Despite all the talk about innovation from CEOs on down, the subject still daunts most people in business and industry, Robert B. Tucker told the CIMS 2013 fall conference. Tucker is president of The Innovation Resource, a global consulting and executive development firm focused on strategic innovation (www.innovationresource.com). Formerly an adjunct professor at the University of California, Los Angeles, Tucker has been studying innovation for 26 years in 40 countries as a researcher, consultant, speaker, and author. For his fifth and latest book, Innovation Is Everybody’s Business, he interviewed 43 innovation-adept individuals from multiple industries and all levels of organizations, in order to identify and teach the personal skills necessary to become a successful innovator. Following the CIMS meeting, Innovation Management Report’s Editor Michael F. Wolff sat down with Tucker to discuss trends in the innovation field. Edited excerpts:
CIMS: Given the difficulties companies have with innovation, why are you of the opinion that innovation is finally going mainstream?
Tucker: Because there’s no way to avoid it. You either innovate or you evaporate. Just ask Blockbuster, or Kodak, or Blackberry or Nokia. Operational excellence is not enough. Firms that have been lagging their peers on growth are being pressured by their boards to rev up growth. So we’re seeing many new companies, including obscure mid-sized and service companies and even franchise operations reaching out.
CIMS: You cited BCG surveys showing innovation to be a top three priority for 76 percent of CEOs, and the top priority for 40 percent of them. But translating this priority into revenue growth has often been a stumbling block, has it not?
Tucker: No question, and I think innovation is getting harder to do by the day. If you’re the CEO of a publicly-traded firm, innovation is always going to be a two-handed affair. On the one hand, you know you’ve got to invest in the future, you’ve got to take some risks, and build a more change-ready creative culture. On the other hand, you are mindful of the pressures to make this quarter’s numbers, to think ever more short term, and to limit risk, lest it adversely affect your stock price and your compensation.
CIMS: So what’s different now that’s making CEOs want to get serious about innovation?
Tucker: The likelihood that you’ll get disrupted. Fifteen years ago, when [Harvard Professor Clayton] Christensen first published his research on disruption, the phenomenon was confined to a few industries, like disk drives. Today it’s a looming threat to virtually every industry, not just technology. You don’t want to wake up one day and discover you’re the Blackberry of your industry and it’s already too late.
CIMS: What’s causing the disruptions?
Tucker: Because I work across so many industries and continents, what I’ve come to see is disruptions don’t just come from technology. It could spring from lifestyle changes, or demographic changes. Or new government regulations. Or from the impact of climate change.
CIMS: What are examples of industries that are being disrupted?
Tucker: Aside from the obvious ones, like the recording industry, how about magazines and newspapers; community banks, because of Dodd-Frank [legislation], and small retailers and even big box retailers like Best Buy, being disrupted by Amazon’s value proposition. Cable television is in the throes of a coming disruption. Dentists are being disrupted; it seems people are having fewer cavities. The printing industry. Desktop computer makers. People are drinking less milk. It’s a long list!
CIMS: So if you’re being disrupted, you’ve got to innovate. What’s an example of an industry that’s doing a good job of this?
CIMS: Take the ski resorts industry. These folks are facing the aging of the Baby Boomer generation, who let’s face it, are not as spry as they once were, and they’re opting for less strenuous sports. Meanwhile, the cost of skiing continues to rise while wages have stagnated, especially for younger folks who might like to take up the sport. The smart resorts, such as Whistler Blackcomb in British Columbia and Jay Peak Resort in Vermont, and Vail Resorts in Colorado are not sitting still. They are looking constantly for new ways to grow revenue, turning their resorts into year-round playgrounds. Whistler Blackcomb just became the world’s leading mountain bike park with big crowds in summer. Not confining themselves to snow sports at all. Peter Drucker used to exhort managers to know “what business are we in?” Today it’s also important to ask, “what business might we be in next?”
CIMS: You’ve long been an advocate of what you call systematic innovation. What is systematic innovation?
Tucker: It’s approaching innovation as a disciplined, holistic, sustainable process for driving growth and differentiation. Organizations have always innovated, but it’s been mostly piecemeal, episodic, fragmented. Then, starting in the late ‘90s, a small but passionate group of companies – BMW, Borg-Warner, Whirlpool, GE, Citibank, among others –began rethinking how they accomplished innovation from stem to stern. I wouldn’t say I invented systematic innovation. What I did was study what these people were doing differently, and that led to my writing up these case studies in the book, Driving Growth Through Innovation.
CIMS: What are these firms doing differently?
Tucker: They are breaking up internal monopolies and ways of thinking about getting new things done. Before, the R&D departments had a monopoly on R&D. Strategy departments had a monopoly on the company strategy. But these pioneers, people like Nancy Snyder at Whirlpool, and Simon Spencer at Borg-Warner and many others, said to heck with that. They saw that you’ve got to cross functions and invite new voices into the hunt for tomorrow. You’ve got to speak openly about the corporate anti-bodies that surround and kill such initiatives. And they were looking at not just new products, but new services, new business models, new markets. And they had an amazing amount of support from their chiefs, which turns out to be critical.
CIMS: In your speech you spoke about effective innovation being about the input, throughput and output of fresh ideas thru an organization’s “idea factory.” What are the elements you’ve found necessary to generate and maintain this flow?
Tucker: When you ask enough people to identify where their organization struggles with innovation, you find a lot of diversity. Some say, “we’ve got too many ideas, we’re drowning in them.” What that tells you is they’ve got a poor idea selection mechanism. Or they’ll say, “we’re poor at implementation and execution,” and that tells you something else. Or they’re poor at commercialization; they’ve had a string of duds and they are shell-shocked. Or they’ll tell you the culture is risk-averse, or that the real problem is with certain members of the top team who are dragging their feet. So what you really have is an alignment issue. You have to take a step back and look where the flow is blocked. And that means you’ve got to put somebody in charge of the overall process.
CIMS: Are you optimistic that chief innovation officers, apparently in 40 percent of larger companies today, can drive growth more effectively than other ways of managing innovation?
Tucker: What I found in interviewing a dozen innovation czars was that not all of them really have a mandate for reengineering the overall process, nor the buy-in from the business units. Quite a few are essentially chief technology officers or new product people with a new title. But the effective ones appear to be those who have the full backing of the chief, and are tasked with enabling the process rather than delivering innovations. And let’s face it: there’s always going to be conflict for resources between today’s business and tomorrow’s business. Innovation leaders are vulnerable to short term thinking caused by Wall Street’s impatience. It’s just that today, since organizations really have to get better and better at innovation just to keep from being devastated by disruption, these folks are being listened to like never before.
Robert B. Tucker is one of the world’s most in-demand innovation speakers, consultants and authors. President of The Innovation Resource Consulting Group, with clients in 46 countries, Tucker is the author most recently of Innovation is Everybody’s Business. For more information: www.innovationresource.com or firstname.lastname@example.org