- [Announcer] 1945 Percy Spencer,
a self-taught radar engineer at Raytheon
loved to spend his lunches outside
sharing his usual peanut cluster bar
with the local chipmunks and squirrels.
On this day, when he reached into his pocket
to pull out his usual lunchtime indulgence
the candy bar was a melted, gooey, sticky mess.
Baffled at first, Percy soon formulated a possible cause.
You see, all morning he had been working
on some improvements to a magnetron,
this is like a loudspeaker for radar waves.
Could this have caused his candy bar to melt?
He rushed back into the lab
and placed some popcorn kernels under the magnetron
and so was born the world's first microwave popcorn.
The next day, Percy brought an egg from home
and stuck it under the magnetron.
It exploded leaving one of Percy's skeptical colleagues
with literal egg on his face.
It wasn't long before Raytheon patented Percy's discovery
and introduced the first commercial microwave
weighing in at 750 pounds for a mere $3,000.
Over the years, the size and cost have gone down
and these little boxes have become commonplace
in kitchens and break rooms most everywhere.
So the next time you heat up that cold slice of pizza
give a little love to old Percy Spencer.
If not for that chance encounter between peanut cluster bar
and microwaves our world might be a very different place.
Is this just how innovation happens by chance,
like winning the lottery?
Should we spend lots of money buying more and more lottery
tickets or maybe just decide our chances are too slim
and just do nothing?
Well, the good news is that innovation
doesn't have to work that way.
In most cases, truly innovative companies use process,
tools and mindset to innovate on purpose
- I'm Scott Pletcher and welcome to That's Innovation.
In this series, we're gonna look deeper into innovation
specifically how we can innovate on purpose
in a repeatable manner.
We'll cover some innovation management theory
and we're gonna help you put that theory into practice
with some ideas and tools that you can use
in your very own organization.
If you wanna get started with an innovation program
or maybe you've tried some things in the past
but nothing's quite caught on this series is for you,
plus because cloud is right here in our name,
we'll call out where the cloud might help you out
on your innovation journey.
Okay, without further ado let's get started.
Where do we start?
How about what is innovation?
Roll that lovely training video.
(upbeat music)
- Oh, hey, I didn't see you there.
I'm Marty McMasterson,
you might know me from such corporate training videos
as "Stealing From the Supply Closet is Still Theft",
and "We All Win With Personal Hygiene".
Today I'll be talking about innovation.
What is it,
and I'll share some different types of innovation.
When contemplating an innovation program it's important
all employees have a common understanding.
Innovation can mean many things
and we want to all be pulling in the same direction.
According to the international standards organization
document series 56,000 on innovation management
innovation is, new or changed entities that realizes
or redistributes value.
The novelty of value of an innovation is relative
to the organization and interested parties
and innovation should be thought of as an outcome.
Innovation activities are the process
that lead to innovation.
Well, that's a pretty broad definition
and intentionally so. This ISO standard
is designed to fit many different scenarios and industries
you'll need a more specific definition for your company.
To help out,
let's look at some different types of innovation.
Do we want to innovate within our existing market
or create entirely new markets?
Will we be using our existing business model
or create new business models?
Will we be using existing technology and capabilities
or will we be creating entirely
new technologies and capabilities?
Let's put these choices on a matrix.
If we are using existing capabilities and technology
that's familiar to us in our existing markets
this is called routine innovation.
It is sometimes called sustaining or incremental innovation
and builds upon what we've already done in the past.
Examples of this are an automotive manufacturer
creating the next model year of an existing car.
Maybe we make use of existing capabilities
and technology with a brand new business model,
this is called disruptive innovation.
Disruptive innovation usually aims
to undercut an incumbent competitor
with a simpler offering or lower price option.
In the 1970s, Xerox was well known for copy machines
but those machines were large
and too expensive for small organizations
new personal copier manufacturers entered the market
with smaller, cheaper options.
Once those entrants gained a foothold,
they steadily moved up market
until they were directly competing against Xerox.
If we want to design completely new business models
using never before seen technology
this would be called architectural innovation.
We'd be creating things from scratch
and maybe leveraging partnerships to drive new markets.
An example of architectural innovation
are the brand new Motorola DynaTac cellular mobile phones.
This small handheld unit contains new technology
and also represents a new subscription business model
for the cellular telephone service operators
as cellular service areas expand
demand for cellular telephones will expand and vice versa.
If we want to adjust focus
on creating brand new technology and capabilities
but apply them to our existing business models and markets
this is called radical innovation.
(upbeat music)
Today pharmaceutical companies are creating brand new drugs
using molecular biology, a technology that is new
but those drug companies are leveraging their existing paths
to market and targeting their existing customers
and that is totally radical.
- Okay, so we've been able to classify
some types of innovation
so we can just get busy innovating, right?
Not exactly, that's just kinda like buying
more lotto tickets and hoping we get lucky.
What we need is to draw some bounds
around our innovation efforts.
Things like a strategy and objectives
will help us focus our resources,
a process and a way to measure that process
can help us accomplish our objectives and improve.
Collectively, these things form
our innovation management system.
Now you don't need massive bureaucracy, dozens of people
and a pile of money for an innovation management system.
In fact, I recommend that you start small
as small as you possibly can,
maybe just in your own department.
The things that you learn while small
will be really helpful
when you try to scale to a larger program.
Plus having a well thought out plan in hand is very useful
when trying to expand your innovation efforts
and seeking executive support.
To get started on our innovation management system
I like to start with designing a process.
I know what you're saying, wait a second, wait a second
what about the mission statement and the vision,
and the strategy
and all those other project sounding things?
Well, we'll get to those things just stick with me.
Here's an example of an innovation process
lets starts with an idea intake,
then we sort and select and prioritize those ideas.
The ideas evolve into a concept
which becomes a working prototype
and then maybe progresses to a pilot.
The ability to iterate is important
so items can fall back to a prior stage
or maybe they're shelved altogether.
If things are looking good
that innovation might be on its way into full production.
However, scaling something into full production
is usually pretty involved
and maybe beyond our direct control.
Rather the end state of this process
might be to have the prototype
serve as a tangible way to communicate requirements
for a handoff to some other team.
Maybe the customer feedback collected in the pilot phase
can help us build a strong business case
and secure additional budget and resources
through building our process
we'll get an idea of our degrees of freedom
what's within our control and what's outside of our control
and that's why I like to start with a process.
Now that we have a workable process
and we know where our boundaries lie
We can spend some time on our strategy.
Of all the possible paths that we can take with innovation
a good strategy we'll focus our energy
to a very specific area.
If you recall the types of innovation from earlier
we're probably not gonna focus too much on disruptive
or architectural innovation.
Those usually involve new markets and new business models
which are most likely out of our fear of control
now, routine and radical innovation,
that's a different story
and we have a secret weapon the cloud.
The cloud provides us with a wealth
of new technical capabilities
which are very accessible and really cheap.
Since the barrier to entry for cloud services
is usually just an internet connection and a credit card
that should be well within our sphere of control.
Our innovation strategy might read something like
search for radical innovations
that will simplify the customer experience.
This tells us that we're gonna explore a new technology
that can improve how our current customer base
interacts with us.
Now, if through our process design, we realize that
we don't have any direct access to customers
that wouldn't be a great strategy.
Rather, I might adjust it to say search
for radical innovation in the customer experience
which our go to market team contests with customers.
That's how the process first step
can help strategy definition.
We wanna be mindful of existing organizational
roles and responsibilities.
You don't want your early innovation efforts
to be perceived as covert activities,
trying to undercut exists roles
as that's a quick way to get shut down.
Rather in this case our strategy
is to bring innovative ideas
to another part of the organization
that's probably really hungry for those types of things.
As for objectives
let's keep it simple for our first iteration.
At this point, we're just working through our process
and getting everyone comfortable with it.
So I'd probably have an objective
like take four ideas
through the innovation process this quarter
and avoid something like
create four successful innovations this quarter
as much as we'd like all of our ideas
to be resounding game changers
that's just not going to be case.
Even if an idea is shelved or canceled
you can still learn a ton.
Plus you wanna remain impartial as to the fate of each idea.
History is rife with innovations
that were pushed through despite warning signs
in earlier phases.
If you're playing along at home, here's your assignment.
Come up with a version one dot O innovation process.
It should have an entry point, exit points
and accommodate some form of iteration.
I'd also recommend low barriers to entry
and avoid the urge to stage gate everything
especially in the early phases.
Next, come up with a strategy that describes
how you wanna focus your innovation laser beam.
You wanna have these two things in hand
as we go into the next episode idea of management
how we collect them, how we manage them, how we decide
which will progress our strategy.
Let us know down in the comments below
how you're coming along on your homework
and feel free to ask any questions.
Plus if there's a specific innovation topic
you'd like covered in an upcoming episode,
let us know that too,
I'm Scott Pletcher.
- And that's innovation.