Why Innovate?

Those of us who are innovators know this already. It doesn't hurt to be reminded of the purpose and importance of innovation to business, though.

In business, everything always changes. Or at least that's the safe assumption. The regulatory environment, the competitive landscape and the maze of technology are constantly shifting. Businesses that decide they do not need to innovate for the future are making an interesting choice: the choice not to exist in the future.

Eventually, if a business stays in one place for long, it becomes irrelevant. Your competition is always looking for new, better, faster, cheaper ways to satisfy your customer's requirements. Your customers are also discovering new needs and opportunities of their own. A business that ignores this constant change can virtually guarantee its non-existence in the future.

If the cost of ignoring innovation seems high, so does the cost of innovating. Many businesses have had the experience of R&D projects that floundered and went nowhere while swallowing vast quantities of dollars and time. The next logical step is an interesting one. Having had that negative experience, the directors often conclude that if that is how innovation is done, then they should steer clear of it from now on.

The correct conclusion should be that there must a better way than that to pursue innovation. Missed milestones, blown-out budgets and vague goals that are never realized are hallmarks of the DIY approach to innovation that so often results in catastrophe. If that is happening in a project, the solution is easy. The solution is experienced Leadership with specific training in the art and science of Innovation.

Businesses invest significant capital in their production assets and in the connections that make the company what it is. Customer relationships, partnerships with complementary businesses, and mutually profitable arrangements with vendors and service providers. The part that is often overlooked is the investment in the company's corporate knowledge.

When smart companies invest in themselves, they look after all three categories: assets, connections and corporate knowledge. The latter is done by actively pursuing new, accurate and valuable knowledge that keeps their business relevant into the future. And that, as I've said previously, is the big secret of what innovation is all about. Creating knowledge, not prototypes.

Why innovate? Because there's money to be made! But only by businesses that can respond to change with vision, agility, and purpose.

The Big Secret of Innovation Revealed

Hi again! The questions I am getting are mainly along the lines of, "What do you mean by 'fixing innovation'? Can you give an example?" Yes. I can.

Client: I need some help building a prototype. The first two didn't work, and now our budget is nearly wiped out.

Me: Why do you want a prototype? Wouldn't you rather have a finished product?

Client: Of course, but we aren't ready to make the final product yet.

Me: Why not? What's stopping you?

Client: Um... I guess we don't know how yet.

Me: Exactly. So how is a prototype going to help you?

Client: Maybe, after we build it, we'll know how to make our final product.

Me: Maybe? You're leaving something as important as that to chance? Forget the prototype, and let's focus on what's stopping you from building a product: missing knowledge.

The big secret that nobody will teach you in business school or engineering school is that innovation is NOT about building prototypes. It is really about creating knowledge. Sometimes building a prototype is a good pathway to that knowledge, but usually it is either the most expensive and time-consuming path, or no path at all.

So many innovative companies charge ahead building a prototype without understanding why or whether they need to. I advise them to stop and question what's keeping them from building the final product. I know that is seldom possible. The important thing is knowing exactly why.

Then, that obstacle or obstacles can be targeted with a specifically designed R&D program that may or may not involve building prototypes. But it is guaranteed NOT to involve wasting time and money!

Unless a prototype is designed specifically to teach you what you need to know, it is likely to be a pointless exercise. Designing a prototype, a test or a research project to produce specific knowledge requires specialized training and experience. You won't save money doing it yourself or with inexperienced technicians.

Another common prototype mistake is to confuse a research prototype with what we call a "Pre-Production Run" or a "Production Pilot Run." These two are totally different and have specific purposes.

When a company doesn't understand the difference, they often purchase 20 or 100 of each part needed to build a research prototype, thinking that they are certainly going to use them in the production model, and it's cheaper to buy bulk. This is almost always a waste of money. Worse still, it paints the design into an awkward corner by constraining it to re-use these stockpiled components long after they are found not to be ideal.

That's why I'm always repeating, "Before you prototype, get expert advice or it could be your time and money straight down the gurgler!" Visit me at www.p-r-o-system.com.