I was facilitating a group of senior leaders who were tasked with leading the innovation effort in their respective organization and started the facilitation with the simple yet profound question –
“How do you define innovation?”.
The best answer I’ve so far received to this question is the following:
“Innovation is applied problem solving leading to generation of value.”
The next question to ask then is the following:
“Which problems are worth solving and where do we find them?”
This is the first step in the innovation process. If we don’t pick the right problems, no matter how interesting our solutions are, we will end up in a struggle to generate value.
I believe that there are four ways to find interesting problems worth solving.
Solve a problem that you already face:
This is the easiest way to innovation. In the course of going through our days, we come across many things that frustrate or anger us. Processes that only add more bureaucracy, tools that don’t work the way they are expected to work and many more. A process or tool that reduces the productivity of our employees, customers or partners. These are all around us if we look at them. We can start from there.
Everyone in an organization should be expected to loo k and callout these problems and solve them (if it is possible to solve it by themselves). If not, we should maintain a list of such problems that everyone in the organization can access and the same should be continuously monitored by the leaders.
The problem at the top of this list should always be addressed as quickly and decisively as possible. This does two things. It helps in increasing the overall productivity levels within the organization and also sends a message to the entire organization that innovation is an ongoing process and the leaders within the organization take it seriously and so should everyone else.
Observe a problem and solve it:
This is where to look at the world (outside and inside of your own organization) for interesting problems that you could potentially solve. This is where the power of observation comes in handy. You will be surprised at how easy it is for us to miss seeing problems all around us. Just observe our employees/customers/prospects/partners go through their days and see what causes them agony or frustration. Not enough for them to list it down as a problem to be solved but enough to get them to wince.
These are problems that either they have gotten so used to the problem that it doesn’t even register as a problem to them anymore. There are a lot of different ways to observe that could lead us to look at these and identify what they really are – problems which needed solving. These are problems that everyone can see but not many identify as opportunities.
By deciding to observe a specific set of people (employees, customers, prospects or partners) we are being intentional in terms of what kinds of problems we are looking for. Hence, these kinds of problems typically leads to innovations that either makes it easier to do business with you or ends up in producing a new product or service that either serves the existing customer or adds a new customer segment to your existing customer segments.
Anticipate a problem and solve it:
This is a difficult thing to do. So, you will find that when done well, solving these problems can lead to significant gains or even competitive advantage for the business. The way to do this is to look at the trends that are playing out in the marketplace and sort them into hard and soft trends. Soft trends (commoditization of machine learning) are trends that have a decent chance of playing out while hard trends are trends that will definitely play out (aging population in a specific market). Look at the long term and short-term trends.
And if you extrapolate these trends and imagine how they will play out in the life of your customers, partners, prospects and employees, you can imagine what kinds of problems will they create for this set of people. Once we are able to imagine these problems, we could then look at how to go about solving them. This enables us to create solutions to problems which are neither currently faced by the population nor are these currently observable. This will mean that you would be one of the first to solve this problem and can then use this early lead to drive competitive advantage for your business.
By the very definition of how we identify these problems (we are future gazing), there is a probability that the future might not play out the way we expect it to and hence there is a risk that your solution might try to solve a problem that never becomes a problem. However, that is the risk that we need to take if we truly want to out-innovate our competition.
Create a problem and solve it:
This is the hardest way to innovate but at the same time when done well can create significant value. This is when we are either able to turn something that people are perfectly happy about their status quo and turn them on their head make people frustrated about the status quo. This path to innovation is all about creating and managing perception and influence. Hence, this requires a visionary to look at a status quo and challenge it and come up with something that is so outlandishly different from the status quo. This also takes a significant amount of resources to challenge existing status quo and create a new perception. This also comes with significant risks and requires an intimate understanding of the psyche of the people whose perception and status quo that you are willing to challenge. This also requires you to have an antagonist that you are going up against.
This is what Apple did to Microsoft when they made Microsoft look like they were not cool anymore. This is what Steve Jobs did when he unveiled the MacBook Air by taking it out of an envelope, thereby making all other laptops suddenly look bulky and old and not cool anymore. This is how Gmail by Yahoo Mail look uncool by offering unlimited space for your email.
Each one of these paths to looking and finding the problem that we want to solve to come up with innovation leads to a different set and different kind of innovation. While one allows you to improve internal productivity another allows you to make it easier for others to do business with you. One allows you to ride on the trends that are unfolding around us and another allows you to create a trend that you will ride. Each one of the pathways comes along with associated level of risk/reward ratio.
Truly innovative businesses work at least two or three of these pathways to innovate. This way they are able to manage a portfolio of innovation projects that will have different success rates and risk/rewards ratios. This also allows us to constantly find some success to celebrate, failures that we can learn from and make our (employees, partners, customers) lives interesting.