Why do executives seem to be risk averse when it comes to innovations?

Most successful executives are inherently not risk averse. They understand the need to invest in order to reap a return.

The key is that proponents of a new invention and potential innovation do not approach the executives with a sufficient business plan that reflects the value of the innovation to the customer, the impact on new and existing markets, the internal and external costs and the impacts on future revenue streams.

Unfortunately, answering these questions about a future innovation is extremely difficult unless the invention has been founded in a innovation process that starts with market recognition and then moves into invention, productization, marketing and innovation. The process today is all too often completely backwards and is driven by existing customer feedback.

The key is to follow a clearly defined invention/innovation process that starts with recognizing a target market and attaching resources based on potential and not based on random results from existing management processes.

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com

Radical innovation - should we do it or not?

Part of the problem with innovation today is the broad definitions that are being applied to the words involved. In reality, most people mean an 'invention process' followed by marketing that creates an innovation.

In this case, 'radical innovation' means innovating a new product or a new market, whereas incremental innovation would be adding innovations to an existing product/market. Radical innovation is often referred to as 'disruptive' innovation because the innovation disrupts existing products and markets.

All companies follow a similar lifecycle that eventually leads to:

1) Commoditized products
2) Destructive incremental innovations
3) Internal instead of external innovations (costs versus revenues)

ALL companies must do disruptive ('radical') innovation if they want to continue to succeed. Utilizing targeted innovation techniques it is possible to deliver disruptive innovations in far less time than the standard 3 to 7 years. This standard, multi-year time frame is a reflection of the normal randomness of most innovation processes. Targeted innovation, the process patented by Innovate the Future, Inc., eliminates the randomness and allows a clear analysis of market potential, revenue potential and minimization of risk. Delivery of innovations to market can occur in weeks instead of years.

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

Is the state of innovation in the US in deep trouble?

Innovation is not a resource that can be depleted like oil or coal. The U.S. still has the potential to be an innovation powerhouse. People are looking at a broad set of problems in their lives and are assuming that innovations of some type are needed to save the day.

There are several problems that are driving the apparent dirth of new innovations:

1) All current innovation techniques have an underlying assumption that innovation (and by inference, invention) is a random process. The concepts of expanding the number of innovators, driving management teams to recognize innovations and forcing executives to take more risk are a reflection of this randomness. More innovators=more random events. Better innovation management=recognizing unexpected events. Risk taking executives=taking a chance on an unplanned innovation that might succeed.

2) As companies age the shift is from external innovation to internal innovation. To create new markets and expand revenues companies must create external innovations. Companies instead focus on internal innovations to reduce costs.

3) With an unsure financial market there are fewer startups and fewer risk takers that are driving disruptive innovations. Countries like China, that, until recently, have huge incoming funds to invest appear to be far more innovative than the U.S. because there are more startups and companies that are driving external innovations rather than internal innovations.
 
To address these problems, companies need to:

1) Drive targeted invention, targeted marketing and targeted innovation. Eliminate the randomness.

2) Recognize the need for both internal and external innovations. Ford Motor company did. GM did not.

3) Understand that following the right innovation approach it is not necessary to spend huge sums of money to be a creative, market disrupting company.

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

Is Disruptive Innovation Largely a Random Process?

Innovation should be more targetable than it is today.

All of the 'innovation processes' proposed today by innovation consultants, except those used by Innovate the Future, seek to:

1) Increase the frequency of random creativity by 'empowering employees'
2) Increase the odds of 'catching' a random innovation by changing management style
3) Telling executives to take more risk with potential innovations

All of these merely wrap the current randomness of discovery and innovation. They don't actually drive targeted innovation.

The book The Innovation Equation by Jacqueline Byrd proposes the equation:

Innovation = Creativity * Risk Taking

This is a perfect reflection of the pure randomness of innovation today. Increase the number of people randomly creating and increase taking risks and you will eventually find a viable innovation from random events.

Innovate the Future's patented Targeted Innovation process does not require more people, a change in management or an increase in risk taking. It is driven by targeting your market, creating targeted inventions and deploying targeted innovations. Deployment can occur in weeks or months, not years.

David Croslin
President, Innovate the Future, Inc.

www.innovatethefuture.com
www.davidcroslin.com