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Innovation Now! – Fast Company – Evan Luckey

by on October 16, 2007

When examining this article, written in 2002, by Gary Hamel, it is important to understand the economy of that time. During the previous decade earnings were “deliriously” driven upward by external market factors. The economy was then on a downturn, a recession. Hamel’s contention is that if your company is to increase revenue and move forward, the only answer is innovation and radical thinking. Hamel makes me laugh when he states that your customers may already be drinking the most beer their going to drink or eating the most hamburgers their going to eat; You can’t expect to grow revenue with the same old customers, same old products through the same old channels. To increase revenue you need “jaw-dropping” new products and services. And to do that, radical thinking must be brought to the table.

Hamel’s idea of radical thinking is not the same as the high risk and ill-conceived notion often equated with traditional CEOs. Hamels’s thinks of radical idea as one that meets any of the three criteria:
Change’s customer expectations
Change’s the basis for competition
Has the power to change industry economics

Of course, meeting any of these criteria is extremely difficult and Hamel further explains organizational belief systems that keep companies hostile to innovation:
Variety is bad.
The company is the business model.
Change starts at the top.

For companies to be innovative Hamel argues that companies need to embrace variety, positively challenge the essence of the company, and capture fresh ideas from the bottom. However, while this may foster innovation, it doesn’t generate ground-breaking ideas. Hamel ends his article defining four qualities of innovative persons. Innovators challenge beliefs that everyone else takes for granted. That means, asking the stupid question no one else has. The second quality is spotting the unnoticed already happening trends in the market. This means, predicting the future. Third, Innovators are able to express customer’s unarticulated need. This means, “learning to live inside the customer’s skin.” And the fourth quality is being able to think of their companies as “portfolios of assets and competencies.”

I really liked Hamel’s article. I agree that most companies are not setup for innovation. I think mainly it’s the culture of the company. You are not going to innovative unless you have the ideals of innovation deeply rooted into the organizational culture. You must beat innovation into the ground. It must permeate the company. Is this why we see a lot of innovative products and services from start-ups and new companies?

In addition, managing the innovative ideas is a challenge. In traditional organizations, for an innovative idea to make it off the ground it has to make its way up the chain of command until someone agrees to invest the money and resources into the idea. How many people does this idea have to go through? Aren’t the truly innovative ideas at first thought of as backwards, crazy and irrational? “Let’s sell coffee for 4.00 bucks!” How do organizations expect these ideas to make it up to the top? How do you get your managers to listen? A lot of companies, Google as an example, allow employees to work on any project of their choice up to 10% of their time. I believe they also have chances to sell these ideas to upper management. And I think we can agree that Google has come up with some pretty innovative products.

Additional Resources – by date (I love LexisNexis!)

It’s interesting to not the increase in search results as the years progressed. Innovation is nothing new, but it’s being talked about A LOT more.

“3M’s problems in the office of the future.” Business Week. October 13, 1980.

Drucker, Peter F. “Principles of innovation: the do’s and don’ts; excerpt from book Innovation and Entrepreneurship.” Modern Office Technology. February 1986.

Russell, Robert D. “Innovation in organizations: toward an integrated model.” Review of Business. September 22, 1990.

Guinet, Jean; Pilat, Dirk. “Promoting innovation — does it matter?” OECD Observer. June 22, 1999.

Past week
Bajarin, Tim. “How Platforms Drive Innovation.” PC October 12 2007.

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