Tuesday, August 15, 2017

Overcoming fixedness before being locked in amber

It seems strange to me, after working for over 12 years in innovation, that so many people can view the same set of circumstances and opportunities in so many different ways.  Our economy is awash in innovation opportunities, and the opportunities are growing and expanding.  There are opportunities to innovate new products and services, of course, but also new channels and new business models.  Customer experience is rapidly becoming an important innovation avenue.  Paul Hobcraft and I have been writing about the opportunities that are available in entire platforms and ecosystems, and these of course create in turn new opportunities.

The basic building blocks of opportunities - customers, unmet needs, emerging trends and technologies - are all growing.  Beyond that most of us have our basic needs fully met - food, clothing, shelter are all reasonably achieved.  That means that new innovations may be more intangible, psychological, emotional, notional - but there are as many opportunities there as there are in tangible innovations, if not more so.

With this opportunity abundance, why is it that so many individuals and companies see restrictions, limits and barriers to innovation, rather than the vast potential that's available if only they'd set aside past conventions and risk tolerances.  After all, this isn't a 'glass half empty, glass half full' conundrum. This is more akin to a 'glass half empty, barrel overflowing' situation.  People simply aren't paying attention, are too distracted or too fearful to really think about all the potential innovation opportunity.  Or, as I'll explore below, we give into a perspective that suggests that many issues, conventions, regulations and cultures are fixed, unable to move.

Like an insect in amber

You may be familiar with amber - the gemstone that originates from ancient tree sap that hardened over time.  The Czar of Russia had an entire room that was covered in amber - supposedly one of the most beautiful rooms in the world.  You'll often find in amber insects from long ago that were captured by the sap as it flowed down pre-historic trees.  I often think of modern business executives and their teams share similarities with those insects.  They are caught up, stuck, and have lost their freedom of movement. But unlike the insects, that loss of freedom isn't because of a tangible, sticky substance, but because of the stickiness of their perspectives, their cultures, their experiences and education and their industry conventions.  They are insects in a virtual amber, doomed to limits that are dictated and prescribed by their own thinking.

Innovation comes from outside

It may not seem evident at first, but virtually all radical and disruptive innovation originates from outside an industry's boundaries, by people who often weren't even in the industry, who were serving other clients or other needs and saw a way to serve a new set of customers or solve a new set of needs.  The reason these outsiders can so easily disrupt an existing industry is because they haven't been paying homage to the conventions and cultures that built the industry or market.  These entrants have little or no stake in how the industry or market is built or its existing business models, and in fact can profit by radically changing the business model.  These individuals, like Richard Branson or increasingly Elon Musk, are radical free agents, who aren't bound by industry conventions or past expectations, who actively look across industries for rigid decision making and adherence to past ways of doing business.

Weak links / Strong links

The other way to think about this stickiness is a "weak link/strong link" framework.  There are two perspectives: first, the linkages within the industry or convention and second the linkages between the participants.  Disruptive innovation is easier in the first example when there are few strong industry conventions or shifting from existing conventions is relatively painless for the consumer, or when everything is shifting, so the customer accepts that shifts are necessary and important.  An example is when digital music appeared via MP3s and Napster made music sharing acceptable.  Apple was able to disrupt music distribution and publishing because the form factors changed, the technology (digital versus physical media) changed and the music players themselves changed.  When multiple factors are changing, disruption is easier to accept.

Conversely we can see why it is difficult to innovate in the airline industry.  There are too many rigid, regulated or business model conditions.  Safety concerns, unions, the transparency of pricing, the reliance on key volatile inputs (oil, labor), the fixed number of gates and so on don't leave a lot of options for innovation. This means that much of the innovation needs to happen outside of the core offering, and explains why the most interesting innovation has come from outsiders (Branson for branding) or new entrants (Emirates/Qatar) for new services.  But even these innovations pale when we compare them to innovations in technology, in software and in other markets or industries where conventions or regulations are absent or easier to ignore.

What's fixed / what mutable?

So the questions a potential innovator must ask themselves in any situation is:  what's fixed, and cannot be changed?  What do competitors assume is fixed but could change?  Where are there strong linkages that would be difficult to change, and where is change already occurring that we can surf to greater success?  And, how "fixed" or transmutable is my company's culture, perspective and thinking?  Can others around me recognize opportunity and move with it?

Innovation is possible in any setting and in any industry.  Even a very heavily regulated industry such as air travel has plenty of potential for innovation if only the participants would think beyond product innovation.  In other industries that are less regulated, innovation opportunities abound.  Innovators must determine the "fixedness" of their perspectives and cultures, and then the fixedness of the industry or market they compete in.  Otherwise, like the insect swallowed by the tree sap, they'll find themselves encased, unable to move and unable to innovate.

AddThis Social Bookmark Button
posted by Jeffrey Phillips at 6:19 AM


Post a Comment

<< Home