The Key Stage in Every Innovation Program (That No One Talks About)

I had a version of this call three times in the last six months: “Where did I go wrong?  We planned thoroughly, tested and refined our concepts and built an All Star team.  Things went smoothly for about eight weeks…and then all hades broke loose.  There were things we just didn’t anticipate. Now we have beta project commitments to make, I’m worried about it affecting our core brand, and my CEO wants daily reports.  You are an engineer and a strategist, can you help?”

The answer is yes, and while there may be temporary pain, they will realize that this “problem” is in fact a gift in disguise (more on that in a minute).

All these clients are victims of what I have come to call the “MBA fallacy.”  If you take the academic work at face value, it implies that you can develop a completely vetted “on paper” strategy that is so complete that it moves from concept to implementation with only superficial tweaks.

The truth is that the only large-scale operation to do this is NASA, and they spend more than half their budget anticipating every potentially negative pathway and mitigating it.  Even then, the stories of unanticipated scenarios and overcoming them are subjects of books and movies.

For those of us not building space hardware, strategy is very valuable, and having a good one is a great investment.  Where this goes wrong, is assuming that more investment in strategy will remove all friction.

In the best case, a great job at the strategy level can only disclose what I call the “known unknowns.”  

In other words, based on the most considered insight of advisers both within and outside of our industry, these are the areas we should plan for and anticipate.  Our academic partners frequently get called in to chronicle case studies well after that fact, and what people tell them and what really happened are two different things.  Those people being interviewed try hard not to do it, but they suffer from a major case of revisionist history.  The case writers are trained to look for themes and memes, and again they try hard to be objective, but they also inadvertently leave out the messy bits.

In academic work, frequently the evidence of the real struggle has been bleached out.

The truth, lived at runway level, is that every significant growth program needs to go through a challenging period where we experience the full-on emergence of the unknown unknowns.  From personal experience these can look like:

• Seeing in practice that a sales force is unable to make the case for this new product or service (even though it’s the same “customer”)
• Finding out that our manufacturing operation cannot work with an adhesive process and create consistent results
• Your high-tech radio product is being delivered to customers off the back of a truck by dropping it four feet.
• The new semiconductor process is unable to create devices at the quality level promised.
• Finding out that a tree is “shadowing” the radio coverage you had not anticipated.
• The cameras you have specified are unable to deal with a full on sunset and maintain the control function.

And so on.  (I’m sure that you can add to the list)

Now the counter intuitive truth.

The period that you and the team spend in solving the real problems after committing to the program is where more than half of the value of your offering is built.  The logic for this claim is this: if you are able to build the strategy on paper, so are a number of your competitors.  The missing elements, the deep “how to” knowledge, is what will form the core of deep added value for your firm.  By solving these issues systematically and completely, you lay a foundation that can provide a long-term sustainable advantage.

Some examples:

• Intel won the microprocessor “wars” with a more complete development kit, after their customers complained bitterly about how hard the devices were to build into custom systems.
• A private radio supplier developed a web-based coverage planning tool that has become a go-to in the industry – in fact, even their competitors direct their customers to it.
• By developing a new staging system for radio delivery, the above manufacturer was able to build “on-site” integration into a value-added service
• By featuring the “sunset” issue described above, a private camera vendor had a much larger market share than its peers.

There is easily another whole blog post worth of tips and tricks around how to deal with the risk that every program faces.  The core elements of that discussion are in expectations setting, careful risk boundary setting and full disclosure when in the beta stages.

Careful usage of investment, balanced between the “on paper” stage and the “in the field” stage of growth investments and projects is a frequent topic with many of my clients.  If you’d like to talk more specifically about your situation, please send me an email or call me direct at 847-651-1014.