Innovation is an important theme among entrepreneurs, directors and managers. Because by bringing new products to market, doing processes differently or organizing yourself smarter, you can get more customers, improve services or bring down costs.
So plenty of reason to get started with innovation. How do you do that in a structured way so that you increase the chances of success? For that, in my work as an innovation expert, I use the Innovation Model. The model provides a process, starting from determining strategy to exploring what technology you can use for innovation.
- Want to hire me for a lecture or workshop on this topic? Then do a booking request right away! Look here for more information: speaker innovation.
Want to watch? This is my video about the Innovation Model:
What is the definition of innovation?
Definition of innovation
When I give a keynote or workshop on innovation, I discuss what innovation is at the beginning of the session. Because many people have an image or feeling about innovation, but have difficulty putting the term into words.
This is the definition I use:
Innovation is a process of value creation, by using knowledge and other resources in ways not done before.
There are a few key elements in this definition:
- Process: there are inputs (such as ideas), activities (such as brainstorms or R&D) and outputs (a product, service or revenue model).
- Not done before: the output is new to the specific context or setting in which it is applied.
- Value creation: the output adds value to the user or other stakeholders.
The last element of value creation is particularly important. This makes an invention different from an innovation.
For example: a computer chip is an invention. Once this chip creates new capabilities that did not exist before, such as in smartphones, it becomes innovation.
One of the first thinkers in this field was Austrian Joseph Schumpeter. Later in this article, I wrote an article on his theory of creative destruction.
My Innovation Model helps take a structured and successful approach to innovation.
The Innovation Model
Innovation is not something mystical or mysterious. Companies that successfully innovate have clever models, structures and processes for doing so. In my research, I have found a common thread in this. In five steps, I take you through how to innovate better, faster and more successfully: the Innovation Model.
The Innovation Model consists of these steps:
Following the steps of this model, I also describe the following case: Garmin.
The first step in my Innovation Model is Identification.
Step 1: Identification
The identification phase is about determining a strategy for innovation. In the strategy, you determine what you want to achieve with innovation and how you want to do it.
Checklist
To determine your innovation strategy, you can use this checklist:
- Ambition. How much added value do we want to get from innovation and how much will we invest? “1
- Portfolio. In which areas do we want to innovate, in which do we not?
- Organization. How will we organize the innovation activities? In a separate department, a team or in some other way?
- Collaboration. With whom and in what networks do we collaborate on innovation?
- Evaluation. How do we assess whether innovation activities are successful? At what points do we do this?
Example
I think a great example is De Zorggroep in Venlo, a large healthcare organization in North and Central Limburg. There I gave a keynote on technology and innovation in healthcare.
The main premise of their innovation strategy is that they want to be “first follower. This means that they do not want to test and experiment with innovations at the risk of encountering all kinds of teething problems.
But if they see a good innovation at other healthcare organizations, they are going to look at that and see if they can implement it.
Portfolio
So how do you decide what to spend time and money on? Scientists Nagji and Tuff developed a handy framework for managing an innovation portfolio in 2012.
They distinguish three areas, using two axes:
- Where you play (the market, on the y-axis)
- How to win (the range of products or services, the x-axis).
As a rule of thumb for committing your time and resources, they indicate that you commit 70% to the existing markets and offerings (green part), 20% to related markets and incremental adjustments (yellow part) and 10% to transformation, the new markets and a new offering (red part).
The return on this commitment, according to Nagji and Tuff, is inverse: ultimately, the 10% commitment to transformation yields over 70% in sales and profits.
Note that these proportions vary by sector. For companies that sell consumer products (such as bicycles or soup), the distribution is different: 80% green, 18% yellow and 2% red.
On which products and services you will innovate and how you will do that, you determine in the next steps of the Innovation Model.
The second step in my Innovation Model is Inventory.
Step 2: Inventory
After identification (defining your strategy) comes inventory. This step is about gathering innovation ideas to build on. This inventory follows two tracks:
- Charting trends and developments
- Collect customer needs and wants
The first track of trends and developments is close to doing a strategic foresight project or futures research. That is why I also wrote an article about foresight driven organizations.
The second track underscores my point that innovation should be something where everyone can have input. After all:
You never know where and with whom a good idea will arise.
You do need to encourage and cultivate this culture of innovativeness.
Tip: Innovative culture
The biggest barrier to innovation mentioned by participants in my lecture or workshop is precisely culture. They mention that important elements in innovation, such as trying new things and making mistakes, are not recognized, rewarded or encouraged.
I also notice that many companies think that an Innovation Department will get them there. A typical response then is: ‘I don’t need to innovate. We have an Innovation team for that, don’t we?
But it is more powerful to involve everyone in innovation. After all, account managers, maintenance technicians, nurses and other employees often enough in their jobs think something could be done better, faster or differently.
Tip:
Give employees with ideas the opportunity to test them themselves cheaply and quickly.
A well-known example is software company Adobe. Employees with a good idea are given a red box called the Kickbox. Inside the box are the following:
- post-its for brainstorms
- short roadmap to test your idea
- booklet to write down ideas in
- credit card with credit of $1,000
- bar of chocolate, for energy and good mood
Meanwhile, more companies are applying this idea of Adobe. Smart, because this way innovation is not limited to one team or one department.
Secret of Disney
Another company successfully applying the toolkit method is Disney.
Duncan Wardle, former Vice President of Creativity at Disney, shared (in an engaging workshop I attended with him) what they have tried to do to drive innovation in the company:
- Hiring experts from a consulting firm. They did a project, which worked. When they left, it collapsed again.
- Establishing a creative department. Other employees then thought, “Apparently I’m not creative.
- Collaborating with start-ups. With this, they reached at most 2% of employees.
What did work? Wardle says in an interview:
“A toolkit that makes creativity accessible, tangible and attractive to everyone. So that people start working with it of their own accord.”
In addition to this toolkit, employees received training and tips on how to organize creative sessions in their departments so that they could start using the toolkit right away.
NB. I think the company Garmin is a great example of innovative culture. You can read more about it in the case study later in this article.
Summary
In short, Inventory is about collecting ideas. These ideas may come from futures studies or market research.
But just as important is that employees see what can improve their work, what customers are up against and where there are opportunities for new markets.
How you build on the ideas to arrive at promising innovations is determined in the next steps of the Innovation Model.
The third step in my Innovation Model is Ideation.
Step 3: Ideation
After identification (setting strategy) and inventory (collecting ideas), ideation is all about developing innovation ideas further.
This step often comes up during workshops on innovation that I lead. These are tips for success that I want to share with you:
- Quantity leads to quality
- Combining and mixing
Tip 1: Quantity leads to quality
What made Beethoven and Mozart genius composers? One point that is often missed is that, above all, they made a lot of pieces. A lot of musical pieces.
So they did not have a higher success rate than peers. But because they made far more volume, they increased the likelihood that great works would come out.
The same goes for innovation ideas. Therefore, if you are going to do a creative session with colleagues such as a brainstorm, keep this in mind. Especially at the beginning of the workshop, it is good to come up with and associate ideas as broad and crazy as possible.
Selecting and cutting will all come later.
In short, quantity creates variety. How? The more ideas you have, the more likely they are to differ from each other. The greater the variety, the greater the chance of quality ideas. And with more quality, you have a greater chance of success.
Tip 2: Combine and mix
A misconception around creativity is that your idea must be unique. But most (and often best) ideas are combinations and remixes of already existing ideas.
In 2014, Hyejin Youn underscored this with her research on patents. She and her colleagues analyzed all patents in the United States between 1790 and 2010. In doing so, they consider patents as a measure of innovation.
What turns out: until 1870, most patents are really new technologies and inventions. From then on, innovation seems to change: patents are increasingly about combining existing techniques.
In other words, innovation became modular, like IKEA furniture.
Or put another way:
Innovation happens when ideas have sex.
Matt Ridley substantiates this in his book How Innovation Works with the example of the printing press. Gutenberg assembled the printing press with elements that already existed, including stamps (from goldsmiths), mechanics (from wine presses), alloys (from bell foundries) and ink (from painting).
In short, in your creative session, try to look at your problem from other angles as much as possible. See how you can borrow elements and components from entirely different fields, disciplines and industries.
Tip 3: Stop brainstorming
Maybe you recognize it from brainstorming sessions at work. Everyone gets to shout something. And, “there’s no such thing as bad answers.
Such sessions are great for generating lots of ideas. Think of an innovative new product, different service or finding ways to solve problems.
But the problem is often the HiPPO. Not the hippo, but in the words of author Adam Grant:
The HiPPO is the Highest Paid Person’s Opinion.
In other words, if the boss participates, everyone (consciously or unconsciously) focuses primarily on his ideas. If the boss suggests an idea, then as a group you are more likely to elaborate or further associate on it.
Solution: brainwriting
Adam Grant has a practical solution to the HiPPO’s problem: brainwriting.
- The first step in a brainstorm is for everyone to write down their ideas.
- During the second step, you will discuss the ideas with each other.
You can eliminate the HiPPO effect even more in the second step by anonymizing the ideas first, for example by rewriting or printing the ideas as a workshop facilitator.
If you don’t, there’s still a good chance you can recognize from the handwriting whose idea it is.
But this openness to ideas also requires something else: the courage to make yourself vulnerable. Do you dare to take the chance that your own ideas will not be developed further? Or that someone lower down the hierarchy will come up with a brilliant idea that you didn’t think of?
Summary
Ideation is about developing ideas through. It builds on the two steps before it, providing the framework for the direction you can think about now. But in this step, you get to let loose. Brainstorming and out-of-the-box thinking are essential to come up with good ideas.
How you will then select, test and try ideas is determined in the next two steps of the Innovation Model.
The fourth step in my Innovation Model is Iteration.
Step 4: Iteration
Iteration follows identification (determining strategy), inventory (collecting ideas) and ideation (developing ideas). In this step, you select, test and try out the best ideas to discover if they are really good.
Why experimentation works
Innovation is by definition uncertain. If you are immediately sure your idea will succeed, chances are someone else has already implemented it.
The best way to deal with that uncertainty is to try out your idea. Experimentation reduces risk and speeds up the learning process. You’ll discover what works and what doesn’t, and what you can tweak.
Recent research at TU Delft confirms this:
Early and repeated experimentation increases the success of innovations.
Tip: think like a scientist
How do you deal intelligently with the results of your experiments? Adam Grant argues in his book Think Again that a scientific approach helps.
Grant cites a 2020 study in which Italian innovation scientists followed over 196 student teams who wanted to create their own startups.
The student teams were taught entrepreneurship. These included creating a business plan with a strategy, interviewing potential customers and designing prototypes.
The twist? The student teams were divided into two groups: group A received additional instruction in the scientific method, and group B served as the control group.
Through the scientific method, these teams viewed their start-up from a different perspective:
Their strategies became theories, client interviews focused on hypothesis building, and prototypes were used to test those hypotheses.
After four months, the researchers looked at the average turnover of the student teams. The teams that thought like scientists had an average of 7,000 more revenue than the teams in the control group.
The researchers noted that the teams in the control group stuck with their original idea. While the student teams using the scientific method had changed their product or service twice as much as usual.
In short, the scientific method helped the teams look at their ideas more rationally and objectively. They were less attached to their original concepts and were more daring to change course, following feedback from interviews or prototypes.
The fifth step in my Innovation Model is Implementation.
Step 5: Implementation
After identification (defining your strategy), inventory (collecting ideas), ideation (turning ideas into innovations) and iteration (testing innovations), implementation is about actually introducing the innovation.
Business case as a basis
Ultimately, the management, a project team or the board decides whether an innovation idea will be developed further. This could be a product or service you are going to introduce, or it could be a new system or way of working.
But on what basis can you best determine whether to implement the innovation?
Prior to this step of implementation, but often before, you prepare a business case. The business case is intended to convince managers, investors, financiers and decision makers of the innovation.
What elements should such a business case contain? That varies by organization, industry and project, but these are the main components:
- Target audience: will customers buy and use it?
- Feasibility: can we make and deliver it?
- Revenue model: will it be profitable and can we afford it?
- Risk: What do we risk, both if the innovation flops and also if it becomes a great success?
- Appropriateness: why do we need to do this now?
The figures in the business case are estimates, ideally underpinned by insights from the experiments from the previous step, the iteration.
Don’t forget the social side
Once you have been given the green light to further develop the innovation into real products or services, the mindset within such a project shifts.
The earlier steps such as ideation and iteration focus on creativity and innovation. In implementation, the emphasis shifts to practicality and acceptance by colleagues and customers.
That’s why it’s smart to bet on two tracks:
- Technical implementation. This involves the product or solution itself. Consider installation, configuration and integration with other systems.
- Social implementation. This is about the process and the users. Consider attitudes, behaviors, knowledge and skills.
In my experience, social implementation is often underestimated or overlooked. While organizations that take this social side seriously are far more successful than those that do not.
Professor Henk Volberda of Erasmus University investigated this with his colleagues:
Companies that take social innovation seriously average 25% more sales, 27% more profits, 29% more new customers, 28% more satisfied employees and higher productivity.
In short, it pays to bet on the social side of innovation.
Tips for the social side
So how do you do that concretely? These are a few best practices from lectures I have given at companies, healthcare organizations and municipalities.
- Consider differences in a person’s starting level, learning speed and learning preferences. Some people want to try on their own, while others need a detailed tutorial or instructional video. Offer all of these options and let users choose for themselves.
- Have colleagues on the shop floor who are ambassadors of the innovation. It is easier to go to these colleagues when you can’t figure it out, instead of calling someone from ICT or the innovation team.
- Create a place, such as on the intranet or at a monthly meeting, where users can share their experiences.
Case study: PostNL
For example, I gave a workshop on innovation at PostNL. The assignment: think about what PostNL will look like in 2040. We worked around themes such as sustainability, circularity, AI, data, the future of work, robotization and ethics.
The participants dove into the future in groups. What will soon be radically different? They had to incorporate their wildest ideas into a fictitious PostNL Newsflash from 2040. Radically innovative, but credible.
The management had figured out in advance what they would pay attention to. Especially: how do you get customers to want to buy it? And how do you get colleagues to work with it?
Management shares all ideas with the organization and further explores the best ideas.
Smart of management. Because a workshop like this is fun, but the real work starts afterwards. By giving this follow-up, they show that innovation is more than a day of brainstorming.
A case study of innovation is the company Garmin.
Case study: Garmin
Garmin is one of my favorite companies. The first reason is that they make good sports watches. My Epix 2 is indispensable when I do trail running or take a long walk.
The second reason is professional. After all, Garmin is a textbook example of how, as a company, you can reinvent yourself through innovation.
This is the run-up:
- 1973: The U.S. Army launches (pun intended) the plan to equip satellites with a so-called Global Position System (GPS).
- 1983: America splits GPS for military use (Precision Positioning System, accurate to 10 meters) and other use (Standard Positioning System, accurate to 100 meters).
- 1989: Gary Burrell and Min Kao decide to found a company that makes devices for positioning with the Standard Positioning System. The name: the first three letters of Gary and of Min.
- Nineties: Garmin is the market leader in GPS technology in cars, along with Dutch company TomTom.
- 2000: the U.S. government also makes the Precision Positioning System available for commercial applications.
- 2008: Google launches Maps, while a year earlier Apple released the iPhone.
Google Maps on smartphones was catastrophic for Garmin’s sales. Sales plummeted and the company lost 90% of its value on the stock market.
How did Garmin survive this crisis? The solution came from an unexpected quarter:
Among Garmin’s employees were a few avid runners. According to an article in Fortune, around 2003 those runners discussed with each other the idea of making a watch with GPS in it.
GPS-enabled sports watches did not immediately fill the sales gap, but year after year Garmin built on its own niche: runners, cyclists, sailors and other outdoor enthusiasts.
In short, Garmin survived and thrived. How did they do it? By:
- invest in technology;
- daring to innovate;
- listening to the ideas of enthusiastic committed employees.
My observation is that engaging employees in innovation is deeply embedded in the culture of the company.
This statement by Garmin CEO Clifton Pemble underscores this:
“Our best ideas come from employees, not from me. CEO ideas are usually not as good as you might think.”
Background: creative destruction
Creative destruction
One of the first scientific approaches to innovation is Joseph Schumpeter’s work on creative destruction. Schumpeter’s theory of creative destruction built on the work of Werner Sombart:
Creative destruction is a process of continuous technical innovation, where successful applications of new techniques destroy the old.
The core of this theory is that innovations, such as new technologies, production methods or business models, create fundamental changes in the economy. These innovations displace existing structures, businesses and professions.
For example: self-scanning at supermarkets is displacing the profession of cashiers. Or in the same theme: Picnic’s service is displacing physical supermarkets.
NOTES. Want to hire me for a lecture or workshop on this topic? Then do a booking request right away! Look here for more information: speaker innovation.
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