“So how frequently do you guys innovate?”
If you want to really amp up the tension when talking with corporate executives about innovation — which I think it often a very valuable thing to do — that’s a great question to toss out onto that beautiful rainforest-reclaimed mahogany conference table you’re all sitting around…
It’s a real attention-getter, that one, as it rolls, Molotov-cocktail-like, right into the middle of the usual miasma of polite conversation about innovation teams, innovation projects, innovation labs, innovation funds, innovation hibbity-ha, innovation shabbity-ho, etc.
“How frequently do you guys innovate,” for me, isn’t a rhetorical question: it’s a genuine enquiry into the “innovation tempo” of a company — the pace at which a company successfully brings new things into the world.
Put another way, what I’m really asking here is how frequently does the company actually establish a new product/service out in the real world that is new or different, and that has a significant impact.
It’s a pretty simple question, really…
The Typical Innovation Tempo of a Big Corporation: Glacial
So now, Pop Quiz: What is the usual answer to such a potentially impertinent — but also very pertinent — question?
Answer: Even in the most successful, and sometimes most innovative companies, the answer — which usually comes, quite naturally, from the most senior person in the room — tends to be vague, fuzzy, and much more poetry than prose.
Which is funny, because I think it’s a fairly straightforward question, like, for example, “How many points did Boston Celtics (basketball) star Kyrie Irving average last year?”
The answer to that question, BTW, is that he averaged 24.4 points per game.
And we know that because, you know, the NBA keeps track of such things.
So given that, why, we have to wonder, are companies so clueless at keeping track of the tempo/rate/frequency of the one thing (innovation) that arguably will have the greatest impact on shaping their future?
I think part of the reason it’s so hard for corporate execs to answer this question is because much of what passes for “innovation” in today’s big companies is more accurately described as “innovation activity,” as opposed to real innovation, which is innovation/impact.
Obviously, it’s much harder to measure — and frankly, riskier for innovation teams to track — those rare innovations that get established out in the world than it is to track all of those “activity”-related things like innovation teams, labs, funds, etc.
But at the end of the day, if you have a beautiful innovation culture and strategy and system, but you’re only actually innovating, say, once every 2–3 years, well, that’s just too slow a tempo — especially in 2018, with emerging technologies like robotics/automation, AR/VR/MR, the Internet of Things, blockchain/bitcoin, AI/ML/DL, mind/machine interfaces, bionano, and quantum computing rapidly becoming part of our day-to-day lives.
What’s the Proper Innovation Tempo for Your Company?
So, given all that, lately, I’ve been wondering about things like:
1. How can we define innovation tempo?
2. How can leaders determine the best tempo for their company?
3. How can we increase that tempo — and maybe even make it optimal — over time?
Innovation Tempo: A Definition, and Some Attendant Factors
This one is relatively straightforward: your innovation tempo is how frequently your company innovates.
Assuming we take “innovation” to mean, as per the above, new/different products/services that have a significant impact that have been established out in the real world, innovation tempo would be, quite simply, how often that happens.
For example, maybe it’s good for a $20 billion company to do 2 successful innovations per year — especially if they are relatively impactful innovations.
Or maybe that’s too low; maybe if you’re that big, you should shoot for 4–5 per year…
Or maybe that’s setting the quality/impact bar too low, and that, actually, if you did one really big innovation per year — something that would still give a “Wow!” to your customers, and an “Uh-oh…” to your competitors — that would be a good innovation tempo.
Maybe it depends upon your industry… (I’m pretty sure it does)
Maybe it depends upon the age/maturity of your company (Yep, that’s a factor.)
And surely your corporate strategy and your innovation strategy would influence your innovation tempo over time.
The upshot here is that it’s up to each company to determine their innovation tempo and to back that up with a good strategy/rationale.
Is There A Universal Formula for Calculating Innovation Tempo?
So let’s assume that the innovation tempo for each company would/should be different and that that tempo could, and probably should evolve over time…
That said, could there be some kind of universal ratio — like the Golden Ratio in design, or the 80/20 Rule in economics — for innovation tempo?
I think there might be, and that the logic leading up to such a rationale might go something like this…
1. Let’s say a company wants to start conservatively and try to achieve one big innovation per year; for every one actual innovation, how many new products/services would they have to launch in that same year?
2. I think the answer would be something like “3 or 4”; reason being, even if you are really rigorous/creative/logical/bold re: those 3 or 4 launches, it’s likely that at least 2 or 3 of them probably won’t become the kind of big, established-out-in-the-world innovation you’re looking for — partly because your competitors are probably thinking about/acting on the same things, and also because innovation is notoriously hard to predict. But if you were to launch, say, 4 of them, I think your odds of achieving at least one bona fide innovation might be pretty good.
3. Okay, so let’s say our equation is, so far, “For every 1 successful innovation, we will have to launch 4 potential innovations into the marketplace…” That’s a 25% hit rate, which, when you look at the actual history of innovation, isn’t such a bad number to shoot for.
4. If that’s so, then the next question is: “How many innovation projects do we have to establish inside the company, to get us to the point where we can feel good about those 4 launches outside the company?”
5. I think the answer would be something like “12.” Think about it: if you have a strong innovation culture and strategy and process, and you used those three things help you to create and develop 12 full-on innovation projects, isn’t it reasonable to expect that something like one-third of them could possibly be deemed “market ready” within the year?
6. These relative proportions make sense to me, especially when you think about it this way: you have more control re: deciding which projects become launches than you do about which launches become successful innovations, so wouldn’t it make sense that the percentage of the former would be, say, 33%, whereas the percentage of the latter would be, say, 25%?
7. If that logic makes sense, now we’ve arrived at something that starts to feel kind of practical/prescriptive, namely: “If we want 1 innovation, we have to launch 4 new products/services; and to get to those 4 new offerings, we have to create 12 innovation projects inside the company.”
8. 12…4…1. That sounds about right to me, but even if so, then the next question would be, how does that scale?
9. Does that mean if you want 5 innovation per year, you have to launch 20 new offerings, which were selected from among 60 innovation projects? That, too, sounds about right. But let’s take it further: would that extend to 50 innovations requiring 200 launches and 600 innovation projects? That starts to sound a little non-scalable.
10. But again, this is where we come to the edge of my thinking on this topic, so I’ll stop with the speculations at this point by concluding that, even if we don’t know the proper ratio (and over time, therefore, tempo) between these three things (projects, launches, and innovations), it’s pretty clear that there must be one, and if so I think that’s worth discovering.
Innovation Tempo: As Important as it is Currently Imprecise
I’m not sure what those exact numbers should be, but I will end with a few things that I do know about innovation tempo:
1. Most companies’ innovation tempo is dramatically slower than it should be.
2. I think innovation tempo should be established up front, based on a clearly articulated innovation culture, strategy, and system, rather than just measured passively, after the fact;
3. Companies that achieve and maintain an optimal — or hell, any kind of, for now — innovation tempo are going to do much better than those that pay no attention to this vital metric.
So anyway, the next time you’re in one of those meetings talking about “innovation,” feel free to bring up the question of innovation tempo. And if you do, please let me know how it went…