Ingraining Innovation

Make the concept part of your organizational culture

by R. Dan Reid
The Experimental Prototype Community of Tomorrow (EPCOT) was a concept
developed by Walt Disney near the end of his life. Of his new project, he said,
"EPCOT will take its cue from the new ideas and new technologies that are
emerging from the forefront of American industry." 1
A sign posted at the EPCOT theme park in Orlando, FL, includes a quote
attributed to Disney that ties into innovation: "Times and conditions change so
rapidly that we must keep our aim constantly focused on the future."
The concept of innovation has been around for a while, but it has grown and
evolved to become an issue of significant, if not critical, importance to
organizations. It will likely be a key determinant of future success. Yet studies
show that leaders in most organizations have not kept up with the evolution of
this concept, often failing to effectively manage innovation as they would any
other organizational function.

Not clearly defined

7
7
7
7

There is a lot of confusion over what innovation is and isnt. One definition is
that innovation is "the creation of better or more effective products, processes,
services, technologies or ideas that are accepted by markets, governments and
society."2 Another says it is "a novel solution to a new problem." 3
There are many other definitions, including one from the Automotive Industry
Action Group (AIAG) that promotes innovation as "the process of creating new
value with a minimum of waste."4 New value is something that will benefit your
customer and your organization, while minimum waste delivers that value with
absolutely minimal cost and quality loss.
An invention is an innovation, but innovation is more than invention, and it is not
specific to products. An examination of the current body of knowledge on the
subject shows that innovation has many of the elements of a science:
Foundationpatent research and the history of technology, business,
markets and psychology.
Languageideality,5 resources, resource profiling, contradiction and
secondary problems.
Methodsfive-step process, failure analysis, failure prediction, patent
analysis, paradigm shifting, evolving systems and future mapping.
Principlesmore than 800 inventive and evolutionary principles for all
walks of life, such as science, engineering, business, education and
government.6

Why innovation?

As a science, innovation can be learned and managed by individuals and

organizations. Peter Drucker said, "Every organizationnot just businesses
needs one core competence: innovation." 7 In fact, it can be critical to
organizational survival and sustainability.
Clayton M. Christensen examined why organizations fail despite being market
leaders that are willing and able to compete with the best, and capable of
continuous innovations within their industry.8 Heand others sinceidentified
several types of innovation:
Sustainingan innovation that does not affect existing markets.

7
7
7

Typically pursued by industry leaders.

Evolutionaryan innovation that improves a product in an existing
market in ways customers are expecting, such as fuel injection in the
automotive industry.
Revolutionary (discontinuous and radical)an innovation that is
unexpected but nevertheless does not affect existing markets.
Disruptivean innovation that creates a new market by applying a
different set of values, and that ultimately and unexpectedly overtakes an
existing market.9
Disruptive innovations are those that are either so much cheaper than current
offerings that they open a new market or start in a niche the industry doesnt
care about because its too small. Often, the performance of the disruptive
technology grows faster than users needs, eventually catching up to and
surpassing the more high-end or mainstream technologies that are the domain
of industry leaders (see Figure 1).10
Figure 1
Christensen demonstrated how disruptive innovations can put successful, wellmanaged organizations out of businesssometimes very quickly because their
management principles adhere to conventional rules.
Often, these organizations are considered to be innovative by outsiders. They
perform market research, are responsive to their customers and have excellent
R&D capabilities. But they arent interested in disruptive innovations because
there is no market for the technology or because these innovations have lower
return on investment (ROI) and growth potential than the sustaining
technologies they traditionally pursue.
The organizations values, value chain, business model and structure greatly
influence which ideas it will pursue. Marketing organizations will check with
customers to test how receptive they are to new ideas, but often these
customers are not interested in disruptive technologies. This is why the
conventional wisdom to focus on the customer can be strategically
counterproductive.11
Consider Motorola, which attracted many prolific scientists and engineers with
the potential to create wildly successful products. But Motorola management
increasingly failed to effectively channel the talents of and derive value from
these employees, especially in the 1990s and early 2000s.
As a result, many well-known organizationsincluding U.S. Robotics, Research
in Motion (RIM), Cisco and Garminwere founded with help from ex-Motorola
engineers. You could argue that some of those organizations never would have
existed if Motorolas approach hadnt resulted in frustrated engineers leaving to
pursue their innovations elsewhere because the organization rejected them.
Often, this is the case with disruptive innovations. The aforementioned
organizations could have been new Motorola business units. Motorola, not RIM
or Apple, could have led the smartphone and tablet PC categories, and
produced the BlackBerry, iPhone and iPad. But Motorola failed to recognize the
opportunity and the evolving needs of its customers in the same markets it
originally created.12

Elements of success
To innovate successfully, organizations need to have structure, and strategic
and tactical plans. The structure is needed to provide for oversight of the

7
7
7
7
7
7
7

functionfrom idea generation to commercialization. But sometimes,

organizations fail to recognize that innovation is no different than other business
functions. It needs to have:
Goals and objectives.
Organization.
Management.
Funding and accountability for ROI.
Process, methods, tools and techniques.
Process metrics.
Subject matter expertise and talent.13
Some organizations have set up a separate function for innovation and created
new job titles, such as chief innovation officer, innovation manager and
innovation coach. Similar to quality, this function should report to the CEO and
focus on disruptive innovation. As Christensen pointed out, the organizations
structure and current value chain can limit acceptance of new ideas. But
sustaining innovation can remain in the current organization in areas such as
R&D, marketing and engineering.14
A strategic plan is needed to identify and prioritize opportunities. Some
organizations have developed technology roadmaps to articulate the future.
These reflect sustaining innovations and carry the risk identified with disruptive
innovation. The tactical plans are needed to provide solutions to complete the
strategic plan.

Sticking to deadlines
Consumers are always demanding something better. The challenge is to
anticipate and respond to these changes before your competition does. New
products and servicesoften arising from technology that was not originally
valued by the organizationcan challenge the dominance of mainstay
offerings. Disney prided himself on being an innovator, but he also recognized it
needed to be managed, saying, "Everyone needs deadlines." 15
AIAG has identified several models for creating innovation on demand. Some of
these innovation models are more technical than others, and the tools and
methods can be applied to business processes, as well as products and
services, by practitioners, managers and executives. These tools will help
individuals and organizations be more innovativesimilar to how learning the
types of waste enables organizations to pursue a lean strategy.
Work also has begun on developing a guideline to provide common tools and
processes for creating innovation on demand. AIAGs innovation work will be
featured in several sessions at its annual Quality Summit in Detroit in
September.16
Sun Tzu said, "You cannot stop innovation." 17 So you might as well learn it and
be part of creating it. As a process, it fits well with the current skill set of quality
practitioners and could be a significant part of qualitys future.

References and notes

1
2
3
4

Wikipedia, "Experimental Prototype Community of Tomorrow (concept),"

http://en.wikipedia.org/wiki/Experimental_Prototype_Community_of_Tomorrow_
(concept) (case sensitive).
Wikipedia, "Innovation," http://en.wikipedia.org/wiki/innovation.
Innovation Wiki, "Definition," http://innovation.wikispaces.com/definition.
Automotive Industry Action Group, "Future of Quality: Innovation as a Process

5
6
7
8
9
10
11
12
13
14
15
16

Networking Session," www.aiag.org/staticcontent/files/future of quality

innovation as a process 3-7-12.pdf.
Ideality is the ideal state and is defined by all useful functions of a solution or
system divided by all harmful functions. For more information, visit
www.ideationtriz.com/source/2_ideality.htm.
Dana Clarke, Structured Innovation: Foundational Elements, Applied Innovation
Alliance LLC, 2005.
Peter Drucker, Management Challenge for the 21st Century, HarperBusiness,
1999.
Clayton M. Christensen, The Innovators Dilemma, Harvard Business School
Press, 1997.
Wikipedia, "Disruptive Innovation,"
http://en.wikipedia.org/wiki/disruptive_innovation.
Christensen, The Innovators Dilemma, see reference 8.
Ibid.
Peter G. Balbus, "Business Innovation as a Driver of Corporate Growth,"
presentation at the 2011 Business Innovation Conference, Oct. 10, 2011.
Clarke, Structured Innovation: Foundational Elements, see reference 6.
Christensen, The Innovators Dilemma, see reference 8.
Only WDWorld, "Quotes From Walt Disney at the Magic Kingdom,"
www.onlywdworld.com/2010/08/quotes-from-walt-disney-at-magic.html.
See the AIAG website at www. AIAG.org for more information on its innovation
classes, innovation project or Quality Summit.
iWise, "Sun Tzu," www.iwise.com/sun_tzu/page/5.