How does innovation happen? Most company’s struggle to understand how innovation works, often confusing creativity with innovation. In today’s tacit, knowledge-based creative economy, innovation and differentiation rarely come from one distinct source. Rather, innovation evolves from:
- new ways of thinking,
- new business models,
- new processes,
- new organizations (or new collaborative inside/outside team structures),
- and new products (offerings including services)
In his classic book – Innovation and Entrepreneurship, the late Peter Drucker found seven sources of innovation. The first four sources were internal, inside the enterprise, whereas the last three are external, outside of the company.
1. The Unexpected
3. Process Needs
4. Shifts In Industry And Market Structure
5. Demographic Changes
6. Changes In Perception
7. New Knowledge
A good description of the seven sources is here. Unfortunately, not everyone stumbles into innovation like the legendary 3M Post-It notes, or the unexpected discovery of Aspartame, but innovation can, and should be pursued in a systematic way.
Larry Keeley‘s Ten Types of Innovation: The Discipline of Building Breakthroughs gives us a glimpse into how that might be:
Here is an added insight from Keeley and friends: the things we love in the world–the services and systems we value and use–are the ones that make it easy to do hard things.
What does all of this have to do with business results?
Clearly there is plenty of room for innovation when it comes to designing superior, differentiated experiences for customers. Every interaction with your customer can be differentiated, integrated with the purpose of the customer. Make it easy to do business with you, said Jakob Nielsen, the web usability expert, many years ago.
What about the power of ecosystems? At the individual level, ecosystem thinking can help you create better ideas. it’s all about disorganization.
Ideas need to be sloshing around or crashing in to one another to produce breakthroughs:
- Research shows that the volume of ideas bouncing about make large cities disproportionately more creative than smaller towns.
- Having multiple hobbies allows your brain to subconsciously compare and contrast problems and solutions, forming new connections at the margins of each.
- Similarly, reading multiple books at the same time vs serially lets your brain juxtapose new ideas and develop new connections.
- Wandering minds are more creative.
- Studying a field “too much” doesn’t limit creativity — it does the opposite. More ideas banging about just produces even more ideas.
- The “accept everything” mantra of brainstorming doesn’t work. Debate is far more effective. Let those ideas fight.
- ADD and bipolar disorder are both associated with greater creativity. When you’re drunk or exhausted your brain is poised for breakthroughs.
- Even with teams, it’s better to mix up experience levels, familiarity with one another and other factors to keep things rough around the edges.
And at the organizational level, there’s ecosystem strategy. That’s a post unto itself…
– How do you make it easy for the customer to do business with you?
– What outcomes do you want to see?
– What is required to achieve those outcomes?
– What must be done? What needs to change?
– How do we make innovation a embedded process?