I just finished doing a series of talks for the Australian Industry Group. I was on an expert panel with Kate Morrison and Roger La Salle and we discussed the topic Innovation: Where to next for your company? We spoke to 200 people over four events in Brisbane, Sydney, Melbourne and Adelaide. It was great to get out and hear about what firms are thinking and doing about innovation. It was also great to meet a few of the blog readers in person!
Here is my talk from the Melbourne event (hit the green arrow to hear the audio, and the slides will advance automatically – it runs for 16 minutes, and if my voice sounds really weird, you need to download the latest version of flash):
In my talk, I looked at three ideas that you need to understand to lead innovation within an organisation. Most of the people at the breakfasts were owners or managers of small firms, so the ideas were organised around themes that might help them. The three key ideas for leading innovation will not come as any surprise to regular readers here – they are:
- Invention is not innovation: Invention is coming up with a great idea, innovation is executing a great idea and getting it to spread. If you think that managing innovation is all about ideas, you end up trying to capture lightning in a bottle – you have to figure out a way to generate and capture more ideas. However, most organisations actually have plenty of ideas – their problem is in selecting and executing the best ones, and getting the ideas to spread. That’s innovation – and if you think about it that way you realise that it is a process that can be managed.
- Innovation is more than just new products: We often think that innovation is only about new products and services. However, there are many ways to innovate. An important one that is often overlooked is business model innovation. This is basically finding new ways to bring a product or service to market. The example that I use in the talk is Better Place – an electric car manufacturer. They have an innovative product, they have an even more innovative business model. Their cars perform like petrol-powered cars – which makes it a vehicle not just for people that want to be green, but for everyone. Most importantly, they are charging by the kilometer rather than selling cars outright. This allows them to use a novel method for recharging and switching out batteries. It’s an inventive business model, and a good illustration of how business model innovation can work. It’s something that more organisations need to think about.
- Innovation is a process: This follows directly from the first point. Innovation is a three step process – you need to generate new ideas, you need to select and execute the best ones, and you need to get your new ideas to spread. John and I like to use the innovation value chain to measure and manage this process. It is a method that seems to work pretty well. At the last three events, Kate asked the audience how many people had a managed innovation process in place. In each location, only one person did. That’s about 2% of firms! There is a huge opportunity for firms to manage innovation more effectively by thinking of it as a process rather than an event.
If you understand and act on these three ideas, you can improve your innovation performance. Since it seems like relatively few firms do, it gives you a chance to become an innovation leader.