Innovating Innovation Strategy: Part 3

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[In the part-two installment of this three-part article, I showed how the two major growth strategies--push and pull strategies--both fall short when it comes to meeting the demands of innovation. Here are three approaches to effectively confront the unique obstacles that innovation throws our way.]

Play some wildcards. Wildcards are unexpected events that actually happen with regularity. These are big occurrences with wide-reaching implications: scientific discoveries, emerging technologies, environmental changes, social trends, political and economic developments, weather calamities, disease outbreaks, and large-scale conflicts. When these things arise, most people are caught off guard.

But, in reality, we can foresee and prepare to take advantage of wildcards before they arrive. That's because, despite their remarkability, they happen quite often. Be on the lookout. Get several briefing reports--environmental, political, economic--monthly. Understanding these larger issues will help you not only anticipate wildcards but also make use of them when they appear.

First, list all the possible wildcards that might affect your organization and consider the probability that they'll happen. Then, evaluate the impact that they might have on your innovation initiatives. Develop warning signs--benchmark points that you can use to make sense of the future. For example, you might determine that if the price of oil goes under $40 a barrel, it will trigger a great loss of revenue in certain Middle Eastern countries and a gain in Central African countries, which will, in turn, spark changes in currencies or create conflicts. Eliminate the unpredictability of wildcards by incorporating them into your everyday planning cycle.

Get out of sync. For most people, planning cycles are like trips to the dentist: semi-annual obligations that are just part of your operating rhythms. The problem is that when they become so routine, we fall asleep at that wheel. We stop being creative. We lose our adaptability and flexibility.

That's why, when we're going through our planning cycles, we need to actively look for dislocating events--things that take us out of our normal ways of thinking. In his famous article, "Innovation and Entrepreneurship," Peter Drucker tells leaders to seek out incongruities--the inconsistencies that other people don't see. Be aware of new processes, shifting industries and markets, and changes in demographics and popular perceptions.

Karl Weick and Kathleen Sutcliff wrote an influential book, Managing the Unexpected, that advises innovators to do precisely this: develop built-in mechanisms for events that create discontinuities. They offer the great example of flight operators on aircraft carriers. As they come in to land on these incredibly small landing decks, pilots have a tendency to overshoot their destination. This is an enormous problem that the Air Force and Navy have struggled with for many years. What air traffic control centers gradually learned is that pilots needed to give up their own authority, that the landing signals officers are the ones who actually know what to do during these landings. By studying failure and by taking those failures into account, air controllers came up with a new-and-improved method to safely manage these precarious situations.

The key is paying attention to who actually has the most knowledge. It's a mistake to assume that the most senior person at the highest point knows the most. Disregard conventional hierarchies and instead reflect on the things that don't fit. By embracing the asymmetries, you will learn along the way and, with each iteration of your strategy, you'll get smarter, finding power in your mistakes.

Sail against the wind. Sir Francis Galton developed the game-changing concept we know today as regression to the mean: the more people do something, the more likely it will be that everyone, when taken together, will be correct. He discovered this at a fair in Victorian England, when he gave butchers and farmers slips of paper and asked them to guess the weight of a cow. All the farmers guessed a heavier weight--since they make more money on heavier cows--and all the butchers guessed a lighter weight--since they make more money by buying leaner cows. Galton noticed that, when compiled collectively, all the farmers and butchers actually guessed the proper weight of the cow. The point was this: as we get more and more data, the highs and lows are eliminated so we get a stable norm.

There is a dark side to this notion of regression to the mean: as soon as everything gets pulled to the middle, we lose the kind of useful novelty and positive deviance that is so crucial to innovation. This is the danger of all these new forms of collaborative innovation: the more voices we consider, the more likely that they'll average out to something uninteresting. Emerging forms like creativity clusters, crowdsourcing, crowdfunding, idea markets, innovation jams, and open source innovation all aim to get everyone on the same page. As a result, they stop us from finding the outliers.

Avoid the banality of conformity by sailing against the wind. Be a contrarian. See what the crowd is doing and then dare to do the opposite.

These three innovation strategies might seem improvisational, risky, and erratic. But that's what innovation asks us to do: to make things up as we go along. Forget what you've heard about coming up with a plan and sticking with it. The only given in innovation is uncertainty, so it's time to make uncertainty work for us. What Kierkegaard said of everyday existence, we can also say of innovation: it can only be understood backwards but it must be lived forwards. In the face of the unknown, all we can do is move forth. Are you ready to take the leap ahead?