I would like to share an idea with you that I believe will have a huge impact on the future of your business. Please take a moment to think about this carefully as it is a very BIG idea.
“To be successful in the future, the rate of internal innovation must exceed the rate of external innovation.”
Or, to put it in a formula for my engineering friends out there:
II > EI
This means that to succeed — actually, just to survive — your company has to be more innovative, more creative and able to add more value than any other company that competes with you. Your business will have to develop new ideas, products and services that your customers highly value, and you will have to do it faster than anyone else around you. In the old days, like…10 years ago, this was a daunting but not impossible task, but today, with the velocity of change and innovation constantly moving things forward at a furious pace, this is now an incredibly hard hurdle to get over consistently. How you do it? Here are a few suggestions.
Embrace the idea of creative destruction. If someone is going to replace your product or service with something better, cheaper, faster or more elegantly designed…it should be you, not your competition. Think about Apple; the minute the company comes out with a new product, development teams immediately go to work to build something that will replace it.
Think quality and quantity. The best way to get really good ideas is to have lots and lots of ideas. Some will be spectacular and some will be complete duds, but the only way to find that really cool, innovative idea is to have it be one of 100 ideas up for consideration.
Reward prudent risk-taking. One of the best ways to succeed quickly is to fail faster than any of your competitors. So, if you’re going to push your people to be highly innovative, then you have to make it safe for them to fail so they can learn from their failures and iterate faster toward success.
Shake up your thinking. An excellent way to get superb new ideas and innovations is to look at places that seem to have almost nothing to do with your current product or service. Look at other industries and read books and magazines that are out of your normal realm. Invite speakers to talk about philosophy or art if you’re a manufacturing company, or ask them to speak on process reengineering or theory of constraints if you’re a service-based business. Most innovations come from taking your existing experience and combining it with a new idea to create a third idea that did not exist before.
Ask better questions. There is a saying going around in Silicon Valley right now: “Questions are the new answers.” I’m not much for trendy things, but this one is spot on. In 20 years of working with companies including Microsoft, Apple and Qualcomm, I have learned that there is enormous power in asking thoughtful, focused and courageous questions. Some people think it looks weak to ask lots of questions, but it is exactly the opposite; great questions lead to great answers and great innovations.
Chuck it. When you come up with an idea that seems like it might have a lot of potential, test it out quickly. Build a prototype, write a little code — test the idea quickly in a small way and you will soon find out whether it’s a great idea or one you need to dump and move on.
Perfection is the enemy of good. Very similarly, don’t wait until something is absolutely perfect to bring it to market. I have seen many products that never actually make it to market because there’s always something more they think they can improve on. This is why they invented the idea of version 2.0, 2.1, 2.3…
There is simply no escaping this fact: If you want your business to thrive in the future, you’re going to have to create a culture of innovation, agility, adaptability and speed. Trusting the products and services you sell today to carry you for the next decade is the fast road to bankruptcy. Again, I’m not one for trendy sayings, but I hear this one at client companies nearly every week: “Innovate or Die!” It’s the truth.
BTW — it is exactly the same for YOU. If you want to stay relevant and valuable to the marketplace, your personal rate of innovation must exceed the external rate of innovation in the people around you. Yikes!