How Great Entrepreneurs Spell Continuous Innovation19 August, 2015 / Articles
As a startup investor in this age of the entrepreneur, I see many more startups, but innovation is still hard to find. The most common proposals I hear are for yet another social networking site (over 200 active), or another dating site (now over 2,500 in the U.S. alone). Startups which display real innovation, such as alternative energy sources and new medical treatments, are still rare.
In my experience, finding real innovation in existing company environments is even tougher. Overall I like the principles in the classic book “Robert’s Rules of Innovation: A 10-Step Program for Corporate Survival,” by Robert F. Brands. He outlines the key steps which together spell “Innovation,” that I believe apply equally well to startups as well as corporate environments:
- Whether we are talking about startups or corporations, innovation requires a leader who can inspire others to step into the unknown. Followers and linear thinkers need not apply. Inspiration requires a vision, and an ability to communicate it to others.
- No risk, no innovation. An entrepreneur looking for a sure thing will never innovate. Savvy investors tell me that startup founders who claim to have never failed are either lying or have never tried anything innovative. Failure is the best teacher I know.
- New product process. Innovation is not a random walk into the unknown. It starts with a vision, but benefits quickly from a structured process of idea generation, evaluation, prototyping, customer feedback, and success metrics. Set milestones and meet them.
- A technical champion may drive a specific innovation, but the business leader has to own the result, in order to drive an appropriate business model, customer acquisition, support, and a growth strategy. Business risks are not just development risks.
- Value creation. Innovative technologies have no value until they are turned into solutions to real customer problems. Creating intellectual property, including patents, is the key to long-term value and a sustainable competitive advantage.
- Many innovations are jeopardized by team members and leaders who are hesitant to accept full accountability. This includes personal and team commitments to delivery schedules, quality assurance, manufacturing, and distribution requirements.
- Training and coaching. It all starts with teaming and hiring the right people, those with a can-do attitude, and willing to take responsibility. But these still need coaching on the unknowns, and ongoing education to keep up with the industry and the technology.
- Idea management. Innovation is not a one-time thing. Every business needs a continuous improvement process to collect and funnel new ideas for the next cycle. Be sure to include your customers in this process, as well as internal team members who are responsible for the solution.
- Observe and measure. The best entrepreneurs stay close to the innovation process – talking to customers and technology leaders directly. They benchmark their ideas against competition, use metrics to track acceptance, sales growth, and return on investment. Remember that innovation cycles need to keep getting shorter.
- Net result and reward. Reward the team and key leaders for milestones achieved, return on investment, and results in the marketplace, rather than effort expended. Your people are the key to innovation, more so than a new technology. Find individual key motivators, including peer recognition, and use them often.
True innovation is hard, because most team members and customers think linearly, and are inherently resistant to change. Yet continuous innovation is really the only sustainable competitive advantage, so make it a part of your mantra and your business culture. How well does your business spell “Innovation” these days?