By Anian Christoph Wimmer
Imagine, you could fly. There would be a giddy period of exploration at first. You would fly and fly and fly! But then, you would also return to your life, your reality so far. And invariably, you would be on the way to somewhere and catch yourself grabbing the car keys or checking that bus timetable – when in fact you could just fly there.
This is exactly the point in time many businesses (and governments, and institutions) are at when it comes to using the incredible means of digital communication available to radically innovate their game, their product, or just their day-to-day operations. What is lacking is some real “Ideas Engineering”.
“Ideas Engineering? What is that? You mean ideas for engineering, right?” Not really. I wish I had 1 € for every time I got asked that. To be fair, it is exactly the question I would have responded with. But Ideas Engineering is a way of making radical innovation work sustainably. In this post, I want to outline the three guiding principles to making radical innovation work for you.
To really add value to any organisation or enterprise, the interlinked questions of a) how you source creativity and b) then work it to innovate and c) steer, audit and review that process need to be answered convincingly. And you always need to take the long(ish) view: Innovation is a long-term investment, after all.
Irrespective of whether you feel like the Knowledge Economy is a reality or not: It’s common sense that businesses need to innovate to stay ahead. The best companies do it because they recognise that creativity breeds innovation. And give their staff at least 10% of working time to just play with projects they like. But they also do it sustainably, and with a keen eye to upholding fiscal responsibility. If creativity is the mother of all innovation, frugality – or at least fiscally sound and efficient principles, may well be its father. In fact most successful innovators are incredibly focussed, hard working and – you are going to like this one – conservative.
Frugality – The (paradoxically) Big Fat Caveat
And that point is also one big fat caveat that bears explaining in a bit more detail: Your numbers need to be in order, that goes without saying. Your operational realities must be efficient and compliant, sure. And yes, all of this transparently so. But even that may not be good enough when you are competing globally: You also need to make quality last. Hence the use of the word frugality.
In essence, you need to have a long-term strategy in place that ideally does not reward short-term shareholder value at the expense of the business, but fosters the strategic nimbleness and overall operational health of the enterprise. That is what makes many family-owned businesses last. And by the way, that is what a good leader will provide. The classic example of course is the Mittelstand, the backbone of the German economy. Often family-owned, small and medium enterprises that produce high quality products for the global market, but also with a growing recognition they do so for the economy in which they manufacture or operate otherwise.
As Time Magazine reports – calling Germany a China of sorts – and the Economist now blogs to ask the experts, one of the key success factors for Germany’s economic recovery is what the Anglo lexicon calls frugality and/or even austerity – and what Germans, but also Swiss, Austrians, Dutch and Scandinavians see as a reluctance to overspend. As the Economists’ readers, including IFO-President Hans-Werner Sinn, point out, Germany has learnt to stop exporting its savings. That might be the opposite of what the spend-to-grow-school of economic philosophy dictates. But so far, it has served the Germans (and the Swiss, and others) very well in the long run.
Three Principles to guide the Engineering of Ideas
Now, why praise frugality like that? You may well ask. To be sure, frugality is not a necessary precondition of innovation. But without it – or at least very sound economic principles operating within an equally sound long-term strategy – innovation will usually either be dismissed as a fancy pipe-dream – or bring down the house with it. History is littered with companies that failed with innovative ideas. So yes, it is worth emphasising this caveat: Innovation can and will fail – unless managed right. Hence, of course, Ideas Engineering. Let me explain. Provided the big fat caveat is accounted for, it provides a natural, but also controlled, approach to fostering, sourcing, and managing innovation. The three main principles are:
- The Source is Everywhere. So is the Market.
- The Customer is willing to pay for Quality.
- Make your Strategy fit the Customer’s reality. Not vice versa.
If and when you apply these principles to Engineering Ideas to the operational “value chain” of your product or service design and delivery, you can successfully innovate.
The Source is Everywhere. And so is the market.
Don’t buy the old “innovation means turning problems into ideas” chestnut. It’s neither that simple nor that easy. That’s the bad news. The good news is that it is also – in a way – easier. As Alexander Pschera has pointed out on this blog, you can and should apply the principles – if not the practice-, of crowdsourcing your product development. I suggest you (re-)read his post on this important aspect.
Furthermore, internally, fostering creativity requires an approach that supports it, but also makes it clear that there is no inherent value in “being creative”: The measure of the value is its measurable outcome. (That’s also one reason why most successful innovators are conservative). Deadlines, and a bit of creative pressure never hurt anyone, except perhaps the most talented writers or classical composers.
Once you start both crowdsourcing externally and internally fostering ideas, then your structure needs to match the input: It’s about curation, adaptation, quality control. In other words: reaching that sweet spot where you neither stifle good ideas nor oversell mediocre ones that have major downsides. Again, this is where the premise of frugality or sound management at the very least must come in. You need to have good risk assessment, a real knowledge of the product, the market, the competition. All whilst maintaining day-to-day business, of course. But the point is: You need to have all of these things even if you don’t want to innovate. So it’s not an excuse. In fact, it’s an opportunity: If you start to integrate Ideas Engineering into your workplace, you will also need to look at the totality of how things are decided, accounted for, and how they need to be improved to be stable operationally. Again: The source of innovation can be everywhere.
The Customer is willing to pay for Quality
Anyone with a shred of experience knows that is a truism. But this has serious implications for how you foster creativity internally and manage the process of innovation externally – for instance in your branding philosophy and the traditional marketing work. But also in terms of where you draw on innovation – for if it does not come to you, then study the innovators.
When first Japanese, then Korean and more recently Chinese cars started to rival European models in quality of build and engineering, only then did competition get real. Now yes, branding matters, but I firmly believe it always only goes so far if your product is crap – despite what critics of soft drink manufacturers might say. Remember: innovation is a long-term investment. One example of this is the vacuum cleaner business and the story of radical innovation of Dyson.
In short: If you want to corner the “cheap and cheerful” segment of the market, don’t try and be the innovator.
Make your Strategy fit the Customer’s reality
This final guiding principle to Ideas Engineering is the most challenging. Or at least it has the most repercussions for the actual work of engineering the ideas, in other words: what happens when you apply these principles to innovate – and which will be the subject of many a separate post, no doubt.
Just to be absolutely clear: By strategy, I mean both your strategy in approaching the management and engineering of ideas, but also your overall long-term planning. When you are working to a) source, b) value and c) implement ideas for innovation, then the overarching goal should always be the customer, and her reality. Not to unduly single out any company, but just to demonstrate that this happens to the best of them: Not doing this is of course the classic Microsoft mistake.
In some cases, you are your own customer, of course. But the principle applies anyway. Radical innovation always works best when it works its way back from the customer and their reality – and to the customer and their reality. And it is another reason why the old adage “innovation means turning a problem into an idea” particularly no longer holds true in the age of digital communication. You can innovate before there are problems. The requisite tools of communication are there. Use them – or get someone to help you use them – and you may well start flying places where others can only get to on foot.