Training people on computer systems is stupid.
We need to train the systems to work with people. If we in the IT industry can turn that idea into a profitable reality, even a retired punch-card kid might find himself captaining the development team.
And if anyone bothers to make an analysis of productivity and success rates they will find software vendors can improve the quality and cost efficiency of their product output by improving the quality of their requirements input.
Never mind all the excuses, like we spend too little on R&D or innovation, go out of your way to find “differentiation” and then swallow this dose of business reality.
Words that some of us in industry as whole and consultants have been thinking for years but it took Geoffrey More of TCG Advisors to finally commit it to print in February of this year.
If a company is worrying about innovation, they should take heart. Only successful companies do. By contrast, unsuccessful companies either aren't around to do any worrying or are consumed with more pressing concerns, like meeting payroll or paying their bills. At the other end of the spectrum, venture-backed start-ups in any vertical market have lots of worries, but innovating isn't one of them - they actually worry more about not innovating, as in let's not waste our scarce resources reinventing wheels that others have already developed.
Let us say the company has had some success, has some momentum, and therefore some inertia, and it is the inertia that has everyone worried. Design inertia normally resists change. This is a good thing, as long as the company is headed in the strategic direction decided. But when the market changes, inertia acts against the company’s future interests. Now everyone has the right to be worried.
So the topic of innovation is raised in the hope of getting some insight. Good luck. Recent research leads us in MWM-systems to believe that innovation, as a topic, leads the business code writing industry in to complete twaddle.
The reality is that innovation is easy. It is the deployment of innovation which is difficult!
With that in mind, let us try to dispel what, we might call the “Myths about Business Innovation”:
"The company does not innovate any more".
Baloney. People are innovating all the time. The problem is, the innovations are no longer differentiating the company. The innovations, in other words, parallel the competitors' innovations, with the result that companies start to look more or less alike. Customers, seeing little to no difference, put more and more emphasis on price.
"Product life cycles are getting shorter and shorter."
And whose fault is that? If a company does not differentiate in hard-to-copy ways, it cannot expect what differentiation created to be long-lived. IPod’s product life cycles are longer than its competitors, not because it has a way-cool form factor but because iTunes is part of the iPod experience that Apple's rivals are still struggling duplicate. And as cars make their dashboards iPod compatible, the competitors run around catching up to Apple instead of making their offerings distinctive in some other dimension. Sustainable differentiation requires barriers to entry and barriers to exit.
"We need to be more like Google".
Not on your life. Google is a once-in-a-decade phenomenon, a company riding a wave of adoption so powerful that not only is the first derivative of its growth curve positive, but so is the second derivative. If that describes a company’s market, we doubt that company is worrying about innovation. If it does not, then seek outside help, from an organisation which has had recent experience with the respective markets.
"R&D investment is a good indicator of innovation commitment. "
No, it is not. In the first half of this decade, HP invested 15% in R&D yet Dell invested 5% and cleaned up. How? They out-innovated HP in process innovations led primarily by their operations guys. Innovation that leads to sustainable competitive advantage can be initiated and led by any part of a company. R&D represents the research department's lead, and in general pays off well in double-digit growth markets and increasingly poorly in single-digit growth markets.
"Great innovators are usually egotistical mavericks. "
Not any more (although there is no shortage of egotistical mavericks that would have you think otherwise) Branson comes to mind here. In the current decade there is more competitive differentiation to be gained through collaboration than through hitting your head against the wall and going it alone. That's because our extended supply chains reward each company for focusing on its core and outsourcing the rest of the offer to someone else in the chain. But actually orchestrating these chains to perform effectively in real time requires enormous innovation. And that is a job for people who listen well, empathise deeply, and make the differentiated performance of the chain as a whole as important as their own local success. Many great innovators with audacious ambitions have the qualities of Tom Sawyer, getting other people to help them paint the fence.
"Innovation is inherently disruptive."
Not necessarily and even then only for a short time. The more established a company, the less likely it is to employ specialists. Alternatives include application innovation, product innovation, platform innovation, line extension innovation, design innovation, marketing innovation, experiential innovation, value engineering innovation, integration innovation, process innovation, value migration innovation, and acquisition innovation. This last one, in particular, is usually on the back of tips of merit with the new target customer. Instead it has legacy commitments to the old target customer who in turn is threatened by and resents the intrusion of the new innovation.
Thus the corporate commercial teams find themselves more or less honour-bound to sabotage the next-generation offering even if only because of their existing incentive plan. Whether they actually do so or not, they will be in no position to lead the kind of charge required, and it is no wonder when some little start-up beats a large finely tuned commercial machine to the punch.
Article written by Angelo Quinlan, Senior Consultant to MWM Systems
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