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Profitable innovation does not just happen. It must be managed, measured, and implemented correctly. Robert Shelton, innovation consultant, Executive Fellow at the Miller Center for Social Entrepreneurship in Silicon Valley, and co-author of Making Innovation Work, shared with PARK INNOVAARE his outlook on innovation and on how organizations should approach it.
PARK INNOVAARE: If you were asked to define innovation in three words, what would they be?
Robert Shelton: Delivering new values. That is what innovation is all about. It can be something small, an incremental innovation – like a new way to bottle water. Or it can be something radically new – a completely different way to hydrate. No matter how big your innovation is, it should always generate new value. And value can come in many different forms: optimized costs, improved performance, faster delivery, higher customer satisfaction, more environment-friendly products, etc.
We all want to innovate and to be innovative. Is there a way to foster innovation?
At the source of any innovation is an idea. I believe people have a predisposition to ideation. Humans are inherently creative. I like to think of us as "Homo Innovatus". What is important to understand is that we do not all innovate in the same way. Some of us come up with brand-new ideas, others are brilliant in implementing those ideas, turning them into reality, and some are just the best in selling them, making them socially acceptable. Creativity comes in all those different sizes and shapes. The key is to realize what kind of innovators your project needs and to put together the right team.
We do not all innovate in the same way.
Is innovation all about the right people or is there more to it?
The right people are essential for innovation, but even the best team will not do the job if the conditions are not right. To establish a successful innovation unit, a company needs to create an environment where ideas can grow, pay attention to processes in place, and educate its employees. Innovating is like gardening. You plant a lot of seeds, you do your best to optimize the environment, you set up the right irrigation and fertilization process, and you give it some time. Not every seed will be a winner. But some of them will bear fruit. And if you keep working on it, it will create a steady flow of innovations.
You've been working with over 30 innovation incubators and corporate ventures in different industries and markets. What are the key ingredients for such an innovation unit?
First of all, a company needs to believe that innovation is worthwhile and to commit to it. Many do not take it seriously. They just see it as an interesting activity, but not essential to their survival. This false attitude leads to lost resources and inept innovation strategies. After securing the management's support, it is important to find the right people for the job and establish processes that will allow the innovation team to operate efficiently. The mistake many make is to trust the innovation unit to people who were trained in growing the existing business. Oftentimes, their attachment to the existing business and processes stands in the way of generating new businesses. Finally – and this is perhaps the most difficult thing to do – you need to set up an internal organizational architecture for innovation. New ideas often do not find their place within the company or even threaten the core business – Kodak being a classic example. The innovation unit should be able to work together with the existing business and leverage its knowledge without getting in the way.
What are the three most important dos and don'ts for an enterprise to be successful in innovation?
It is going to be very difficult to condense it down to only three dos. I guess I would say, first, you should govern innovation as you would govern any business process. People overlook it sometimes, believing that innovation will occur on its own. Secondly, you should partner aggressively, find ways to collaborate that increase the value you are creating. Thirdly, you need to find a multifaceted, inquisitive, empathetic leader who will motivate and drive a very wide range of talents.
Innovation needs a multifaceted, inquisitive leader.
As for don'ts, do not work yourself into one model. Adapt and change your innovation approach continuously and have it mature. Innovation develops in stages. Companies need to learn to recognize these stages and readjust. Then, do not assume that people in your organization understand what you are doing. I have seen innovation ventures die because of "organizational antibodies". Not everybody understands innovation and the way it works. In addition, the biggest part of today's management in established organizations comes from areas other than innovation – manufacturing, sales, operations, finance, etc. – and they are not accustomed to the rules of innovation. And last, but not least, do not ignore data. It helps you understand how you can do things better. Many get excited by the phenomena of innovation and do not see where and how they can improve.
Innovation is unthinkable without collaboration. How do you define successful collaboration and how should companies approach it?
Often, collaborating means learning a new language – that of your partner – and understanding a different working culture. It is a different mindset, a different type of relationship. For example, one of the first things companies learn in establishing collaborations is that their NDAs cannot be 15 pages long; they would otherwise tear down a potential collaboration. You become good at collaborating not just by learning to choose the right projects and establishing a dialogue with your partners, but also by efficiently sharing the jointly created value. You know you are a successful collaborator when you become the partner of choice.
Collaborating means learning a new language.
Innovation is often seen as a matter of trial and error. Is this true?
There is a colloquial expression that says, “If you are not failing, you are not trying hard enough”. You need to find out what is not successful, as that will help you get to the things that will be the most successful. Take Thomas Edison and the lightbulb, for instance: he tested all kinds of filaments before he finally found the one that would generate enough light without burning up right away due to the current. It was his diligence to find out what didn't work that allowed him to find what did work. There is nothing bad about trying and failing. But in innovation, it is important to learn from your errors and structurally apply what you have learned.
Nowadays, not only companies invest in innovation, but also governments, trying to recreate Silicon Valley. Is there a way to do so and make this “Silicon Valley effect” last?
Many have done it. What we observe in all the cases of such innovation hubs is that you need certain elements such as universities that help create IP, financial availability, a source of entrepreneurs that are willing, who know how to run innovation. Finally, you need an industry that is booming, as was the case with the computer chip industry here in the Valley. This will get you on a roll. As for how to keep it going, you need to manage yourself and adapt. The biggest danger for hubs like Silicon Valley: complacency.
About Robert Shelton: Robert Shelton coaches entrepreneurs and corporations across six continents about how to grow and scale for social impact and profitable operation. He was one of the co-founders of a clean tech incubator in Silicon Valley selected as Best Business Incubator and one of the Ten Top Incubators. In addition, he was designated an Innovation Champion by the World Economic Forum and has been a featured speaker at Summer Davos, House of Commons, Stanford University, University of California, USC, MIT Media Labs, and Carnegie Mellon University Silicon Valley. His book, Making Innovation Work, was one of the best-selling books in its second publication, and has been translated into 10 languages.
Video interview with Robert Shelton.