What’s Stopping Innovation?

The other day, one of my colleagues asked me, “What exactly do you mean when you use the word ‘innovation?'” Answering the question led to a productive discussion about what really inhibits innovation inside large organizations.

When I use the word innovation, I think of three interlocking components:

  • Insight or inspiration suggesting an opportunity to do something different to create value
  • An idea or plan to build an offering based on that insight or inspiration
  • The translation of that plan into a successful business (in simple terms, commercialization)

Obviously, each of these components carries significant complexity, but more often than not, they cover the basics of innovation.

The senior leaders I talk to believe that the bulk of their innovation challenges lie in the first two components. I suspect this is because the third piece looks like execution, and of course, large organizations know all about execution. And yet, my field experience suggests that it’s this third component, not the first two, that actually blocks innovation.

Most companies are drowning in insight — although they don’t always know it. You can almost always find compelling ideas and well-developed plans. And, of course, as I’ve noted many times before, a plan almost always changes a few times before a truly viable business emerges.

The hard part is in the doing, in taking the requisite steps to translate an idea that looks great on paper into profits.

I call this the “First Mile” problem. The name borrows from a well-known problem in telecommunications-related industries in the 1990s. At the time, technologies in the “core” of the network were rapidly improving. But most consumers didn’t see much benefit from that. The “last mile” of wires that connected consumers to those new network services were built for a different era. Replacing them required house-by-house restringing with new wires by construction workers and networking specialists. Needless to say it required a heavy investment. Pundits termed it the “Last Mile” problem.

What’s the “First Mile” problem then? Earning the first dollar, euro, or rupee of revenue for what looks like a new business to the company. You give most companies a $50 million business and ask them to scale it, and many can do it without batting an eye. You ask them to take a good product and make it better, and they rise to the challenge. But starting something, getting through that first mile is is just punishingly difficult.

I don’t mean to diminish the importance of gathering insight, seeking inspiration, or developing compelling business plans. Good solid work in these areas is absolutely critical to innovation. But companies seeking to enjoy the fruits of innovation need to spend significantly more time working on how they will pave that First Mile of growth.

I’m curious if my observation matches your perspectives. For argument’s sake, let’s accept that innovation involves insight, a compelling plan, and commercialization. Where do you see the greatest outage?

Advertisements
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: