Posted onin Leadership/Management
Innovation makes or breaks companies. Someone takes a leap of faith and sends their idea out into the market where it catches fire and competitors materialize out of thin air, just to sell knockoffs. But nothing is forever, and over time the innovation is no longer so shiny and new. Suddenly someone else takes their own leap of faith and the previous innovation becomes irrelevant.
Mark Dajani, CIO of Kraft asks, “How do you know when an idea has peaked?” …and when what was once innovative should be reinvented or discarded? (Making your Business Hungry for Change and Innovation, CIO Talk Radio: September 1, 2010 7:50 – 9:01) For example, Polaroid, the maker of the famous instant camera of the 1950’s failed to successfully enter the digital camera market in the 1990’s, and ended up filing for bankruptcy in 2001. What happened? According to Ranjay Gulati (Harvard), an expert on innovation, Polaroid was 42nd in coming out with a digital camera. The company was in a “competency trap,” and unable to grasp that future innovation necessitated reinvention. (7:13 – 7:35)
Innovative change should not be for change’s sake, but must be built around customers and Ranjay identified two sources of such innovation, exploration and exploitation. Exploitation is innovation on a small scale, close to the customer, manipulating features such as packaging or price. (18:20 – 18:30) One example is bagged, ready to eat salad greens, a convenience for today’s busy health conscious consumer. (9:50 – 10:50). Exploration involves expensive R&D that tries to make customer based innovation predictable, but is vulnerable to “fast followers,” i.e., those companies who ride the wave of innovation on the coattails of the explorers and take advantage of innovation without making a significant investment. (22:45 – 24:00)
Marketers may lack the foresight to understand an innovative product, so as Kraft CIO, Mark Dajani comments, innovations are often introduced by people who stood up and took risks – not necessarily by looking at what customers say they want – but rather, by trying to fill in the “white spaces” or blank spots, which no one else senses. (35:28 – 36:30)
As an IT leader Mark deals with the paradox of keeping a huge company reliably and predictably producing products of consistent quality, and yet somehow encouraging innovation. (20:32 – 21:31) Globalization complicates things, with larger, more diverse new markets that require new tools, such as web crawlers to read the chat and blogs of product discussion groups. (33:00 – 33:39) Bottom line, according to Mark, the IT leader and his/her IT must “own” change. While Kraft has to tell workers how to do a job, room must be allowed for experimentation and innovation, while keeping the business moving. (11:44 -12:54) It is the CIO’s duty to create a culture where innovative ideas flourish. And in fact, Mark and Kraft have established a group dedicated specifically to nurturing the ideas of employees. (41:30 – 43:04)
SOME THINGS TO PONDER: While bagged lettuce is certainly a great customer centric idea for those of us too busy to clean greens, should that be considered TRUE innovation? Can you create a culture that produces ground breaking innovations, or IS INNOVATION A RANDOM LIGHTNING STRIKE – an insight from nowhere that fills an unseen “white space” you never knew was blank?