Most Innovations Succeed or Fail in Execution
At a recent innovation conference, a speaker asked how many of the 75 people present in the room were short on promising ideas to implement. One person raised their hand. When asked how many struggled with execution of their best ideas, up went most of the hands in the room. A couple of months later I asked a colleague doing innovation for a large enterprise what kept him up at night. His answer: “All of these great ideas and they just don’t seem to go anywhere”.
At Blue Rocket, we specialize in designing and engineering apps and experiences for organizations focused on new product development and innovation. Here is why execution is such an important part of success.
The Front-End Matters, But Leading Change is Critical
Sure, there is ample research to show that an empathetic understanding of customer needs, and the use of those insights is essential to success 1,2. But that is only a start. Years ago, I sat down with the executive leading an innovation organization for a Fortune 100 company and suggested we amp up the change leadership skills in the group. She looked at me for a second, paused, and asked… “I don’t understand, why would we do that?”. The organization was gone within a year.
The simple answer to her question is that innovation requires organizations and their people to do new and different things to execute clever ideas. Further, to succeed at influencing organizations to do new things requires that you ensure the skills, motivation, and confidence to win are in place. A recent HBR article3 identifies the transition from the innovation or R&D lab to the operation as the phase in which most innovations die. Your idea may be just fine, but the ability to engage your organization to execute the idea is likely to need more attention. This is much more than selling the board. You must understand your whole solution and the implications of executing it.
Successful Innovation Requires Change on Multiple Dimensions
All you need to do is to take a tour of innovation research and the need to master new ways of doing business becomes clear.
In his book “Ten Types of Innovation”4 Larry Keeley describes research with his colleague Vijay Kumar. They compared organizations that were “average innovators” with those that were “top innovators”. What they found was that the top-innovating companies innovated across more dimensions of their product and business system than did the rest. Moreover, the number of distinct types of innovations companies used was correlated with their overall financial performance. They lay out 10 types of innovation from internally focused dimensions like profit model to externally focused dimensions like customer engagement (see sidebar).
Keeley’s research suggests that you most innovate across at least 2-5 dimensions of the overall business system to be likely to succeed. How many depends on the magnitude of disruption you are targeting. For example, you might need to innovate your product, your distribution channel, and your profit model – perhaps more. No wonder big innovation is hard, especially for big companies. You must orchestrate simultaneous change across multiple parts of your business system.
Do you have the pull to create a new distribution channel for your products? Can you manage the potential for resulting channel conflict? The same goes for business models. If you’re a product company moving to a service model or subscription model you not only have to collect money differently, but the change must ripple through your accounting and forecasting systems.
Use Functions As-Is, Adapt, or Create
One of the most consequential choices you will make as an innovator is whether you can operationalize your product through existing functions, whether you need to convince one or more function owners to adapt to your innovation, or whether you must create a new function. Hopefully, you can use some of your organizations operations as is. However, each type of innovation you pursue will require you to trace the execution of that innovation through your existing business system to identify the required changes and additions. Will the function owner be willing to change it? What is in it for her? At a minimum you are offering risk… what else have you got to offer? If the function is a cost center how will any increased costs be made up in her budget?
Sometimes, it is not feasible to create a viable value proposition for function leaders, or it just doesn’t make business sense for them to create the modifications you seek. In these scenarios you need to build a parallel or add-on function.
Let me share an example of where I got this all wrong. I was working on setting up the execution of a digital innovation in a big company. The product was a great idea, well received by consumers, and would benefit the business. What could go wrong?
I chose to use the central IT organization to create the mobile infrastructure, application, and integrate with server-side functions. I liked the team, it’s leaders, and really liked the idea of forging a relationship between our two groups. Here is the problem. Most large IT organizations do not build bleeding edge consumer digital products all day every day. They either must train or staff to be able to adapt. In most enterprises it is very difficult for teams to keep up with recent technologies, platforms, and frameworks. Often these developers go from internal systems to external systems as assignments change, sometimes over the course of many months or even years forever keeping them in catch-up mode. Furthermore, they will have priorities and motivations that are quite separate from your project.
After a year of attempting to execute this way I changed course and brought in a top-notch mobile development house. They worked at a completely different clock speed and with a risk tolerance that matched the project. Within 3 months we had made up the lost time.
One caveat to this approach is that you must maintain architects who understand your legacy systems as part of your program, especially when you need to bring in outside talent. External teams or new employees will have no familiarity with how to work around legacy systems. In a future post, we will break down the cost-benefit of outsourcing (onshore) vs. ramping up an internal team.
It turns out that the path I was on with my IT group is a crowded one. When queried about the biggest challenges facing product and marketing executives working in the connected home space the top challenge they identified (59% of them) was building the application. Yet, more than three quarters of them continue to plan to build internally5.
When You Must Walk Away
Sometimes there is no way to execute a promising idea from your organization. The sooner you recognize this and walk away, the better. If your solution requires digital marketing to succeed and your current marketing department doesn’t do this, it is time to pause. Can you incent them to ramp up or support you sourcing that function in parallel? If not, walk away.
What if you are an insurance company that distributes through independent agents? This is a channel that is tuned for a very specific type of product and may simply not be adaptable to your new solution like selling widgets or car safety kits. Agents are paid for policies. If you are asking them to do something that does not help sell more and bigger policies faster or threatens their relationship with their client, you may not get much traction. This is the choice point. Do you have the flexibility to create an alternative channel? If not, walk away.
Are you thinking that in these examples you should just enlist the most influential executive you can find to force the issue? It might be worth exploring with the right executive, but generally this is not a great plan. It will isolate your team and create compliance with low motivation. Even worse, it makes your organization more fragile. When that executive ultimately leaves, you’ve got problems.
How to Become an Execution Wizard
Don’t let the challenges of execution scare you off. Some of us thrive on this stuff, and you may too. Here are three essential steps on the path to becoming an execution wizard:
- Engage cross functional teams in your investigations6. Bringing in good minds from across your business system makes you more effective at identifying more types of innovation to pursue. A multi-disciplinary team is also more likely to identify the implications of your innovations to the operation. They can work with you on ways to design effective solutions and test them. Just as important, they become advocates to work through resistance to change.
- Provide innovation discipline across the business system. Systematically target your types of innovation, then trace them through your business system. Identify your areas of risk, then prototype test and refine each of these areas just as you would your core product. This step is critical for two reasons. First, it enables you to remove risk from the program sooner and enables you to design how your program will be implemented well before you start implementation. Second, it will enable you to identify problems that are insurmountable sooner, triggering you to pivot or move on much sooner than you would otherwise.
- Engage executives. Top executives often play a key role in innovation programs6. It isn’t just about keeping your hand in their wallet. It’s about tapping their expertise on how to engage and connect with the wider business system. As they consider some of the concepts you are pursuing their view across the business enables them to identify key people and functions that you will need to work with. If you need to build out new parts of a business system, your top executives and boards can provide invaluable help sourcing it with their wide business networks.
The Execution Challenge Is Worth It
Throughout this post you have seen how successful innovation requires embracing complexity. You must lead change, you must innovate across multiple dimensions of your business, and you must orchestrate a new or modified business system. The good news is that this complexity brings two great rewards. The first is that it provides a barrier to your competition. The more dimensions on which you innovate, the harder it is for others to understand and copy what you have done. The second is that systematically innovating across your business system greatly increases your chances of success.
Blue Rocket is available. Contact us anytime. We’re here to help.
- Ottum, B., Moore, D., 1997; The Role of Market Information in New Product Success/Failure. Journal of Product Innovation Management, Volume 14, Issue 4.
- Bacon, G., Beckman, S., Mowry, D., Wilson, E. 1994; Managing Product Definition in High-Technology Industries: A Pilot Study. California Management Review, Spring.
- Kirstner, S. 2017; The Stage Where Most Innovation Projects Fail. Harvard Business Review, April 11, 2017.
- Keeley, L., Pikkel, B, Walters, H. 2013; The 10 types of Innovation The Discipline of Building Breakthroughs. Wiley.
- Taylor, W. 2017; 2017 Survey of Connected Home Product Professionals.
- Cooper, R. 1999; Invisible Success Factors in Product Innovation. The Journal of Product Innovation Management. Volume 16, Issue 2.