Hear the word “innovation,” and you might think of a research and development lab, a design group or a startup venture. But today innovators are in demand everywhere – from the factory floor to the salesroom, the information technology help desk to the human resources department, the employee cafeteria to the C-suite. Innovation isn’t a department. It’s a mindset that should permeate your entire enterprise.
No matter the venue, the feedstock for innovation is insight – an imaginative understanding of an internal or external opportunity that can be tapped to improve efficiency, generate revenue or boost engagement. Insights can be about stakeholder needs, market dynamics or even how your company works.
Several Fortune 500 companies have been founded on a single insight about what customers want. Starbucks brought a little bit of Italy to coffee shops. Home Depot gave do-it-yourselfers access to professional supplies. The Body Shop was built on the notion that buyers of beauty products care about humane animal-testing practices. Inside your company, insights can lead to more-efficient operations, simplified processes or leaner structures.
Insights can be powerful, but how do you find them? Should you brainstorm with colleagues? Sift through masses of data? Simply introspect? Or carry on as usual and wait for the proverbial apple to fall on your head?
In our combined half-century of working with innovators at startups and within large corporations, we’ve found that the best insights tend to come from sources that can be categorised.
On the basis of our experiences with and research into entrepreneurial ventures and product-development groups in varied industries around the world, we have outlined seven “insight channels” that can be used by would-be innovators in any function or role:
ANOMALIES. Businesses today are awash in data. Innovators pore over this information looking for promising ideas, but often they focus on means and averages, which lead to broad conclusions. Sometimes the real opportunities lie in the results that deviate from business as usual.
The smart innovator knows to notice and then follow up on surprising data. To look for anomalies, ask questions such as: Is your market share or revenue abnormally low or high in a geographical market? Are you having unusual success with a specific customer segment? Are some of your salespeople unusually productive? Are some of your suppliers able to deliver unusually quickly? Then dig deeper. The deviant numbers may be the tip of the iceberg, hiding a valuable insight below.
CONFLUENCE. When several trends come together, their intersection can be fertile ground for insights. For instance, the confluence of mobile telephony growth, social networking and increasingly short attention spans has spurred the creation of social media applications.
New social habits, technologies and areas of interest are forming all the time across all facets of life. The smart innovator looks at how they fit together. Ask yourself: What are the major economic, demographic and technological trends affecting my organization, industry or market? How do those trends intersect?
FRUSTRATIONS. Life’s irritations are often a terrific source of ideas. Put yourself in the shoes of customers, colleagues or suppliers and ask: What’s most frustrating about your products, processes or workplace? What bothers you personally about your business? What workarounds do people use to get their jobs done? How could they be improved upon? Can you make customers’ lives easier or company meetings less painful? Can you reduce the hassles your suppliers face? If you feel people’s frustrations, you can find valuable innovation opportunities.
ORTHODOXIES. When something has always been done the same way on your team or in your organization or industry, it’s worth asking if there’s an alternative. Traditions often block potential innovations because people are reluctant to abandon the tried-and-true. But when conditions change, so must traditions.
Orthodoxies hide in every organization, industry and market. To uncover them, ask yourself: What beliefs do we all hold sacred? Why do things have to be this way? What if the reverse were true? What opportunities would be opened up if we abandoned those assumptions and beliefs?
EXTREMITIES. Businesses, appropriately, spend most of their time concerned with their mainstream stakeholders. But sometimes it is the “positive deviants,” as Oxford University’s Richard Pascale calls them, who are a rich source of ideas or insights, teaching us innovative ways to overcome incredible odds or solve seemingly intractable problems.
Positive deviants may be visionary customers who can help you see trends before they become mainstream. They may be manic co-workers who are passionate and don’t take no for an answer. They may be enlightened shareholders who can help shape your company’s strategy. Innovators must look at the fringes of stakeholder groups and ask: What can we learn from those who are most intense in their complaints or enthusiasm that we could apply to our company or our role?
VOYAGES. When business turns stale, innovators get out of their own offices to visit “customers” – whether that means employees they manage, colleagues who rely on their work product or the people who buy their goods and services. These “voyages” into different worlds are necessary because all behavior takes place within a rich sociocultural context; it’s impossible to understand what others are thinking when you’re sitting alone at your desk. Designers and product developers have long understood how important it is to take this anthropological approach.
Learn how your stakeholders live, work and behave. Ask yourself: What are the social, cultural and environmental factors that affect their preferences and behaviors? How can we create solutions that respond to those factors?
ANALOGIES. Sometimes other teams, business units, companies or industries have adopted useful ideas or systems that haven’t crossed the border, so to speak. Can you import innovation – even from a place that seems far removed or exotic?
We advise innovators to study a wide range of unrelated functional groups and industries to look for analogies that they can adapt to their domains. After all, innovation is not about bringing something new into the world. It’s about usefully applying something that is new to the situation, no matter the purpose for which it was invented.
Our list of insight channels has evolved over the years and will no doubt continue to change and grow. Other observers could probably add a few categories of their own. But we’ve consistently found in our research and work that these seven are powerful drivers of innovation. Although they’re most commonly used by entrepreneurs, developers and designers, they can help you in any role and any context where new thinking is required. Few people find great ideas on a blank canvas. Most of us need our imaginations channeled.
TO RECAP: THE 7 INSIGHT CHANNELS
+ Anomalies: Examine deviations from the norm. Do you see unexpectedly high or low revenue or share in a market or segment? Surprise performance from a business process or a company unit?
+ Confluence: Find macro trend intersections. What key economic, behavioral, technological or demographic trends do you see? How are they combining to create opportunities?
+ Frustrations: Pinpoint deficiencies in the system. Where are customer pain points for your products, services or solutions? Which organizational processes or practices annoy you and your colleagues?
+ Orthodoxies: Question conventional beliefs. Are there assumptions or beliefs in your industry that go unexamined? Toxic behaviors or procedures at your company that go unchallenged?
+ Extremities: Exploit deviance. What can you learn from the behaviors and needs of your leading-edge or laggard customers, employees or suppliers?
+ Voyages: Learn from immersion elsewhere. How are your stakeholders’ needs influenced by their sociocultural context?
+ Analogies: Borrow from other industries or organizations. What successful innovations do you see applied in other disciplines? Can you adapt them for your own?
(Mohanbir Sawhney is the McCormick Foundation chair of technology and the director of the Center for Research in Technology & Innovation at Northwestern University’s Kellogg School of Management. Sanjay Khosla is a senior fellow at Kellogg and was formerly the president of developing markets for Kraft Foods (now Mondelez International). They are the co-authors of “Fewer, Bigger, Bolder: From Mindless Expansion to Focused Growth.”)