4 min read

🔥 5 Things you know about innovation that are wrong

🔥 5 Things you know about innovation that are wrong
Photo by Suad Kamardeen / Unsplash

Let’s kick off 2022 with a few simple reminders about innovation and, more specifically, things you should know by now but that you still might get wrong. I already addressed a few of these ideas these last few years but never in the same article:

1. Customer-centric is a bad idea

When dealing with innovation, by definition, most of the time, potential customers do not exist yet or are just unwilling to change their habits. Even when your innovation matches with early adopters’ tastes and needs (below 16% of market adoption), what you’ve achieved will not translate to the most crucial step: getting into the early core market (from 16% to 50% market adoption).

There’s a whole book laying out this problem in detail. It’s called Crossing the Chasm, published 30 years ago.

2. MVPs are at best poor engineering

The “Minimum Viable Product” approach touted by Eric Riès in the Lean Startup is interesting in some cases. But its core hypothesis just doesn’t work for startups or corporate innovators.

And while going to the market as early as possible is most often an excellent idea, getting there with a partial product will at best give insights on some elements of the UX, never really on the problem to be solved. It ends up being just poor engineering or design.

There is something to be said about being ‘minimal’ or frugal at first and not going overboard with a fully-fledged product that no one will care about. But as an innovator, you want to test your business, not just your product. Until you invoice someone, you will have no clue what will get you traction in the market.

So at least think in terms of minimal viable business:

  1. What is the core problem you can address within a few months?
  2. Will that work for enough customers to tell you that you’re not painting yourself in a corner?
  3. Can you demonstrate enough added value to get them to pay something?

3. Design thinking has been dumbed down in uselesness

Design thinking is simple, comfortable, and you can learn it after a 2-days online seminar? Sounds like a too-good-to-be-true story doesn’t it? Of course, it does. It would be generous to say that design thinking is now a pale shadow of a culturally rich design approach applied to architecture and engineering in the 1960s. Since 2005, Standford University and a few consulting companies have dumbed down and repackaged design thinking as the simple 5-steps process we all know (empathize, define, ideate, prototype, and test).

What’s been conveniently lost in translation is that getting decent at step 1 (empathize) requires anything from five to ten years and a lot of dedicated design practice. Just spending an afternoon learning about it with sticky notes on the wall about idealized customers’ persona won’t cut it.

That being said, yes, as a startup or a multinational, working on your market empathy is critical (even if you’re not concerned by design thinking). Interestingly enough, market empathy is not about being customer-centric. It’s about anticipating, and sometimes just ‘feeling’ where your market might be moving soon enough. It’s getting to know your core market so well that you can thin-slice singular moves and decide for yourself if they have a chance to scale as new problems to be solved.

And when you need to invest time in design thinking (which we have to do quite often for our customers), make sure to hire people with an actual track record in design.

4. Innovation doesn’t fit in a pipeline

By definition, innovation is about dealing with different levels of market uncertainty. We need radical innovation when highly volatile markets arise. When new technologies introduce disruptive cost-to-performance ratios, we talk about disruptive innovation, etc. As such, innovation is not a thing. It’s an umbrella term of vastly different strategies for adapting or sparking changes in the market.

If you rely solely on an innovation pipeline, you might be missing the whole point as a corporate innovator. Start out with a few ideas, select the best one, refine it, and work on it for the next 3-5 years before launch… All this supposes a very stable market. A market that won’t change much between the initial step of ideation and launch. You’ll deliver at best incremental innovation, more often an utterly out-of-sync product.

In contrast, game-changing innovation can only be birthed in some degree of significant market volatility–whether you endure it or it’s of your own making. It cannot be predicted five years ahead of time and methodically processed in an assembly tunnel. The critical complexity associated with innovation can never be removed from the equation. If in doubt, consider your 2020 Strategic Plan written back in 2010. It didn’t age very well, did it?

Dealing with the conundrum of making sure you’ll have some innovation ready in a few years while not knowing what to do is called managing a portfolio of projects. Not a roadmap pushing ahead a silver bullet solution, but strategically farming a few dozen projects to maximize your optionality. If in doubt check how VCs make money.

Innovation is a number game: being smart only buys you in.

5. No, startup and corporate innovation don’t really mix

Litterature on how corporations can benefit from startups and how big industries should think more as entrepreneurs abound. Most of the authors seem to be armchair experts with, at best, a minimal understanding of both sides of the table. The critical disconnect that is often seen as detrimental for startups and corporations working together is the decision cycle. As in: “Startups are so fast and nimble, while corporates are slow with Kafkaian decision-making processes.”

I’d suggest that you talk to a corporate investment fund nowadays or to an industrial open innovation team. The hashtag is #FOMO, and decisions can happen in a matter of just a few weeks–yes, Legal will still be a pain. How about admitting that if many startups have trouble getting things done with big players in the markets (as first customers for a proof of concept, or investors), they are all over the place and incapable of formulating their value to a corporation?

And the fundamental disconnect in my experience is this one: startups usually don’t understand their ROI for corporate investors. Their sales won’t impact the bottom line of an industry-level business anytime soon. They have other forms of direct ROIs: scouting the market ahead of Gartner’s hype curve and probing the potential of a new tech ahead of Moore’s law.

In both cases, that the startup survives and gets to a first market is critical for the corporation investing in it. But not that the startup survives and becomes a global success. This is only a nice bonus.