The Partner – May 2013 21

1. Ideas are Gold Dust Ideas are a dime a dozen, but they’re the vital starting point for any innovation. Individually they’re almost worthless

little specks of dust. Great innovation companies build a wide ‘funnel’ to maximize idea capture. They look for ideas in the most unusual places – especially outside the box, outside their own four walls, outside their organisation. They look to customers, end-users, competitors, and other industries. There is no such thing as a ‘bad idea’, other than ‘the one that got away’, or the one that was never expressed.

2. Engagement is KeyThe gold dust must be mixed vigorously. Creative destruction and reconstruction. Idea combination and recombination. The greatest innovators encourage the wildest fights,

passionate debates, the confidence and shared commitment that enable creative conflict. “Politeness is the slow poison of collaboration (Edwin Land)!” The best fights happen when cross-functional, multidisciplinary, diverse perspectives are brought together, passionately represented, and not allowed out of the room until there have been a few deaths and rebirths. The tornado looks like chaos, but it’s actually chaos theory in action!

Engage the whole value chain early. Anyone ultimately involved in delivering or consuming value derived from a specific innovation should be engaged in the process of creating it – ideally from the idea stage throughout development. But it’s not enough to merely bring outside people and perspectives to the process. The magic happens based on how they’re engaged. They need to be motivated, creative, communicative and collaborative. The goal is quality not quantity. A few

high quality collaborations with key stakeholders will deliver more value than many half hearted attempts with people who just don’t ‘get it’. Find informed users who will articulately and mercilessly criticise you. They can become your best advocates and champions. Carefully select and build your innovation team around these ‘lead users’, ensuring key perspectives, intelligence and vital knowledge is brought to the process.

3. Failure is the Greatest Teacher There’s been much debate about whether we learn more from failure or success. Humans seem to be wired to

learn from our own mistakes, rather than those of others. Vicarious failure doesn’t seem to be a great teacher, and nor does vicarious success – e.g., ‘Aren’t I Great’ books. What about innovation? There have been many so called ‘accidental innovations’, but these aren’t examples of learning from mistakes. They illustrate that ideas can come from surprising places – including accidents in the lab. However, the best innovations usually don’t come from labs – but rather, from real world users and their applications of tools, techniques and technology (Eric von Hippel, ‘Democratizing Innovation’) – very often trying to ‘correct’ flaws in the design of products they’re using. In general, when we try things, experiment and fail, we can learn a great deal if we take the additional step of deeply examining what went wrong.

When we created the Lab in 1993 as a consortium for sharing best practices, secret sauces and recipes for innovation leadership, we started with success stories. However, we soon discovered we learned more from sharing failure stories – the more spectacular, the better! Insights emerged from examining mistakes with the advantage of looking across the founding businesses (initially Nortel Networks, 3M and NYNEX). We could powerfully apply resulting insights to common problems – how to maximise commercialisation

The MIT Innovation Lab: 5 Key Learnings

Dr Dave Richards, Cass Business School, London

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22 The Partner – May 2013

success rates and innovation return on investment (ROI), and create innovation capabilities as a sustainable platform for competitive leadership.

4. Fail & Succeed Quickly

As reported in this publication two years ago (‘Collaborative Advantage’, Richards), delaying project launch

effectively kills eventual ROI, by increasing development costs and reducing market penetration. Eliminate indecision. Timing is everything. All innovations must hit the ‘use by date’! So launching a project quickly is essential, but so is terminating it when it becomes apparent there are fatal flaws.

Great innovators stand out by being particularly ruthless. They kill good ideas quickly, focusing limited resources on the great ideas – their future. The key is to minimise time, attention and funds consumed by projects that it will never make it out the door anyway. It’s about focus. Poor innovators allow egos, turf, ‘not invented here’, and all sorts of other nonsense to get in the way of spotting and killing duds. The worst scenario is when an idea survives all the way through development and market introduction, only to be rejected by customers. Thanks anyway – another ‘unneeded innovation’. How sad is that? If only someone had asked!

5. Learning requires Memory

Another realisation we came to shortly after we began sharing failure stories is that there were patterns –

Organisa(onal  Characteris(cs   Internal  Process  Management   External  Engagement  Factors  

1.  No  explicit  innova0on  agenda  

2.  Lack  of  clear  overall  purpose  

3.  Inadequate  customer  focus  

4.  People  not  engaged  in  strategy  

5.  Weak  leadership  

6.  People  organised  in  silos  

7.  Disempowering,  blame  culture  –  experimenta0on  not  encouraged  

8.  Ineffectual  communica0on  prevalent  &  tolerated  

9.  Collabora0on  &  contribu0on  inadequately  rewarded  

10.  LiQle  or  no  design  competence  

11.  Inadequate  business  intelligence  on  customers,  markets,  compe0tors  &  industry  trends  

12.  Lack  of  systema0c  knowledge  management    

1.  Unclear  project  goals  –  expected  results  &  0ming  

2.  Inadequate  resources  applied  to  deliver  results  on  schedule  

3.  Inadequate  business  case  for  proposed  ‘innova0on’  

4.  No  early  feasibility  check  

5.  Lacking  or  ineffectual  execu0ve  champion  

6.  Weak  project  leadership  

7.  Ineffec0ve  teamwork,  communica0on  &  collabora0on  

8.  No  celebra0on  of  milestones  

9.  Design  not  involved  throughout  

10.  LiQle  or  no  usability  tes0ng  11.  Inadequate  monitoring  &  

evalua0on  of  results  

12.  Failure  to  terminate  failing  projects  

1.  Weak  customer  engagement  

2.  Failure  to  differen0ate  between  users,  choosers  &  influencers  

3.  Sales  or  market  channels  not  engaged  early  &  oYen  

4.  Inadequate  market  research  

5.  Suppliers  not  engaged  or  fail  to  deliver  on  requirements  

6.  Market  or  industry  experts  disinterested  or  nega0ve  

7.  Compe0tor(s)  not  understood  or  responses  not  an0cipated  

8.  Other  innova0ons  or  trends  make  the  idea  irrelevant  

9.  Regulatory  environment  precludes  or  limits  acceptance  

10.  Too  many  viable  alterna0ves  

11.  Can’t  command  adequate  price  

12.  ‘Innova0on’  rejected  by  customers    

repetition of mistakes – and an apparent lack of institutional memory. By systematically creating and applying institutional memory to the problems of innovation, we were able to measurably, continuously and sustainably improve our success rates and ROI.

Patterns of errors emerged within and across companies, as summarized in the following table. Some of the ‘top dirty dozen’ errors listed come from research on why innovation success rates are so low, particularly the list of organisational characteristics – which frankly, weren’t so applicable to the Lab members. But in general, even a few of the factors listed could effectively kill any innovation. For example, the lack of effective executive championing for an idea through the innovation development process makes eventual failure much more likely. The answer is to find a champion early, and take steps to ensure continuity through organisational changes that may remove or defocus the original champion.

By recognising that we were making and repeating the same sorts of mistakes, we realised we needed to establish institutional memory. This required ensuring experienced people were on hand as advisors, story-telling (capture and communication), systematised knowledge management, and investment in training and developing innovation leadership – both in individuals, and as an organisational capability.

In summary, through participation in the MIT Innovation Lab, we learned how to maximise idea capture, engage in creative development, learn from mistakes, do it all quickly, and apply what we learned to maximise commercial success and innovation leadership. And it was fun!

dr.david.r.richards@gmail.com