It’s clear that today, Sunday January 3rd, 2016 is the day that we’ve hit Peak Innovation.
Josie Gibson pointed out to me that in 2015, it was the most-used business buzzword word in both Australia and the world. In Australia, we’ve also had a frenzy of interest in innovation as a result of the new Innovation Policy that was released by the national government at the start of December. As a result of this, we’ve also started seeing a major backlash against innovation.
And yet, many (most?) organisations still really struggle to execute new ideas to create value. If there’s such a gap between the hype about innovation and the value that it’s really creating, it can only be downhill from here, right?
Well, maybe it’s not so clear that we’ve hit Peak Innovation. I think we’re actually at Peak Innovation Hype.
New ideas that generate a lot of buzz tend to follow the Gartner Hype Cycle. Here is how they describe it:
Technology Trigger: A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven.
Peak of Inflated Expectations: Early publicity produces a number of success stories — often accompanied by scores of failures. Some companies take action; many do not.
Trough of Disillusionment: Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters.
Slope of Enlightenment: More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.
Plateau of Productivity: Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology’s broad market applicability and relevance are clearly paying off.
With innovation, I think we’re right at the Peak of Inflated Expectations.
It’s important to remember that new ideas create value slowly as they diffuse – a process that follows an S-Curve. Here’s what you get when you combine the Innovation Diffusion Curve (the one marked “Reality”) with the Hype Cycle:
Keep in mind that these are the curves for successful ideas – ideas that fail can drop to 0 on the value axis at any time!
The frustration is that when the hype hits its peak, the actual value that the new idea has created is still very low – this is what creates the backlash.
I’ve shown this diagram to a bunch of people and the responses are interesting – they include:
- “The high level of hype around innovation must create opportunities.” It does, but it also creates threats. The opportunities are that the hype creates interest, and more people willing to invest in innovation, which leads to experiments – and these are critical to unlocking the full value of the idea. The threats are that a lot of organisations will waste time and money on people that are trying to take advantage of the innovation hype, but who don’t know what they’re doing.
- “How can we accelerate the diffusion process?” You can’t. This is one of the frustrating parts of innovation – it is inherently time-based, and it’s nearly impossible to speed it up. The big issue isn’t speeing it up, it’s making sure that your idea successfully goes up the diffusion curve so that its full value is realised.
- “We need to be more innovative, so what should we do?” Talk to people that have been working on innovation for a while – not just since the hype started building.
Here’s the thing – we actually know a bit about what makes innovation work today. To build an innovation culture we need to:
- Manage innovation as a process. It’s not enough to just come up with new ideas. We also need the time and resources to select the best ones, execute the ideas, and get ideas to spread.
- Get better ideas. A common mistake is to think that innovation is only about new ideas. It’s not. However, some people swing the other direction and say that it’s only about execution. That’s not right either. You need both great ideas and great execution to succeed. Tools like innovation jams are one way to get better ideas.
- Build a portfolio of innovation ideas. It’s important to make incremental innovations that make us better at what we currently do, but we also need to invest in potentially game-changing ideas. To succeed, we need to do both. Ralph Ohr has written a lot of great stuff on this idea, as has Paul Hobcraft.
- Learn how to innovate business models. Revolutionary new ideas require new business models to succeed – so we need to build the skill of business model innovation. Steve Blank shows how business model innovation and the three horizons model integrate:
- Don’t look for the quick fix. When someone says “fix your innovation problems by buying this software,” it sounds a lot like Startup L. Jackson’s quote: “Learn to speak Mandarin in our six week course & become a professional interpreter!”
Yes, the hype around innovation right now is excessive. But that doesn’t mean that there isn’t value there. We’re at the point where we will start to unlock this value more consistently – and when we do, then we’ll hit Peak Innovation.