Innovation for the Sake of Innovation

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“Our whole company is founded on the principle that there is something very different that happens with one person, one computer.” – Steve Jobs

The May issue of Fortune Magazine included an article called, “Startups . . . Inside Giant Companies,” which presented the latest approach companies are using to drive innovation.  The article included examples of how companies like Coca-Cola, GE, and Tyco have implemented programs to drive innovation back into the organization.  As I read the article, I couldn’t help thinking here we go again – another management fad destined for the six-sigma scrap heap.

The author highlighted the systems companies are using to make their cultures more innovative by setting up internal startups to bring new ideas to market and rewarding people for new product ideas.  The approaches used by the companies include idea pitch parties, internal venture capital groups, and growth boards that award funding to the best ideas.  It was noted, for example, that GE now has 3,500 of its 300,000 employees now involved in the process and expects to increase that number to 35,000 by year-end.

Innovation Doesn’t Guarantee Success

The success of companies like Apple, Google, and Amazon has created an infatuation with innovation to the point of being distracting and detrimental to running the business.  Innovation is absolutely critical to the success of an organization, but it must be focused on improving customer service and addressing problems that interfere with achieving the vision.  Uncontrolled innovation leads to very creative ideas that distract people and result in square-peg results. 

The six-sigma thoughts that kept popping into my head while reading the article were related to the black-belt who grabs the glory for “solving” a problem while those who participated in the effort – and did much of the work – get little or no recognition.  Those dealing with the problems on a daily basis are also shown by management that they are not respected enough to be taught how to solve problems on their own and that it takes a special person to stay focused and find solutions.

I can’t help but think that the same thing will occur within many of the companies listed in the article.  As the people with the ideas are applauded and rewarded by leaders, those left running the business – and dealing with numerous problems on a daily basis – are largely ignored and shown that what they do is not important. 

Another potential distraction caused by the heavy focus the referenced companies place on innovation projects is that, by touting the number of innovation projects, people and teams will start putting forth weak and unclear ideas just to raise the numbers.  If company executives focus on the numbers, team leaders will start padding the numbers to make themselves look better.

Aligned Innovation

What truly innovative companies understand is that innovation must be ultimately focused on serving the customer.  On the production line, Toyota removes the doors after painting because it allows team members to move in and out of the car quickly and easily and keep up with takt time.  This is an innovation that addressed a problem of keeping up with increased demand.

When it comes to new product development, Apple seems to understand this concept better than pretty much anyone.  Following the purpose of one person, one computer, Apple seeks to understand its customers at a fundamental level rather than merely a product level.  Customers generally do not know what is possible, so merely asking them what they want will lead to information about the products and services they are currently receiving.  If asked what they wanted with personal computing, though, customers would have probably responded in terms of their laptops.  Focusing on the one person, one computer purpose, though, Apple dug deeper to understand problems people have every day that could be addressed by having a computer with them everywhere they go.

Whether process or product innovations, the key is to understand how they address problems for the internal or external customer.  Cool ideas mean nothing unless they help the address problems.  When the effort is controlled by focusing it on the company’s purpose, the creativity of people can be released in the right direction resulting in far greater success with new products, processes, and services.

The Smarter Company

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When discussing the most innovative and successful companies over the last decade, people will most likely mention names like Apple, Facebook, Google, or RIM.  These companies are known for utilizing innovation in products, processes, services, and technology to give them a distinct advantage over their competitors.

But how do these companies maintain their edge?  Are the people who work at Apple or Google really any smarter than those who work at other organizations?  It's no secret that these companies have their pick when it comes to recruiting, but is that what keeps them more innovative and profitable than other companies around the world?  In my opinion, yes . . . and no.

It Takes More Than Talent

I will never downplay the importance the talents of people to a company's success.  Companies like Google and RIM are staffed with very smart and talented people which has undoubtedly helped them to introduce highly successful products year after year.  But without the leadership, culture, and systems that encourage and support innovation, there would be no way to consistently turn the ideas of these people into commercially viable products.

I have worked with a number of companies throughout my career and met many highly talented people who, for a variety of reasons, were unable to utilize their talents effectively.  In contrast to companies like Apple, the cultures and systems in many of the companies for which these people worked interfered with their ability to use their creativity.  The really sad part of the story is, the longer this went on, the less the people were willing and able to be innovative.  It's as if the ability to innovate atrophies when not used or developed over time.

It's the Company that's Smarter

The difference between the average company and a company like Apple, for instance, is that the leaders at Apple understand that innovation is a key to their success and they've created an environment that encourages creativity.  They have remained focused on creating a culture that fosters the use and continual development of team member creativity, and aligned systems to quickly turn their ideas into products.  In my opinion, this makes Apple a smarter company than most.

It is strange to think that a company would hire someone because of their talents and allow barriers to exist that prevent the person from utilizing these talents, but it happens fairly often.  It's not intentional, but for a variety of reasons, the environment in many companies encourages behaviors that interferes with success.  Mismatches in purpose, strategies, and values lead to confusion, frustration, and de-motivation of employees, interfering with sustained levels of success for the company.

Becoming Smarter

So how do leaders make their companies smarter?  How do they create the type of environment that enables people to utilize and develop their talents in a way that leads to success?  It obviously depends on a company's particular circumstances, but involves addressing one or more of the following areas:

• Purpose:  Be clear and consistent on the company's fundamental purpose.  Why it exists, what need it fulfills for its customers, and why it is different than other companies that serve the same markets;
   
• Strategies:  Determine, clearly communicate, and implement the best way for the company to compete in order to be successful (i.e., achieve its purpose).  Will it compete on the basis of innovative products and services?  Low costs?  High quality?  Assure that the company's culture and systems are aligned with the chosen strategies;
   
• Values:  Identify the company's personality.  Be very clear on the DNA of the type of employee who will make the company successful in the achievement of its purpose;
   
• Hiring:  Take time to hire the right people with heavy emphasis on a person's fit within the organization's culture.  Make sure that, once hired, they are able to utilize their talents effectively;
   
• Train/Develop People:  Continually develop the collective skills of the company's team in support of its business strategies;
   
• Foster Teamwork:  Identify and remove the barriers to teamwork on a continual basis in order to get the organization acting as one and focusing on common objectives;
   
• Value & Respect People:  Assure that people feel respected and valued for their contributions to the company's success.  Create systems and develop leaders that will encourage participation in the achievement of objectives:
   
• Continually Refine Environment:  Develop and refine the company's culture to assure it is aligned with business strategies.  Assure that the environment encourages, rather than hinders, implementation of the strategies.

I don't believe that a company needs to be innovative in order to succeed.  It is much more important for a company's offering to be "right" than "fast."  With that said, however, the faster a company can offer a new product or service that is right, the more successful it will be.  Determining the strategies and assuring that all internal systems and values support the implementation of the strategies will make the company smarter.

So to answer to the question:  I don't believe that the people at Apple or Facebook are any smarter than those at other companies, but I do believe that Apple and Facebook are smarter than other companies.