Last week I talked about how I use Malcolm Gladwell’s TED talk in my innovation courses. Another one that I use to illustrate how the innovation process is changing is the talk by Charles Leadbeater:

The innovation lessons are a little easier to pull out of this one, since it is directly about innovation. Leadbeater talks primarily about the role that collaboration plays now in innovation. Many of the key ideas are explained in his book We-Think, which is definitely worth reading. Here are some of the key ideas that jump out at me in his talk:

• His story of the invention of the mountain bike is an excellent example of customer-led innovation. Over 60% of the bicycles sold in the US now are mountain bikes, but they were not developed by bike companies. They were developed by lead users, who combined the rugged frame of the slow, clunky one-speed bikes, the gears from racing bikes, and brakes from small motorcycles to create bikes they could take off-road. This happens in many industries now – others that we talked about in class include software, adventure sports and medicine. The last one always makes students a bit nervous – who wants to have their doctor experimenting? And yet, many times they have to invent new ways of doing things on the fly when they are faced with an urgent situation. So many medical devices actually originate in use.
• Leadbeater’s discussion of the patent system builds on that last point. He says that the purpose of many innovations is discovered in use, which does not fit well with an IP system that requires inventors to know exactly how their invention will be used in order to file a patent. Inventors often don’t know what their ideas are for! I think that this is a critical point – this is one of the reasons why “release, get feedback, improve, iterate” is a very effective innovation method. It allows you to discover what your great idea is actually good for as you interact with the people using it.
• There is a good discussion of why the organisational imperatives within large firms lead to incremental innovation rather than breakthroughs. It is much easier to get sign off on an idea that builds incrementally on an existing product or service, aimed at current customers, with a reasonably predictable return. Innovation is inherently uncertain, which often makes it difficult to get innovative ideas off the ground within large organisations.
• “The truth is that most creativity is cumulative, and collaborative.” Innovations combine things that already exist. There is no thunderbolt from the sky, but rather a great deal of hard work, discussion, and collaboration that must take place if we are to be consistently innovative.
• The last half of the talk is a great explanation of the conflicts between open and closed innovation models. Leadbeater discusses why established firms try hard to maintain their primarily closed innovation models. He also correctly points out that the most successful business models of the future will probably not be either fully open or fully closed, but rather some type of hybrid combination of the two.

Overall, it is a terrfic talk and well worth your time. Both in this and in We-Think Leadbeater makes a compelling case for the benefits of collaborative innovation, why organisations might use open innovation models, and some of the tensions involved in doing so.