Innovation - An Interview With Rick Boersma

When we asked Rick the following questions, this is what he had to say...

1.  Do you think companies are more concerned with product innovation than enterprise innovation? Why? Does the economy have anything to do with it?

I’ll be provocative here and say that companies should be more interested in product innovation then enterprise innovation because of the numbers associated with breakthrough products.  Truly superior new products have 4-5 times the success rate, market share and rated profit of “me too” new products.  

Having said this, the reality is that few companies are willing to dedicate the resources necessary to ensure breakthrough innovation on either the product or enterprise side.  Most innovation in most organizations is incremental.

Most enterprise innovation efforts are focused on the maintenance or mild improvement of the status quo.  More often then not it’s focused on incremental cost-savings.  In fact, it’s questionable whether it should even be called innovation - it’s really problem-solving.

Does the economy have anything to do with it?  Absolutely.  Under pressure companies are risk-adverse.  Rather then making bold-bets they focus on maintenance.  The irony of course is that while they do this, their competition may pass them by.  The low-risk strategy in the short-term is high-risk in the long-term.

2.  Is there a gap between how companies value enterprise innovation versus the resources they actually devote to it? What are the reasons behind this disparity?

There is absolutely a disparity between how companies say they value enterprise innovation (or innovation of any kind), and the resources they devote to it.  The proof of this is evident in an examination of the financial-results posted by different companies in any given sector.  Truly innovative companies in every sector out-perform their less innovative competitors by an order of magnitude.  Although lip-service is paid to “innovation”, relatively few companies follow through.

The principle reasons are 

1. A confusion about what innovation actually is, followed by 
2. Either a lack of understanding or commitment to doing what’s required to innovate.

Let’s look at each of these briefly.  

1. As mentioned above, innovation (which produces breakthroughs) is not the same as problem-solving (which produces incremental solutions). Most companies don’t distinguish between the two, and take the path of least resistance, which is incremental innovation.
2. Enterprise innovation, or the creation a culture of innovation, requires an OD or organizational-change approach.   This in turn requires a capital investment, but even more importantly, the investment of time + energy.  If leadership truly wants to create an innovative organization there are some best practices, which include:

• clear, regular communication of support and expectations
• modeling the desired thinking and behaviors 
• understanding of the knowledge skill and behavior that lead to innovation and investing in ensuring people have them
• identification of opportunities - and encouragement for identifying opportunities
• openness to ideas
• ability to assess balance risk and create practice opportunities 
• the ability to encourage innovation at the individual level through the understanding of abilities, style, values and motivation.
• As each corporate culture is distinct, there are also ways leaders can support the development of a culture of innovation that must be tailored to the organization and the point in time.  A process of discovery must be undertaken that creates a strategic, targeted approach for leaders to take to ensure innovation settles in to the organization with the least resistance and greatest return possible.  The discovery categories include:
• Definitions and expectations of innovation within the organization: if innovation is being talked about - how?
• How innovation fits into and contributes to the strategy: how will innovation move the company forward, and how aligned are leaders and others on this part of strategy?
• The current value discipline (operational excellence, customer intimacy or product development) or the service delivery imperatives that are perceived to be in place: what do people think are the priorities when working - doing things efficiently?  Creating deeper relationships with the customer? By adapting and making new offerings?
• Current employee engagement and feedback on the culture:  what are the current benchmarks?
• Iconic success and failure examples: are there common "legends" about trying new things in the environment now?

3.  How important is it that CEOs are bought in to innovation initiatives at a company?

Innovation can definitely happen at the grass-roots.  Innovation initiatives can be driven by individuals, project-teams and departments.  Individuals and managers can work within their own circles of influence and do incredibly innovative work almost regardless of the overall culture of innovation in the company.   But, if one looks at icons of corporate innovation: Apple, Google, P+G...Companies that really do have cultures of innovation ( cultures which allow them to reap a harvest in terms of innovative products and services)  then having the CEO on board is critical.  

Thanks Rick!

About the Author

Rick Boersma

Rick has been in the field of education and training since 1985 working with dozens of Fortune 500 corporations, as well as hundreds of smaller companies, designing and facilitating experiential training programs. Rick's energetic personality and contagious enthusiasm will leave audiences inspired and mezmerized.