Relying on mergers and acquisitions for growth sends a signal that you don't know how to innovate or how to manage it. M&A has other problems, too. Companies tend to overpay which actually destroys shareholder value. At best, firms end up paying full value, neither better or worse off financially. The firm grows in size, not value, and pays in the form of distraction. What if you could use the tools and processes of innovation in mergers and acquisitions? How could it help? Would you select acquisition targets better? Could it help understand the valuation
better so you get a better deal? Might it help you implement better? I believe innovation techniques could be applied to all three. Here is one example: targeting - deciding who to buy.
If you want innovation in your company, hire innovative people. But how do you know if someone is innovative? What do you look for? What telltale evidence might suggest that a person has superior innovation skills? What is the telltale of innovation? I think I know the answer. But, just as with the youth hockey experience, I will need to collect data to be sure. My hypothesis is mental searching speed, an idea that Yoni Stern at S.I.T. taught me. This is a measure of how well you "Google" your own mind and memory for information or experiences when given a task. The task in the case of innovation is to take a Virtual Product (a mental abstract produced through the S.I.T. method), and mentally search your mind to find many productive, innovative uses for it. Whoever can find the most ideas for a given task is more innovative in my view. They make the team. My task now is to select a different team - a team of research collaborators to find and validate the Innovation Telltale, something the Fortune 100 will surely value.
Ideation or prioritization? Imagine you had a choice of being really good at one, but not the other. You could be a master at creating ideas, or you could excel at selecting winning ideas, but not both. Which would you choose?
Two things intrigue me about this trade-off. First, companies spend too much time and energy prioritizing ideas and not enough on creating ideas. Second, the innovation space seems to demand a completely different set of tools and techniques for selecting ideas than the tools and techniques used for making other business decisions. In reality, there is no difference. The tools used to make everyday business decisions should be the same ones used to prioritize ideas.
marketing or R&D? It's a trick question, of course. But it's a useful question for Fortune 100 companies to consider. Has your company made a conscious choice of how it "allocates" this leadership role?
Allocating innovation to one group over the other will yield a different business result. The approaches to innovation by marketing are dramatically different than approaches to innovation by R&D, so the outputs will be dramatically different. The question becomes: which group will outperform the other? Technical-driven innovation or marketing-driven innovation?
Innovation is a team sport, and no one describes this better than Professor Keith Sawyer in his book, Group Genius. Keith's blog, Creativity & Innovation, highlights one of the most significant aspects of successful innovation - that groups of people are likely to be more creative than individuals working on their own. His latest example of Pixar and Disney Animation Studios illustrates this well.
“Creativity involves a large number of people from different disciplines working together to solve a great many problems…A movie contains literally tens of thousands of ideas.” (Ed Catmull, Pesident of Pixar and Disney Animation Studios)
Why are groups so effective? What is the optimal group size? What is the best way to leverage the group dynamic? As a practitioner and teacher of innovation, I have witnessed group innovation many times in many settings, and I observe three factors that might explain why teams outperform individuals at innovating.
Katie Konrath at getFreshMinds.com tackles a common mistake in innovation - packing new features into existing products as a way to innovate - a problem I call "feature creep." Her main point: people pack products to the brim with features to be more innovative. Many believe this is the only way to innovate. Katie believes feature packing is a lazy way to innovate.
Why does this happen? The major culprit is too much reliance and emphasis on the traditional PROBLEM-TO-SOLUTION approach to innovation. We spot a problem in an existing product, service, or situation, and then we "solution seek" a way to fix it. We usually end up adding additional features to the existing product, service, or situation.
Forrester Research, Inc. has released a new publication titled "The CMO's Guide to Driving Innovation." Cindy Commander, analyst at Forrester, has outlined best practices for chief marketing officers to drive innovation across the organization. As part of the research, she interviewed senior marketers from BMW, Equifax, GE, IBM, Johnson & Johnson, LeapFrog, and Samsung Electronics America. In addition she spoke with consultants from Innovaro, InnovationLabs, and PRTM. For companies seeking insights about innovation methods and programs, this report is essential.
Visit the Applied Marketing Innovation Wiki to see a collection of inventions across a wide array of product categories as well as information about innovation consultants. The information is from students at The University of Cincinnati taking the graduate course, Applied Marketing Innovation.
Abraham Lincoln was a tinkerer. He loved all things mechanical. "He evinced a decided bent toward machinery or mechanical appliances, a trait he doubtless inherited from his father who was himself something of a mechanic and therefore skilled in the use of tools." Henry Whitney, a lawyer friend of Lincoln's, recalled that "While we were traveling in ante-railway days, on the circuit, and would stop at a farm-house for dinner, Lincoln would improve the leisure in hunting up some farming implement, machine or tool, and he would carefully examine it all over, first generally and then critically." Abe was a man of considerable mechanical genius. He had The Knack. His patent, Patent No. 6469, a device for buoying vessels over shoals, makes him the only U.S. president to hold a patent.
What kind of innovator was Lincoln? Was he a PROBLEM-TO-SOLUTION inventor? Did he first observe problems and then create solutions? Or was he a SOLUTION-TO-PROBLEM inventor whereby he first envisioned hypothetical solutions and then connected them to worthy problems? My sense is he was both. He was "ambidextrous," a two-way innovator.
Innovating takes teamwork. Properly selected teams using a facilitated systematic method will outperform ad hoc teams using divergent, less structured methods such as brainstorming. How do you create the "dream team" for an innovation project? There are three key factors: team roles, diversity, and processes.