By Rana Gujral, CEO of TiZE
In today's startup culture, the ideal company is a hotbed of ideas, innovation, and growth. But the reality is much more stagnant: big, hulking companies are often where innovation goes to die. In fact, theoretical physicist Geoffrey West hypothesized that when a company hits 50-100 employees, whatever creativity and innovation they had at the start begins to die off.
Too often, these big organizations believe that radical change just isn't worth it. They point to companies like Oracle, which often chooses to aquire new tech instead of inventing it. Or maybe they're locked into existing customers and business models, convinced that new products aren't worth the risk because they don't fit the company's pre-existing mold.
Inertia, competition for resources, and power dynamics can strangle innovation before it even begins. But what if innovation looked different at big companies? Smaller, and seemingly harmless? I'm talking about incremental innovation, which can solve that stagnancy. Think of incremental innovation as paint: one coat isn't impressive, but add layer after layer and a picture starts to emerge.
Here are five ways to make change happen without giving upper management a heart attack:
Start small to go big
Don't get bored by the seemingly small nature of incremental innovation. One of the best ways to innovate incrementally is to start innovating around other categories in an already-established market. Take my old employer Logitech, for example. The company was known for its computer mice, but when it invested in designing other products like Bluetooth speakers and tablet accessories, it scored over $400 million in its first year. Or there's Coca-Cola: when the company expanded from soft drinks to water in Africa, it secured an even bigger slice of the market.
Feel the pain
Some of the best innovations come from "pain points," or annoying inconveniences that can drain energy and time. Paying attention to pain points helps a company wring innovation from products and processes it already has in place. The concept is so successful for Intuit that the company hosts regular "painstorms" to create products catalyzed by real-life customer problems.
Customer "pain" isn't always something that builds up over years and years, either. Sometimes a new product can create new "pain"--and though that sounds apocalyptic, it's actually an interesting jumping-off point for incremental innovation. Take the iPod, which was designed to be used with headphones. Customers realized that they now had all this amazing music in one convenient location, but no way to share it with others. That new "pain" led to a new market for docking stations and speakers that worked explicitly with iPods.
Look backward to look forward
Time for a couple of personal anecdotes: early in my career, I headed up a product engagement at Kronos, whose earliest product was as a clock that eliminated buddy-punching (that is, fellow employees punching in and out of work for each other) for hourly workers. Over time, the software side of the company overshadowed the hardware side and there was a real internal lobby that considered the hardware legacy to be a burden.
My small team, the Data Collection Group, plowed ahead with the belief that instead of radical innovation (scrapping a 15-year-old product), Kronos should opt for incremental innovation (coming up with the next generation of that product). It took twice as long as we thought it would and cost three times as much, but the new product (Kronos 4500 Badge Terminal) was an immediate success, eventually becoming the world's best-selling time clock. It raked in over a billion dollars during my tenure with Kronos, and it cost less than $10 million to produce.
Next time you're in an airport, look for the Kronos time clock--it's in every TSA station in the United States. Not bad for an old idea.
We did it again at Cricut, where I was hired to lead the turnaround for an iconic company that used to be a market leader in the craft and DIY space but was, at the time, flirting with bankruptcy. We decided to dig in and go back to the company's roots. So we focused on the basics that led to Cricut's initial success--functionality, design, and ease-of-use. A series of incremental innovations in hardware, software, pricing, and delivery led to a radical innovation in the overall product experience when Cricut Explore was first launched. Cricut Explore was an instant success, crafters saw that the brand was back on the right path, and the Cricut sold out in the six to seven months after its initial release.
Don't bring sexy back
Don't let flashy tales of "disruption" distract you from the potential for smaller change--something as unsexy as basic product optimization can yield real innovation. For an example of how grunt work paid off, look to Hubspot, a company born from the need to manage customers. Hubspot didn't invent CRM, but it sure transformed it. Hubspot recently reported $181.9 million in revenue for 2015, a 57 percent increase from the previous year.
Keep it real(istic)
Consider the internet. When DARPA engineers started to link together their computers in the late 1960s, they weren't looking to revolutionize communications or computing--they were simply trying to connect their machines to send messages from one place to another. Their goal was realistic and incremental; their result was as radical as any. Companies that embrace pragmatic goals can do exactly what those internet pioneers did so brilliantly before: create long-term change while meeting short-term business goals. And that's what incremental innovation is all about.
With contribution by Erin Blakemore of Hippo Reads.