The New Rules of Innovation.

Rule # 1 – None of us are as smart as all of us.
The image of a lone genius slaving away in a dimly lit basement or garage is the traditional image of the inventor. However, according to Andrew Hargadon (Assistant Professor of Technology Management at the University of California) this is largely a myth. Moreover, when it comes to innovation, a collective effort is more usually the norm. Andrew Hargadon’s book (How Breakthroughs Happen) says that innovation is largely a result of networks. These are formal and informal collections of people and projects ranging from employees and suppliers to customers and even competitors. These networks are highly social in nature, which means that cultivating relationships is important. Another key observation is the thought that ideas are rarely new. New ideas are usually a recombination of old ideas and thus diversity in terms of people, ideas and experience is key for innovation. Having said all this, the best way to kill a good idea is to involve a committee, so ensure that there’s someone in charge to bang heads together and, if necessary, dislodge the gridlock.

Rule # 2 – Pioneers get scalped.
The theory of first mover advantage is bunk according to Nicolas Carr (author of ‘Does IT Matter’), who says that when a disruptive technology arrives the real growth opportunities lie in fixing the disruption. In other words the pioneers often get scalped. His argument is that the future arrives in “fits and starts” and many of the most profitable innovations are inherently conservative. Ditto companies (look at Toyota or Wal-Mart). Innovators (especially technology innovators) often get too far ahead of customers who are fundamentally change adverse. A good example is the Internet. Many of the early firms failed, not because they had a bad idea, but because they had an idea too soon and lacked the patience, managerial or marketing smarts to hang around. Another example is Netflix. The company is a wild success because it doesn’t fight current technological restraints. You could set up a movie rental company that delivers films via huge downloads but it’s currently a much better idea to let people order over the Internet and let the US postal service deliver the goods.

Rule # 3 – The more you try, the luckier you get.
As Linus Pauling said: “The best way to have a good idea is to have a lot of ideas.” Innovation is partly a numbers game. Fail often and fail fast and learn from your mistakes. Apple didn’t give up after the Lisa or the Newton. Moreover, don’t punish people when they make mistakes. Punish them when they don’t make enough mistakes or when they repeatedly make the same mistake. Some companies don’t get this. They are on an eternal quest for the perfect solution and spend so long researching and developing single ideas that by the time they’re launched it’s already too late. This conflicts, to some extent, with rule #2, but not much. Timing is everything and generally it’s better to be approximately right and slightly early than perfectly right and very late. Furthermore, the old model of create, edit, publish is rapidly being pushed aside in favour of a new and faster, model which is create, publish, edit (i.e. let the customer co-create the final product). This particularly true where speed to market is important and links into ideas like ‘thin slicing.’

Rule # 4 — Don’t confuse ideas with innovation.
Organizations think they can be great at ideas and innovation, when generally speaking they’re either good at one or the other. Small organizations and start-ups tend to be good with ideas, but can be weak on implementation and scale. With big organizations it’s often the other way around. The trick is to know what you’re good at and then go outside for help with what’s missing. A related thought is that when it comes to long-term success it’s very often the companies that avoid radical innovation that win in the longer term. Innovators who come up with disruptive ideas often go bankrupt or fail to grow beyond a niche position in the market. Thus being a fast follower (using innovation transfer or even M&A) is a perfectly good (if less glamorous) innovation strategy.

Rule # 5 – If you love something, give it away.
Got a good idea? Then give it away. In my experience too many people (especially lone inventors) hide their idea from the world in the belief that someone will steal it. Someone might. But at least if you talk to people it gives you the opportunity to polish the idea by rubbing it between your brain and theirs (see rule #1).

Rule # 6 — Innovation is about breaking rules, so ignore any or all of the above.

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