Week Four: Devotion – Innovation
Week Four: Devotion – Innovation Read Mark 2:21-22 using any version of the Bible. Jesus often brought innovative metaphors and parables to the conversation as He introduced the Kingdom of God. Here He talks about new wineskins. Describe a situation in your life when you have needed a paradigm shift to see things differently. For example, I have needed to rethink how I teach courses online instead of just putting on-campus content online. 75 words
Week Four: Personal & Professional Development – Innovation
Week Four: Personal & Professional Development – Innovation In 100-200 words answer the following question:
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2.
INNOVATION:
Moving toward Greater Value
There’s a way to do it better-Find it
Thomas Edison
Innovation is the ability to see change
as an opportunity—not a threat
Innovation distinguishes between a leader and a follower
Steve Jobs
As Dean Diehl likes to say, “If you are not innovating, you are
dying.” If creating value is at the heart of every great endeavor,
innovation is about creating greater value for your stakeholders.
WHY IT MATTERS
These days, organizations and companies are moving faster
than ever. If you continue to do what you have always done, you will
be left behind. Whether it is small-scale sustaining innovation or
larger-scale disruptive innovation, or even innovative
entrepreneurship, you, your team, and your organization (for-profit
or nonprofit) need to be asking questions about how to engage your
world more effectively.
Part of this journey is looking at your strategy, and part of this
journey is looking at your culture. Either way, keep asking your
team about innovation. When you do this regularly, you are
choosing a better future.
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HOW IT WORKS
Innovation is a broad topic with many meanings to different
people. For example, there is an overlap between innovation and
entrepreneurship. In this discussion, we will be looking at the
pioneering work of Clay Christensen and others.
The late Harvard Business School professor, Clay Christensen,
was for many years one of the leading voices on the topic of
innovation. In this section, we will be drawing on his work and that
of his colleagues:
• The Innovator’s Dilemma (1997) by Christensen.
• The Innovator’s DNA (2009) by Dyer, Gregersen, and
Christensen (2009).
• The Innovator’s Method: Bringing the Lean Start-up into
Your Organization by Nathan Furr and Jeff Dyer.
Starting with an Outward Focus
Before we unpack the many nuances of innovation, we want to
begin with this simple proposition: Innovation is about them, not
about us. Innovation begins with an outward focus.
An outward focus is consistent with the fundamentals of value
creation. Value is in the eye of the beholder. We don’t decide what
others value; they do. The purpose of innovation is to find ways to
increase the way you and your organization create value for others.
Innovation is about them, not about us.
Innovation begins with an outward focus.
Different Kinds of Innovation
Innovation comes in several different forms. In the following
pages, we will explore these three types of innovation:
• Sustaining Innovation
• Disruptive Innovation
• Innovative Entrepreneurship
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Sustaining Innovation
Christensen (1997) describes sustaining innovation as having
these features:
What all sustaining technologies have in common is that they
improve the performance of established products, along the
dimensions of performance that mainstream customers in
major markets have historically valued.
Here are the critical concepts with sustaining innovation:
• Improve the performance: What does improvement
look like with your current line of products and
services?
• Mainstream customers value: What is it that your
current customers value, and how can you add to that
perceived value?
In his dissertation on the music business, Dean Diehl describes CDs
and digital downloads as sustaining innovations over LPs and
cassettes. On this, Dean writes:
As this study will later demonstrate, the core competitive
dimension in music playback formats was portability with each
successive innovation, from the LP to the CD, improving upon
the portability of music (Albright, 2015). For digital downloads
to have been a disruptive innovation, they would have been
less portable than the CD, the standard playback format at the
time. However, that was not the case as digital downloads were
more portable than any format at the time (Lazrus, 2016).
Disruptive Innovation
Christensen (1997) contrasts sustaining innovation with
disruptive innovation:
Disruptive technologies bring to a market a very different
value proposition than had been available previously.
Generally, disruptive technologies underperform established
products in mainstream markets. But they have other features
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that a few fringe (and generally new) customers value.
Products based on disruptive technologies are typically
cheaper, simpler, smaller, and, frequently, more convenient to
use.
Dean Diehl describes disruptive innovation in this way:
Simply stated, a disruptive innovation is one in which the
innovation’s initial performance is considered to be inferior
to existing options in those attributes most valued by the
mainstream market, called core competitive dimensions, leading
mainstream consumers to dismiss the innovation. A disruptive
innovation, however, survives because it finds a place among
low-end consumers of the existing market or creates a new
market due to its unique business model or its superiority to
existing options in one or more attributes, called secondary
competitive dimensions. Over time, the innovation improves
its performance in the core competitive dimensions while
maintaining its unique advantages until it becomes acceptable
to the mainstream, allowing the innovation to encroach upon
or disrupt existing options thus shifting the competitive
landscape (Christensen, 1997; Schmidt & Druehl, 2008).
Here are the critical concepts of disruptive innovation
• A very different value proposition: Disruptive
innovation changes the value proposition between the
customer and what is provided.
• Disruptive technologies underperform established
products: This is counter-intuitive but an important
distinction with disruptive innovation.
• Until it becomes acceptable to the mainstream:
Disruptive innovation takes time to become
mainstream.
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The Concept of Disruptive Innovation has Evolved
Clay Christensen admits that over the years, the phrase
“disruptive innovation” has been abused and updated. After 20
years (1995 to 2015), Christensen (2015) writes this update.
First, a quick recap of the idea: “Disruption” describes a
process whereby a smaller company with fewer resources is
able to successfully challenge established incumbent
businesses. Specifically, as incumbents focus on improving
their products and services for their most demanding (and
usually most profitable) customers, they exceed the needs of
some segments and ignore the needs of others.
Is Uber’s Innovation Sustaining or Innovation?
In his 2015 HBR article, “What is Disruptive Innovation?”
Christensen suggests that Uber is an example of sustaining
innovation rather than disruptive innovation. He emphasizes that
his theory of disruptive innovation has two characteristics:
• Disruptive innovations originate in low-end or new-
market footholds.
• Disruptive innovations don’t catch on with mainstream
customers until quality catches up to their standards.
(p. 47)
Therefore, Christensen writes:
Uber is clearly transforming the taxi business in the United
States. But is it disrupting the taxi business?
According to the theory, the answer is no. Uber’s financial and
strategic achievements do not qualify the company as
genuinely disruptive—although the company is almost always
described that way. Here are two reasons why the label doesn’t
fit. (p. 47)
Once again, Christensen differentiates sustaining innovation from
disruptive innovation:
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Disruption theory differentiates disruptive innovations from
what are called “sustaining innovations.” The latter make good
products better in the eyes of an incumbent’s existing
customers: the fifth blade in a razor, the clearer TV picture,
better mobile phone reception. (p. 47)
Netflix as an Example of Disruptive Innovation
In contrast to Uber, Christensen highlights Netflix as disruptive
innovation.
Netflix is a good example of disruptive innovation.
Netflix was a disruptive innovation, not simply because it led
to the bankruptcy of Blockbuster, but through the means by
which it disrupted the video rental market. Netflix found a
fringe market that valued its online interface and its
subscription business model. It then innovated its way into the
core of the market through improvement in the core
competitive dimensions of convenience and selection. Most
importantly, it shifted the existing market to a new
subscription-based business model, which the established
market tried, but could not imitate without destroying their
existing value network (Christensen, et al., 2015).
While sustaining innovation and disruptive innovation are central
to theories on innovation. There is also an overlap between
innovation and entrepreneurship.
Innovative Entrepreneurship
While disruptive innovation can come from existing
enterprises, it is more common to see disruptive innovation arise
through the entrepreneurial efforts of new entrants. Yes, there is a
link between innovation and entrepreneurship. A term that can be
used to describe this is “innovative entrepreneurship.”
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The Innovator’s DNA
The discovery skills of innovation can be learned. On this,
Dyer, Gregersen, and Christensen (2009) write in their HBR article,
“The Innovator’s DNA,”
We found that innovative entrepreneurs (who are also CEOs)
spend 50% more time on these discovery activities than do
CEOs with no track record of innovation. Together these skills
make up what we call the innovator’s DNA. And the good
news is, if you’re not born with it, you can cultivate it. (p. 62).
Dyer et al. outline how innovative entrepreneurs have the following
skills in higher amounts than others:
• Associating
• Questioning
• Observing
• Experimenting
• Networking
Let’s look at each of these in more detail.
Associating
First, we have associating. On this topic of associating, Dyer
and his co-authors write:
Associating, or the ability to successfully connect seemingly
unrelated questions, problems, or ideas from different fields, is
central to the innovator’s DNA.
This associating will make more sense after we cover the next
four.
Questioning
Second, we have questioning. Here is what some of the top
thinkers say about questioning. Peter Drucker says, “The important
and difficult job is never to find the right answers, it is to find the
right question.” Ratan Tata of the Tata group says, “question the
unquestionable.” Lastly, Meg Whitman, former CEO of eBay and
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HP, says, “They get a kick out of screwing up the status quo” (Dyer
et al., 20009, para. 14).
When I first moved to Trevecca, one staff person said, “Rick, I
have a nickname for you. Wave-maker. Whenever you are in a
meeting, you like to make waves.” That is probably true. While I try
not to be irritating, I do see the value in asking the hard questions.
Observing
Third is observing. Innovators are constantly watching people
around them. Scott Cook watched his wife struggle with keeping
track of their finances. This led to the development of the innovative
product, Quicken. If you listen to the podcast, How I Built This, you
will hear story after story about how innovators observed what was
going on around them which in turn drove their innovation.
Experimenting
Fourth is experimenting. You don’t have to be Thomas Edison,
Michael Dell, or Steve Jobs to experiment. Over the my years at
Trevecca, the dean of the business school and I have discussed
experimenting with our MBA program. First, we moved from on-
campus to online. Next, we added data analytics, and then our
MicroMBA. When I was asked about doing a MicroMBA, I said, “I
am not sure how it will turn out, but I hope we continue to
experiment with something new each year.” Experimenting is part
of the innovator’s DNA.
Networking
Last, we have networking. Often, the best innovation doesn’t
come from talking to ourselves. Instead, it is as we get out and talk
with others that we can come up with new innovations.
Let’s review these five skills of the innovator’s DNA.
1. Associating
2. Questioning
3. Observing
4. Experimenting
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5. Networking
The biggest problem with Innovation is You
If you want to move your work and organization forward in
innovation, the place to start is with you. Yes, you and I are often
the roadblocks to innovation because of our conventional thinking.
Let’s take a detailed look the HBR article, “The Biggest
Obstacle to Innovation? You.” as to why many of us are limited in
our innovative thinking.
From even before kindergarten, we all were taught to reason in
a way that works fantastically well in a predictable world: you
establish a goal; you construct a number of plans to achieve
that goal; you do tons of research to determine which is the
best one; you gather the necessary resources to attain it; and
you go out and execute on that superior plan.
We think of this as prediction reasoning, a way of thinking
based on the assumption that the future is going to be pretty
much like the past.
But when you are leading innovation, the world is anything but
predictable. You are creating something that has never existed
before and so you simply don’t know how the world is going to
react. By definition, innovation deals with the unknown.
And that’s why you are the biggest problem when it comes to
innovation. If you keep using prediction reasoning in
situations that are simply not predictable, you’re bound to be
disappointed and frustrated.
You need a different way of thinking. (Schlesinger, Kiefer, and
Brown, 2012, para. 4)
Practice, Practice, Practice
One of the things I like most about Dryer’s HBR article on the
Innovator’s DNA is the last section with the heading, practice,
practice, practice. Yes, if you want to be an enterprise leader who
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leads innovation, you will need to practice. Dryer and his co-authors
write, “try spending 15 to 30 minutes each day writing down
questions that challenge the status quo in your company” (para. 30).
You don’t have to be in an enterprise-level c-suite role to put
these innovative practices to use. Each week, see if you can move
one of these five practices forward in your world. Or even better,
half coffee with a co-worker and talk through these ideas.
Look outside
We started this discussion on innovation with an emphasis on
the need to look outside. You can look inside as one way to pursue
innovation but that is often not the best. Kent Bowen, a scientist
who founded CPS, an innovative maker of ceramic composite, is
known for putting this on the wall:
The insights required to solve many of our most challenging
problems come from outside our industry and scientific field.
We must aggressively and proudly incorporate into our work
findings and advances which were not invented here. (Dyer,
Gregersen, and Christensen, 2009, p. 66)
Design Thinking
Another aspect of innovation is design thinking which
continues to grow in presence and popularity. IDEO founder, David
Kelley, defines design thinking as:
Design thinking is a human-centered approach to innovation
that draws from the designer’s toolkit to integrate the needs of
people, the possibilities of technology, and the requirements
for business success. (Turnali, 2015)
Tim Brown (2008) describes design thinkers as having these
attributes:
• Empathy
• Integrative Thinking
• Optimism
• Experimentalism
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• Collaborations
In her 2018 HBR article, “Why Design Thinking Works,”
Jeanne Liedtka writes:
I have seen that another social technology, design thinking, has
the potential to do for innovation exactly what TQM did for
manufacturing: unleash people’s full creative energies, win
their commitment, and radically improve processes. By now
most executives have at least heard about design thinking’s
tools—ethnographic research, an emphasis on reframing
problems and experimentation, the use of diverse teams, and
so on—if not tried them. (para. 2)
For more on design thinking, you may want to read:
• “Design Thinking Comes of Age” (2015, HBR) by Jon
Kolko
• “The Right Way to Lead Design Thinking” (2019,
HBR) by Christian Bason and Robert Austin
• The Design of Business (2009) by Roger Martin
• Change by Design (2019) by Tim Brown
Innovation comes in many different forms and is being
implemented by leaders in many different ways.
Forbes Top 10 Most Innovative CEOs (2019)
As you think about innovation, you can also look to these
leaders who were ranked as the most innovative CEOs by Forbes.
1. Jeff Bezos (Amazon) Tie
2. Elon Musk (Tesla) Tie
3. Mark Zuckerburg (Facebook)
4. Marc Benioff (SalesForce)
5. Reed Hastings (Netflix)
6. Satya Nadella (Microsoft)
7. Shantanu Narayen (Adobe)
8. Tim Cook (Apple)
9. Arne Sorenson (Marriot)
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10. Larry Page and Sergey Brin (Alphabet/Google)
Like all the tools in this book, innovation can be learned. You
can grow in your ability to work and lead more innovatively. Let’s
look at some next steps.
WHAT TO DO NEXT?
The first next step is to take ownership in your world for
innovation. Make it your job, not a job for someone else. “For A.G.
Lafley [Proctor and Gamble CEO], innovation is the central job of
every leader, regardless of the place he or she occupies on the
organizational chart” (Dyer et al., 2009, para. 29).
“For A.G. Lafley [Proctor and Gamble
CEO], innovation is the central job of every
leader, regardless of the place he or she occupies
on the organizational chart.”
Practice, Practice, Practice Today
As we mentioned above, innovation skills can be learned and
developed through practice. Researchers on the topic say that with
practice, these skills can be developed.
“The most important skill to practice is questioning. Asking
“Why” and “Why Not” can help turbocharge the other
discovery skills. Ask questions that both impose and eliminate
constraints; this will help you see a problem or opportunity
from a different angle. Try spending 15 to 30 minutes each day
writing down 10 new questions that challenge the status quo in
your company or industry.
Innovative Entrepreneurship is not a genetic predisposition, it
is an active endeavor. (Dyer, et al., 2009, para. 31)
Take action today and you can build your innovation skills as
outlined in “The Innovator’s DNA.”
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1. Associating
2. Questioning
3. Observing
4. Experimenting
5. Networking (Dyer et al., 2009)
Each month, review these five topics and see if you can move at least
one of them forward. You can also spend time with your team,
helping them to grow in innovation.
