How innovation is changing

19 Jan 2009|Darrel Rhea

Stepping back and looking at the practice of innovation more broadly, what is shifting?

A lot of big things are happening. Anyone who reads knows that innovation and design have been getting a lot of attention in the media in the last couple of years. Not surprisingly, we learn that there has been a lot of experimentation and investment happening across the board. I see three major shifts happening: …

1) A shift toward user-centered (or human-centered) innovation (rather than technology or traditional R&D-focused innovation). At last we are experiencing a growing awareness that innovation is about creating value for human beings, and that value is defined by our customers, and not by us. If I hear another arrogant executive boast that consumers couldn’t articulate their desire for the Walkman and therefore we can and should be telling customers what they should want based on our own preferences and wisdom – I’ll scream. Finally we have been able to debunk the myth that since customers can’t articulate what they will want in the future, that we should ignore them. It bears to keep in mind that there are very robust techniques of building empathy, compassion and insight about who our customers are as human beings as a basis for innovation.

Understanding the world of our customers, with its subtle cultural nuances and rituals, opens up giant opportunities to frame innovation more broadly, not just on technical or functional terms, but on ways that allow us to connect to consumers’ emotions and meaning.

2) The desire within corporations to build a sustainable internal organizational competence in innovation. The business community has figured out that the purely analytical based approach to managing business that was so prevalent over the last 50 years actually inhibits innovation. This has created a shift toward building environments that nurture creativity and risk taking in the workforce.

We are seeing an increased demand for training programs, and more importantly, cultural change programs. People are being encouraged to have more direct experience and interactions with customers. It’s about not relying on traditional market research. We need to be the interpreters of customers’ attitudes and preferences, and getting that empathy embedded into the corporate culture. Our clients want an authentic experience of who they are innovating for.

There is a demand for more open innovation. One expression of that is harnessing a broader internal group. For example, Coke has over a million employees in their network they can leverage through web-based systems. Adobe and Microsoft are other examples of companies leveraging this. The other expression is web-based programs that tap external communities for innovation support. This is delivering promising results, especially with the technical challenges. P&G is relying on more external partners to help it innovate, with A.G. Lafley stating a goal of 50% of its innovation to come from the outside. All of these movements are about changing the way that innovation is done.

3) The move toward a convergence of disciplines in the innovation practices. You’ve been hearing a lot about the role of design in innovation. The modern practice of design has evolved to be much broader than most people realize. It’s not just about graphic or industrial design, or even the design of experiences. It now includes a very sophisticated approach to systems design that is making big contributions to strategy.

Contemporary design consultancies are also becoming human-centered. Just a few years ago, they were either hostile to, resistant to or ignorant of the importance of consumer insights. Now they have bought into it whole hog. They are sounding a lot more like market research firms today.
On the other hand, market research consultancies are becoming more design-focused. In addition to their long advocacy for customer-centered approaches, they have added the creative and more sophisticated aspects of systems design to their practice. For example, companies like Cheskin (historically a leader in market research) are now also considered thought-leaders in design today in many quarters. And, we have a robust business consulting practice too.
Business strategy consultants are moving toward both the customer-centered approaches of research and the creativity-based approaches of the design community – and merging them with their business analytics capabilities. The McKinsey’s and the Bain’s are all trying to converge.

So there is this convergence from all sides, but who will be the leaders to emerge? I think that it is a cultural issue really. Who will be the most successful at integrating these diverse practices areas? Integrated thinkers are rare, and academia isn’t doing a great job yet in developing this skill broadly. The challenge is that people think very differently from each discipline. Designers are all about the assertion (Why not? What if?). Researchers are all about “the who” and the social accommodation. Business consultants want the proof based on historical data.

Those leaders who can find value in the strengths of each approach and develop a culture of collaboration will come out on top. This is what Cheskin has been working so hard on behind the scenes.

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