My engine is spinning, I’m burning gas, but I can’t make innovation progress

By Richard Eichen, Return on Efficiency, LLC

Companies need to innovate, as their once stable, well defined markets evolve from CPG to FCPG (Fast CPG) and then morph into consumer electronics. Banks are going from long-term retail relationships to online and Digital presences, nameless and faceless with a race to the bottom on fees.  Still, companies move too slowly, are comfortable with incrementalism, and leave space for upstarts to enter the market, some to grow, and most to be acquired and buried in Big Corp.

The bottom line is: companies move at the pace of their largest revenue stream and only when faced with an existential threat.  Apple did not develop the iPhone because they thought phones were a great idea (actually, they thought the opposite).  Phones were becoming platforms to download music, threatening the iPod which was then their halo product.  Potential extinction facilitates clarity and focus.

Innovation is about audacity.  On this 73rd anniversary of D-Day, let’s see what was innovative and therefore broke the centuries old static siege mentality mold:

  • Big Data analysis to predict the exact time and day for the right tide.
  • Floating artificial harbors, providing a logistics capability where none existed before D-Day
  • A 3 inch pipe under the English channel providing vehicle and aircraft gas in quantiles to keep the advance moving post initial invasion
  • The Higgins landing craft, created iteratively by a startup, and including the IP contributions of African-Americans and women
  • With water behind them, the Allied soldiers were fully committed in every sense of the word

It took having their backs to the wall, no room for failure or a second go at it.  Successful startups are like that, all-in, innovate big; no way back. Maturing technology companies retain that culture until they get too large and outgrow their founders. Big companies typically live behind their ramparts, feeling safe from a siege, until an innovation D-Day occurs.

How to recognize if your company has a siege mentality:

  • Your Executives, especially the SLT, self-reinforce how great the company is, how crazy the competitors are and who are these upstarts anyway?
  • Middle Management thinks long-term revenue is solid (for now), so they can focus on short term tactics
  • Executives are promoted through the company’s culture filter, absorbing any risk aversion or fear of failure and adopting the velocity associated with your best selling products.
  • Engagement and commitment to ideas have a political cost if they do not support or even challenge that biggest revenue stream. Promote these radical ideas – to a point, but don’t fight for them without paying a price.
  • New product initiatives are run through open-spaced new product teams; nonlinear breakthroughs are typically not funded beyond 1st stage exploration.
  • Innovation by acquisition usually buries the innovation but it does keep a competitor from having it. At best, acquired IP is leveraged into other initiatives.

So the question I’m often asked is, “OK, do I hire an Innovation Leader from outside the company?”  The expected answer is “yes, even from outside the industry”, but a more practical answer is “search high and low for a leader who has the mental agility to be promotable but not so ingrained in your culture they are self-limiting. Put them under a different compensation plan, and put their back to the water.  Tell them if they start to do too many things ‘our way’, they’re toast.  And finally, tell them you want 3 breakthrough products to fail fast in the next 6 months, and 1 breakthrough game changer in 12.”

One last D-Day reference, proving our point:

“This operation is not being planned with any alternatives. This operation is planned as a victory, and that’s the way it’s going to be. We’re going down there, and we’re throwing everything we have into it, and we’re going to make it a success.” — General Dwight D. Eisenhower

Eisenhower was not known for being  a tactical genius, he was a deep and methodical planner. He knew how to get leaders with crazy off the scale egos to cooperate, if grudgingly.  And he had an absolute sense of mission and timing, and doing it big. His boss, Marshall, instilled a culture of rapidly identifying and replacing failing or underperforming commanders, i.e. Generals who followed the book but could not win.

Who else falls into this category, who was also truly innovative? Steve Jobs. On this 10th anniversary of the iPhone, here is a summary of what is was like to work on this breakthrough project:

“Because you created a pressure cooker of a bunch of really smart people with an impossible deadline, an impossible mission, and then you hear that the future of the entire company is resting on it.”  – Senior Apple Engineer.

Combine audacity, creativity, an existential threat, smartest people, 1 year to roll it out – this is how a leader turns organizational energy into innovation motion.