. 

Thank you for reading! What do you think are the pros and cons of implementing open innovation? Please share your ideas in the comments below. 

The end of brainstorming – it never led to groundbreaking innovation.

This post was inspired by a direct question for me on Quora. Over a year ago, I was asked a similar question.

Question: “How do successful companies manage the influx of ideas and choose top-notch ideas for inventing new products?

The answer “forced” us to build the first Neuro Innovation Management Software, BlueCallom! We realized it will be the end of brainstorming.

The end of brainstorming - opening up to an all new perspective

Hubble-Telescope Credit: Nasa

A loaded question. Almost like “how do we deal with the size of the universe and select where we want to do research?” We had amazing telescopes – but thinking outside the planet earth and building Hubble was a major breakthrough in many ways.

Answer: The influx of ideas and its selection.

Who says we have to make a selection? Think Hubble – look from the outside. We have to realize that all disruptive businesses we come across were built from pieces of ideas. If we select only a few – it will probably never survive just because we limit ourselves. More detailed questions needed to be answered:

Do we really know how to create a disruptive idea?

Once I realized that I couldn’t answer the following question: “How do you determine if there is an innovation at the end of the process?” we ended up building a Hubble for Innovation. We needed to leave the comfortable sessions, talking about thinking outside the box, thinking big, bold, open blah blah blah… and find our Hubble – Neuroscience.

The pictures we saw were more than spectacular!

We took the ideation process even further and deeper and stimulated an avalanche of idea pieces. In one project, we worked with 25 executives of a large airline, producing 25 x 30+ idea pieces = 750 idea pieces in one process (2 weeks of Neuro Ideation). Since we wanted to assess all ideas and use as many as we could, we ended up needing the computer and a few algorithms to help sort and rank it. Another project consisted of 600 managers from a large pharmaceutical company. We estimated that we aggregated roughly 18,000 idea pieces, of which we also want to take as many as we could. We had to admit, neither our idea collection mechanism nor our algorithm would be good enough for that task; so we decided to build a “machine” (software) to run the show.

Building “OUR” Innovation Hubble

There is no way I can describe all our insights from Neuroscience. However, our core discovery was: “Every idea ever created by a human being, was composed of past experiences.” Meaning we can’t “create any genuinely new idea.” In other words, hoping for ideas to compete in the innovation race is like dancing around a fireplace and hoping for rain. But that is what innovation labs do today.
The day we began to question all that, was the day we realized that innovation could be a logical, manageable and highly success-oriented process.

We’re almost there – currently beta testing. First, “self experiences” almost killed us, putting our own long-term vision on its head. It was even beyond our own expectations.

Neuro Innovation Management and the end of Brainstorming

1) No more limitations – The end of Brainstorming

Don’t limit your golden nuggets (ideas) because we all have been conditioned to a process called “Brainstorming.” While brainstorming was a great start, it never created groundbreaking innovation, and today we know why. Get your team from Brainstorming, yellow Post-Its, and whiteboards to a deep dive into Neuro Ideation. The depth of your ideas will be as different as the depth of the view from Hubble. Instead of ending a brainstorming session with a few “best ideas” leverage them all. Instead of making brainstorming the core of your ideation process, give your brain time to take a deep dive into past experiences, and come up with far more relevant concepts. Neuro Ideation is a two to three-week process and requires a needs and dreams analysis with your market to be prepared. The results will be stunning no matter how creative you may think you are.

2) Tools for things we can’t handle

Remember that we all built tools to overcome our physical limitations. So we need to build amazing tools to extend the limits of our idea process. It brings a truckload of valuable idea pieces. And when we think in that direction, it opens up a whole universe of innovation relevant aspects. We call it Deep Innovation Design.

3) Never forget the innovation purpose

You need to ask yourself some of the old questions: “What problem do you want to solve? Who do you want to innovate for? What value will you provide? 100% of the answers to those questions come from our customers. With Neuro Innovation Management, we can stimulate groundbreaking Innovation on Demand. Our “Innovation Hubble” already showed us pictures that we couldn’t imagine seeing before. We eventually realized that we have to start every innovation project with an “Innovation Opportunity Discovery” project.

P.S.
We feel like Pythagoras when he explained that earth is no disk – when we say “Innovation management is no serendipity,” declaring the end of brainstorming and the beginning of a logical, manageable innovation process.

I hope it gives you some inspiration.

Innovation is an extremely counterintuitive business.

For most people outside the innovation space, Innovation means radically new or significantly improved products. Interestingly enough, product innovation is the least successful model. There are various ways to innovate. Highly successful and radically disruptive innovations today come from business model innovation. For instance, in my old company, Computer 2000, we changed the business model for tech distribution from the ground up. With our tiny startup in the 1980s, we took on competitors of multi-hundred million dollars in revenue. It looked like the chance to survive is exactly 0.00%. Today it is a $37 billion business leading the tech distribution in the world. And still, most competitors did not notice the difference and why we could become a global market leader. It was a business model disruption that went unnoticed. Another example is Airbnb. The company caters to travelers’ needs to stay in a more individual apartment or house instead of a small room in a hotel. Hotels, however, perceive the competition as a price war since there are less expensive apartments too. The hotel industry managers, who never understood the competition, fought back with legal acts and did not compete on the service. As a result, they never brought their services in alignment with customer needs. Zappos, an online shoe dealer, changed both. Their business model and commitment to organizational innovation. Soon thereafter, they also started an experience innovation project and became a great example of multi-facet innovations. Let’s explore the big five innovation types.

The Big Five Innovation Types

Obviously, the topic can split even further. Still, we realized that these five innovation types need different approaches, different methods, have different financial or operational impacts, and call for a different innovation team composition.

Product Innovation

Focused on the product side. This is the classic way to innovate and the most obvious to be recognized by the market. However, it is also the easiest to copy and to outperform quickly. Product innovation offers room for different degrees of innovation like a profound improvement of a product that changes the way users work or introduces a radically different product that may change a whole industry segment. Competing with product innovation is oftentimes done by starting a price war, and very quickly, the innovator may be forced to reduce pricing, increase marketing effort, or take a much longer time to grow market share. Alternative products as such innovation can quickly substitute product innovation is the most obvious, the most visible, and the fastest to understand. In the past 20 years, business model innovation, experience innovation, or organizational innovation continuously won over product innovation. Probably one of the best examples is the automobile industry. Companies fight on the product level: electric motor or combustion engine. One company, Tesla, does not lead on the product level but uses one of the hardest nuts to crack, multi-facet innovation.  On the surface, it is, of course, the electric car. But when looking under the hood, not literally speaking, it is the business model innovation, the organizational innovation, and the experience innovation that makes the company the market leader despite having a much smaller production volume. While the global awareness for Tesla was achieved with its super fast and wide-ranging electric car plus its early engagement in autonomous driving, the whole wide-angle view of the Tesla management, including building the charging stations and the gigantic innovation on the battery side, came from an organizational innovation thinking, the way the cars can be configured and ordered and how easy it is to understand what a user gets is part of the experience innovation, the whole pricing pressure, initial losses and ways the cars get sold is part of the business model innovation. No other car manufacture in the world was so innovative on all fronts and took the automobile no longer as a single product – but a part of holistic user experience. Another example is Microsoft. It’s no news that Microsoft never invented a single product. The operating systems, DOS, and Windows have been acquired, and so were all the office products, the SQL server, and other tools acquired. So one could say Microsft is the least innovative tech company in the world. All they did is integrated all the products and sold them under their own brand. Many are still not fully integrated – 30 years later. Instead of putting all the resources, time, and money into building the solution, they needed to fulfill the vision they acquired. Microsoft’s real innovation is to create a user experience through integration and seamless exchange of data that nobody else saw as important. Nobody else did as well as they did. The experience innovation did not need a product but an architecture. The other innovation was a business model innovation. From the very early days, they committed not to build their own computers but pushed computer manufacturers to use their software. The non-compete commitment from Microsoft was compelling enough to get an exclusive commitment from the computer vendors. And knowing that all the office apps will need their operating system was good enough to give the OS away for peanuts. Business model innovation and experience innovation were strong. Understanding how the company operates and what they offer was so confusing for most competitors that nobody cracked their dominance – till today. As we will discuss other innovation types in the following posts, you will see the difference of those innovation types relative to the ‘good old’ product innovation. You will see that product innovation is not going away – it’s still an important part of an innovative business. Product innovation is becoming a commodity – but is no longer a differentiator.

#ProductInnovation

In the next parts, 2, 3, 4, and 5, we will go into the other innovation types details. Here is just a quick snapshot to put the above in context.

Experience Innovation

The most effective way to innovate, only recognized by users and communicated through advocacy. Experiences include general customer experience all the way to entire entertainment solutions such as theme parks or highly interactive restaurant types, and lately, space travel. Experience innovation is very hard to copy and very hard to compete with. Usually, it takes highly creative minds to piggyback on a concept and develop a different model that makes the experience unique.

#ExperienceInnovation

 

Business Model Innovation

The most successful way to innovate with a big impact on the industry. Typically, business model innovation goes hand in hand with experience innovation. It is the hardest innovation type for any competition to copy, even to compete with. Changing a business model is hard enough for a business to develop – it takes years for the competition to emulate and follow. Business model innovation has been the most successful type of innovation in the past 20 years. The biggest number of business model innovations emerged from the US.

#BusinessModelInnovation

Organizational Innovation

Innovation within the organization, mainly for process acceleration, customer experience, resulting in increased profitability. It is tough to copy (if not done by consultants), making it very hard to understand from the outside and even the inside. Organizational innovation often requires a deep injection of new processes, different employees, and often a different management team. In large organizations, hundreds or even thousands of people may be affected by organizational innovation when they cannot unlearn and learn new ways of conducting their work. One question quickly rises to the top: “Is innovation killing jobs or the wrong team killing innovation?”

#OrganizationalInnovation

Structure Innovation

Supra-Enterprises, companies bigger than 25,000 employees, seem to have the hardest time creating truly ground-breaking innovation. In particular, in the western world, Top Executives, boards, Investor representatives, Unions, Industry associations, local government representatives, and maybe more have to agree on creating a new leadership structure to bring innovation forward. Inventing disruptive solutions often require major changes in the current teams as skills and experiences may shift significantly. Disruption in the automotive, energy, food industry requires knowledge and deep experiences in those industries not only on the enterprise side but also in external structures. A startup as a small company can go under the radar – a public company cannot.

#StructureInnovation

Learn more about the General Innovation Type Differences.

Corporate Innovation Labs – Counter-Intuitive

Ingenuity – The corporate innovation teams are typically composed of brilliant minds, top-notch experts. If they can’t solve a problem, nobody can. Is that wrong? Seriously would you expect a sales manager to sit down and innovates and finds a new algorithm? Certainly not. Or maybe a financial controller who may know how to deal with algorithms, should they come up with a new way of building the next generation rocket system? Not very likely. Or?

Experimentation – It is globally understood that it takes a huge amount of creativity to come up with truly groundbreaking ideas. And since creative outcomes cannot be ordered, innovators get a great deal of freedom to experiment with all kinds of ideas and try new ones whenever something seems to make no sense. In other words, experimentation is a key in innovation design. How else?

Competing Ideas – Of course, once an idea is born and needs to hit the road to the market we need them but first, we need an idea, a prototype, and so forth, maybe approvals,  certification, and so forth. And that is expensive. Therefore the decision needs to be made that only the best, most plausible, most viable, most promising idea gets chosen. Right?

Realization – And once it is chosen we do what needs to be done to build and make the first small production batch to surprise the market. And since that is expensive. the other ideas that are too risky won’t make it. Correct?

Startup Mania – All the cases we see and hear about disruption, come from startups. Therefore we need to understand what they do, how they do, how they come up with those innovative ideas, and learn for our own innovation labs. So far no enterprise has put another out of business based on any disruptive idea. Buying or investing in startups looks like a good idea. Is it?

I’m sure you noticed that all the above is today’s normal, yet I was trying to provoke you and kind of question everything.

For more than 6 years, we ran a startup accelerator based on our experience of starting, growing, and successfully exiting companies. We also thought all the above is sort of a logical approach. But it is not. We came to the realization, that innovation and the rise of startups are loaded with counterintuitive steps and behavior.

  • Innovation lab packed with experts? The worst thing that can happen.
  • Experimentation? Once we understand how ideas are created, experimentations step back.
  • Competing ideas? Actually guarantees that innovation is not happening.
  • Parth of realization? Not even the richest enterprise can afford that path.
  • Not a single startup that was acquired or invested in bringing any kind of significant innovation

The Hidden Enterprise Innovation Power

Analyzing the main differences between a startup and an enterprise (I had the pleasure to be in both 2 enterprises than 4 startups) opened my eyes but it took 30 years. Enterprises have an inherited massive advantage over startups only that they don’t use those qualities in a way that makes them truly innovative. And when we are using the term “innovative” we mean groundbreaking innovation either as product innovation, and organizational innovation, or a business model innovation – ideally all three.

Talents
Large enterprises have many extraordinary people, superbly educated, top talented, well connected. However, the skills that are needed to become a top innovator. are never captured, never developed, and maybe oftentimes too understood.

Market Access
What startups need to explore in a painful process, enterprises have on a silver plate: customers with needs and dreams. The focus on efficiency, effectiveness, employee utilization, and more clogged the single most important access to innovation-relevant information.

Ideation Power
The top talents of any trait, diverse and far-reaching experiences, high level of qualification, and intellectual capacity are resources of an enterprise that dwarf any startup on the planet. How to leverage that power is completely unknown inside the enterprise organizations and only unfolds themselves by the sheer urge to survive in the better startups.

Realization Power
Laboratories to play and experiment in the final stage of the innovation journey map are a piece of cake in any corporate innovation environment. Startups build their MVPs with the most rudimentary tools. Sound really interesting and maybe is seen as the better solution. But only to the day when enterprise leaders get the idea to make a radical and strategic shift.

Financial Power
Almost needless to say that enterprises have no problem at all financing the first steps of an inner startup. Again a huge advantage over startups – but already in the next steps when first market tests and prototypes are complex and stretch the boundaries of physics, money runs out in enterprises. This is when VCs only begin and have no problem putting hundreds of millions in their startups. Yet a new car cost billions to develop.

What is the real problem?

When we look into the enterprise versus startup discussion, we simply look in the wrong direction. Every single successful enterprise has been an equally successful startup 20, 50, or 200 years ago. And even relatively young tech startups that have successfully completed their IPO and crossed the $5Billion revenue range almost forgot what happened when they were innovative year over year.

After four years of research, we realized: Enterprises had no other chance than fail. The way an enterprise is managed is structured in a way that the operation is optimized, employees best utilized, and every aspect of sales, marketing, production, logistics, engineering finance, and so forth is woven together in a way that leaves no room for anything else. And in the past, there was nothing else. But today there is: Every innovation triggers two new innovations, which trigger two new innovations. The innovation explosion – which only now is part of the competitive advantage – is simply not part of the enterprise management Carta.

How do you use all those discoveries?

You need to turn the counterintuitive situations with your current corporate innovation environment, on its head and redesign your thinking and innovation itself:

  1. Find ways to identify, develop, empower and stimulate the best available talents
  2. Leverage the market access to understand the needs and dreams of their customers
  3. Going far beyond brainstorming and leveraging “neuro ideation” getting to truly groundbreaking innovation
  4. Again leverage the market access to validate the extreme ideas that come out of the best possible ideation
  5. Trying to redesign business models based on all inputs to find their “disruptive moment”
  6. Create a long term “Staged Funding” plan before a penny was burned through experimentation
  7. Now build the MVP while going to market, creating “Market Born Products”
  8. Once the product is stable, scaling the operation as fast as possible.

And once done you start all over – never stop innovating, never stop producing, marketing servicing, and crafting a dominating corporate innovation strategy.  Enter into the “Innovation Continuum.”

For me, finding out how innovation is actually created and making it a repeatable process was the most exciting business journey in my life.

Let me know what you think.

After Corona (Covid-19) there will rarely be anything as it was. The understanding of the fragility of our global economy, the huge digital divide, our ability to collaborate, and much more is changing right now faster than ever before. And there is no reason to go back.
We are experiencing an amazing transformation and shift, realizing what our various societies are capable of under pressure. What the most powerful people in the world failed to achieve in the past 10+ years, managed a 0.3 µ small virus — Global Digitization within 3 months.

Massive digitization amplification

 

The amplification in connectedness, however, is also exposing a widening gap between digitally empowered people and the still massive digital illiteracy. Digital Interaction is a skill. That skill is composed of fast cognitive recognition, heightened content differentiation, digital body language, multi-language communication, the ability to cut loose from old needs that every exchange needs to be physical, understanding the power of asynchronous communication, and much more. We learned to walk, read, write, speak, hear, and now we extend all these skills into the digital world that is no less real than our physical world. Once it is experienced over a timeframe of 6 months more people will want to keep and expand those powers than go back.

One of the big questions is arising: Will the digital literate look down on others and enjoy their added powers or will they help to elevate those who have a hard time expanding their capability of experiences through global digitization?

Profound changes in production

Another gap is widening to a degree that most people cannot even comprehend the consequences. Our global economy lost trillions of dollars almost overnight due to the lack of production continuation strategies. Companies with a very high degree of automation could continue to have their robots and autonomous machines run and produce, and even shift gear to produce what’s needed. Those doing pretty ok. Those that require armies of workers have all of a sudden multiple challenges all at the same time: Production if anything at all is only possible in a very limited capacity. Plus, the social liability of having to send people home by the thousands. And, opening doors for the competition to come in with more automated companies. On top of all the fully digital businesses rise to phenomenal heights in value and revenue. The consequences may be dramatic: In order to compete in future crises – no matter in what form or reason, Large manufacturers will need to substantially increase their degree of automation in production, digitization in processes, and world market interactions – not for profit improvements but sheer protection of production continuation AND to ensure product availability for our ever more complex society. Even political pressure is already on the horizon that business continuation plans and capabilities to maintain the product flow in the local society must be ensured. What was thought to be Artificial Intelligence, that takes away jobs just because we can, is now a very different reason. Some companies will not even survive this pandemic – but the next pandemic may increase the closing of businesses and jobs by order of magnitude. Once the pandemic is over this effort may actually just begin.

Accelerating Innovation

We have been working under huge pressure to modify our Deep innovation Design program so that a nine-month program can be run as a crash course in six weeks. In order to train as many scientists as possible to move from experimentation to a methodical ideation process we needed to move from in-person training to digital – but moreover from 25 people classrooms to online classrooms with some hundred attendees if necessary. Every top educator would say it is crazy and cannot work. But we don’t even have an option, other than making it work. Innovation is seen all over right now – with or without professional support. The degree of ingenuity hasn’t been that high for decades. New types of virus testers pop up in almost every industrialized nation. We see all kinds of innovative solutions, which only need a bit more coordination and information flow. And all this will not stop after the pandemic is over. Also here it will actually begin to fully unfold.

Sanitation

Will we go back to be dirty and sloppy after the pandemic is over? Sure, some will, but the majority most likely will keep the positive habit of more careful hygiene.

Keeping relationships online

Will we go back to always meet people face to face for everything we want to discuss. Of course not. We appreciate the learning that a quick video call is for both parties quicker and more efficient. For sure we will remain to be social and want to meet people in person – at least the first connection. But we don’t need to meet for every little detail and this has all been helped by global digitization.

Home Delivery

Will we go back to shop for everything by going from shop to shop? Most certainly not. Of course, we will still go shopping, having the experience and the fun doing so – but the hugely increased percentage of shopping online compared to the past will not go back to “normal” because the majority has a whole new set of experience by now.

Modernizing Operations

Will we go back to endless considerations, pilot projects, and eventually still not upgrade? Only the very weak companies will. Those who realized how much faster we are doing things right now will keep the pace – and if it is only to not let the competition take over. My old mantra: “Speed is more important than perfection” found its biggest proponent being a virus.

Home Offices

About ten years ago home offices have been seen as a large part of a companies way of workplaces. Why did it not work out? Nobody did actually try it for a more extended period of time. Now we do. We get quickly used to do it even full time for weeks. We chat regularly with the team, exchange notes via WhatsApp or email. Meetings are much shorter and also if they are still mega long – everybody can work while some others ramble on. The only short interruption: “can you still hear me”. :)

The list gets longer every day. Every week, new experiences carve out deepening neuro-pathways in our brain that make us learn without even knowing that we learn. And every adult between 30 and 50 learned faster than ever before. Not only about dealing with a virus but also ourselves our needs, and our capability to adapt.

What is your learning?

How do you see the post-corona future? What do you hope will change when we finally eradicated covid-19 or at least contained it relatively well? Do you think Global Digitization will stay? Please share your thoughts – so we all can learn from each other.

The Quest for more Innovation

In the last five to ten years, pretty much any business and any government was pushing for more innovation. But if somebody was asked “How do I innovate? Tell me to step by step”, there was no tangible answer. When I was asked that very question, in particular, the “step by step” part, it daunted me, that there was simply no answer that could satisfy this question. Tens of thousands of consultants help people to “open their mind”, other use the “design thinking” model to process ideas – actually very well. But the question remains: “How do you CREATE those innovative ideas on-demand” in the first place – so you can then process them in any of the models!

Innovation on Demand

Innovation was an accidental event – a combination of many instances, experiences, and the brain pushed out an idea. In some cases, those ideas have been big enough to warrant starting a whole new business. But today, we have a situation where we don’t want to have an accidental brain flash leading to a possible innovation. In times where we have a crisis, we actually would want to have solutions on demand.  But as long as we don’t even know how ideas are created, we are far away from creating ideas on demand.

Maybe the Biggest Shift in Innovation History

Neuroscientists helped me understand that human beings are not really creative – we can only COMPOSE ideas from past experiences, from whatever we saw, heard, felt, and so forth. All our daily experiences are actually get associated with existing experiences and create some interesting IDEAS of which we actually don’t really know. The biggest idea machine is our mind when we sleep. There is much to explain but the net of it is: We are not creative and we create ideas by the millions. So what is the problem?

Our historic evolution, our culture, our education, and our brain itself poses a problem: It is conditioned to allow only the most obvious and the least demanding ideas to pop up. Only one in a trillion or less is actually making it from our right brain to the left and stimulates communication between the two, which forms a “thought” that may break through all the other barriers. And once we understand that process, we have the foundation for creating innovation on demand, like we create a house or bridge or something as simple as a paper plane.

Deep Innovation Design – PoC

in 2016 we began our first careful attempts to help startups to come up with disruptive business models. What was thought to be a “one of a million” chance, turned out to be better than 50%. Half of the startups in that, for us historic batch, we’re creating a disruptive model – on demand. They created what we call a “Disruptive Moment”. Disruptive moments are the part of a business model that will push competitors to change their course in order to catch up with these startups. It was the first version of a Prove of Concept (PoC). In the past two years, we went deeper into the “mechanics of our mind”. We learned what we needed to actually DO to play with our billions of neurons and synapses to form those innovative ideas. After two years of work, we found an early concept that works well enough to come up with an innovative solution, whenever we want. It was in itself an innovative concept to create innovation. We called it the “deep innovation design method”.

Four ‘T”s, one “M” of Deep Innovation Design

1) TALENT
We need people who have a “talent” for creating innovation. Very much like others are talented to play music, paint pictures, drive race cars, cook amazing meals, create fashion, help others or simply entertain people. Talent is the ability to play with ideas, seek experiences, are least pre-conditioned, reject conformity, create their own rules. We have millions with that trait. Almost any toddler has that talent until we press them into a societal system that unknowingly suppresses that talent, but it is still there – hidden. Do you remember: “Don’t be so childish”, “you are a dreamer, be more realistic”, “Focus, learn your lesson, you need to repeat it tomorrow in class.”

2) TEAM
Like a music band, or a football team, innovation is a team sport – if you do it alone you end up waiting for accidental ideas. And one of the most important players in the “Innovation Play”, are the affected people: Customers, users, victims. If you start the game without them you are doomed to lose. And if your actors (innovators) are all of the same trade, you will lose as well. Diversity is the magic formula. Understanding that part makes it also very obvious why enterprises CANNOT be innovative. They try to surprise the customer with their ideas instead of co-creating an experience. And their ideas come from a monoculture called R&D centers, engineering teams, or other experts. And finally, the decision-maker, who may not be able to ‘experience’ the idea in their mind will need to reject the idea. It almost couldn’t be worse. We learned that ‘innovation’ is one of the most counterintuitive activities humankind is conducting – yet mother nature is pushing it out wherever she can.

3) TRAINING
Our brain is an old machine with lots of upgrades. More upgrades than any other organ in our human apparatus. It is also the most adaptive body part. To overcome some of the 300,000-year-old habits and some even go back 5 million years, we need to train our brains. I often wonder how long our children would crawl if we never help them to walk. We need to train our bran in opening a treasure chest that is heavily guarded by about 200 million nerve strands or Axons, our so-called Corpus Callosum.
With good talents, a great team, and well-defined techniques we actually can. And that is the beginning of “Innovation on demand”.

4) TOOLS
You know the saying: “I think my head explodes”- right? And that is always when you reach your capacity limits of learning or thinking, or comprehending – or – innovating. In an interesting way, it’s all the same. For the last 12,000 years, we experience this more and more often and we have built more and more tools and ever bigger teams to deal with exactly that problem. We have yardsticks to measure distances much easier than computing them in our brain. We build cranes big enough to lift the weight we need to lift without architecting it over and over again. And today we developed tools, methods, and finally technology that shall help us to go through this rather demanding process called innovation. And guess what – it is no different from what athletes perform in their contests, musicians on stage, race drivers on the street or on the water, and so forth. Both athletes and innovators, can easily loos one or two Kilo of body weight, during such processes. When I processed complex ideas or learned entirely new things rather fast, I fall asleep, equally exhausted than after a 20 km run (12.4 miles). Our brain can consume massive energy! That energy consumption is of extreme importance to know when we try to get groundbreaking ideas out of it.

5) MARKET
Here is when the rubber meets the road. There are an estimated 100 Million patents in drawers that have been never used. It shows that the initial value of innovation, even patented is exactly ZERO. The value is only and exclusively created when an idea gets executed, brought to life, and into the market. The value then grows with the size of its distribution. We can be as innovative as we want – if we cannot make it available to a market or the market is not interesting, the value remains to be zero. In the end, sales channels, creative marketing, service and support organizations, transport (and if it is the Internet) are key to the success of any innovation. This success is seen best when we look through the macroeconomic lens: A company creates a product. It is sold through distribution and dealer channels, it is shipped across all oceans, it is serviced locally, maybe education organizations provide training, maybe consulting companies help apply the product. At the same time, new ideas pop up from companies that build add-ons to that product and create even a market extension. All of a sudden a company with 5,000 employees actually creates 50,000 indirect jobs. That innovation is clearly valuable. The worst of all versions is to create a valuable idea, get a patent and then not only not use it but prevent anybody else from creating it. It is a crime on society – stealing an advancement, just based on self-interests.

How to start from here

On April 23, the BlueCallom Group who worked on the Deep Innovation Design Model for four years is providing a free online seminar (webinar) and explaining how the Deep Innovation Design Model works, where you can get trained and how you can create innovation on demand. The World Innovations Forum is providing training programs and support in emerging countries and is able to provide stipends for talented innovators to learn how to be extremely innovative.

 

In the past four years, we were attempting to understand how innovation is actually created and analyzed how we were building startups that became ten years later billion-dollar companies. We were also exploring how other startups that became billion-dollar companies created their ideas and successes. We found striking insights about the difference in innovations power between startups and established billion-dollar enterprises – who were startups themselves just a few decades ago. Also, we explored the difference between invention and innovation.

From invention to innovation

The automobile evolved from INVENTION to INNOVATION. The disk brakes moved from INVENTION to IMPROVEMENT. The first electric BMW car made it from INVENTION to an EXPERIMENT, while Tesla made it to INNOVATION without even having it invented. A self-driving Mercedes S-Class made a 1,000-mile journey from Munich to Copenhagen and back in 1992! It was already using computer vision and computers to react in real-time. The autonomous car achieved speeds exceeding 110 miles per hour (175 km/h) on the German Autobahn with nearly no human intervention for 95% of the distance. It drove in traffic, executing maneuvers to pass other cars. Also, here, all the necessary inventions have not been taken to innovation but ended up in drawers. Analyzing the reasons is equally complex and interesting but exceeds the purpose of this post. We will do this in another post.

Invention vs. Innovation

In most enterprises, we may find hundreds if not thousands of geniuses with fabulous ideas but no way to go. There is this massive difference between INVENTION and INNOVATION. INVENTION is the act of having and documenting an idea, maybe building a prototype, and perhaps even being granted one or more patents. Unfortunately, the invention is of no value at all. Bringing such an invention to market, scale the business or business unit and make it a global success is when we talk about INNOVATIONS. The full cycle of invention, prototyping, market validation, product-market-fit, funding, marketing, testing, producing, launching, more funding, branding, selling, customer engagement, servicing, business model optimization, more funding, going international all the way up to being a global player in that segment is a successful innovation. Innovation is neither a product nor service nor the marketing or sales effort to make it big – INNOVATION is the result of a series of activities, engagements, teams, and market conditions that lead to groundbreaking new solutions for a larger group of users.

The value of innovation grows with its distribution!

The good news, pretty much every large enterprise on earth is struggling with being innovative. Even enterprises that came just two decades ago with highly innovative solutions to market, now struggling to be innovative. The bad news, more innovative startups, than ever before in history challenge any size enterprise. The question arises: Is the lifecycle of the innovation, the future lifecycle of a company in general?

The five biggest mistakes

  1. The company never developed a comprehensive plan to identify the brilliant ideas, which their employees already created, usually based on their experience with the problem. Inventors are mostly not communicative managers but more introverted engineers!
  2. Seeing the brain spark of an invention already as innovation and wonder why it is not successful in this highly competitive global economy.
  3. Completely ignoring the fact that innovative businesses require a lot of funding to become that innovative business everybody is dreaming about.
  4. Running innovation alongside and hoping for magical growth and market disruption.
  5. Management teams never asked themselves where these ideas are actually coming from and how they can be harnessed.

What to do

  1. A great starting point is to see the act of invention as an ignition point that triggers a comprehensive process of innovation.
  2. It is far better to develop trust in the “Innovation Potential” of the company’s employees than looking into startups.
  3. Rationalizing that any major innovation is also a significant investment, and there is no difference between a startup and a global enterprise.
  4. Creating a serious effort to include customers into the innovation process and stop looking at what the competition is doing.
  5. Stop hoping that employees think like startup entrepreneurs. If they would, they would be long gone, and if they stayed, they much better contribute to an enterprise-level innovation process.

We will share more findings and more insights as we progress.

The Innovation Challenge

Corporations of all sizes, older than 15 years are in jeopardy. It is NOT LACK INNOVATION as such, it is lacking the UNDERSTANDING HOW TO INNOVATE. TEST: Tell your teams to be more innovative. The response to the question may be: “Yes, we’d love to do that, but please teach me what I must do to be innovative”. Your team learned to handle machines, compile algorithms, develop strategies and business plans, how to sell and how to market, create a long-term financial forecast, or how to hire talents. They never learned how to innovate or how to create a disruptive business model. Most even set innovation equal to the invention. The real challenge is:
1) We need to understand how one creates ideas in the first place?
2) How these ideas may turn into an ‘innovation’?
3) How do we know that those ideas are actually something the market will buy?
4) When do we invest in such innovation and how much?
5) How do we organize an innovation process from idea creation to market success?

Not lack of innovation but lack of understanding how to innovate

In search of Innovation

Most businesses are seriously challenged and try all kinds of ways: Creating an innovation lab, investing in startups, trying to observe young innovators, hire teams to be creative and innovate – and all kinds of random actions in the pursuit of “finding innovation”. This already went on for decades with no serious success. Young businesses continue to disrupt entire industry segments. Whether it is the car industry, the taxi industry, the hotel industry, the mobile communication industry, the micropayment industry, the mobile payment industry, and on and on and on. Who is next: the insurance industry, the airline industry, the food industry, the waste industry, the ITC industry, the automobile industry, the mechanic’s parts industry, the legal advice industry…Every industry will experience major disruption in the coming years. And this is NOT because some come up with crazy ideas and think differently. 200 to 500 out of 1 million startups make it. So that is not much. But those 200 – 500 disrupt any available industry. And will not wait for anybody.

Learning to Innovate

Each and every corporation has its own innovations paradigm. Most don’t even know. The innovations paradigm is the entire complex from idea development in an R&D center or innovation lab to successful market entry. Today this is all experimentation, trial, and error. And we apply the mechanisms that we know to find out. Yes, we need to think very differently – but not how we try today. Funny enough we need to follow age-old rules:

  • We need to find out how ideas are actually created and processed
  • Once we understand how our brain works, we can apply strategies to use it.
  • We then will need to dive far deeper into our business ecosystem than ever before
  • And finally, develop radically different solutions that unfold an ideal way for customers
  • Leadership in this entire process can make it a repeatable process so one can continuously innovate

Implementing such an “Innovations Paradigm” into the enterprise is far less difficult as it may look, yet it is not done overnight and requires the buy-in of the C-Level. When anybody says we need to think like a startup, We are all of the company. And the key driver is always the CEO – Startup or Global Enterprise. Carl Benz, Henry Ford, Robert Bosch, Graham Bell, Robert Noyce, Steve Jobs, Bill Gates, Larry Ellison, Mark Zuckerberg, Jeff Bezos were all young crazy entrepreneurs when they started. And many of that league are just about to get disrupted by people who think and act differently – but that thinking is no secret anymore and not unique.

You may want to join our webinar series on how to innovate and how to get your team to true innovation.

@AxelS