The Art & Science of Innovation?

There are many dimensions to developing innovative products and services. All may not have an equal bearing. So much will depend on the way an organization has grown, how the leadership team sets standards, the environment and so on.
One of the relevant factors is the need to learn anew. This could be interpreted to mean learning new things or learning new ways of doing the old. Process innovation is as important as product innovation. It is easier to learn new things than learning new ways of doing the old. Perhaps, subconsciously there is resistance which arises from inherited ways of doing. Often, you have to make an effort to forget to do something new. Xbox 360 is cited as a good example of the need to forget to build something new, especially when there has been an enormous success.
When Microsoft developed its new console Xbox 360, it chose to develop it in a location physically removed from where Windows was being run. Peter Moore, the VP in charge of marketing the new Xbox, says in a story in Time (May 23, 2005), “They (Microsoft) allowed us to set up a separate division almost, that is physically, geographically, psychologically and spiritually different from what Bill himself calls the Borg”. Since the old console was seen as a clunky piece, it hired a sculptor to design the new one. And launched the 360 through MTV’s music network rather than through the traditional tech shows. The Xbox was not just a new product. For Microsoft, it was a new path. Ricardo Semler of Semco once observed that it is the ability of companies to change paths rather than size that helps them grow.
This is a critical observation but must be treated with caution. Rajiv Bajaj might not agree with this observation since he has chosen to stay with the ‘same product’ never feeling the need to explore anything new, because there is so much more to explore in his current business. Let us just say that for those that have reached the limit in their current business, changing the path may become the only way to grow. However, such a move is also the first step to becoming a conglomerate, which is a completely different animal altogether and demands a completely different ways of thinking and managing. I remember this piercing observation from one of the South Korean giants in the 1990s when it said that their core competence was to manage diversity (understood in the business sense and not the way it is understood now).
Forgetting by itself will not open up new paths; it will only ensure that you are free of cobwebs. The additional step is to accept that you have to learn anew. And that often is a daunting task enhanced by the fear of the unknown, from the world of certainty to probability. It calls for a new way of thinking. Years ago, when I joined French classes, I struggled a lot because I was thinking in English and translating into French, from a language where I was fairly advanced into a language I was just beginning to learn. It was a disaster. My teacher at the Alliance Francaise kept reminding of me of the mistake I was making. I was conscious of it but failed to overcome. Certain kinds of knowledges are actually quite useless. My point in this personal digression is to emphasise how monumentally difficult learning anew can be.
One enabling aspect is the attitude of being open to new things. That helps because the relearning or learning anew will be needed in more areas than one. While it is unlikely that an entire organization is a learning organization, some individuals within it will certainly be. They are your best bet for a fresh start. To repeat what I have said in Part 1, when we describe a company as innovative, we are actually saying two things: one, that individuals within the company create something new and second, that the organization lets them do so. It is this combination that produces innovation. Everything else is a device. If the device has limitations, innovators think of how to create a better device.
Once you are open to learning anew, you might consider analogical thinking which is a great skill and one that is vital in a complex world where making sense involves many dimensions. In the mid-1990s, commercial banks in India looked to airlines to better segment their customers. Bankers realized that airlines had (then) the clearest understanding of different kinds of customers and the appropriate level of service – Economy, Business and First Class (there was no premium economy then). Banks were not sure about what services their customers were willing to pay. And were losing customers because many did not want all the services but since they came together as a bundle, it became an ‘either or’ situation. Clearly, a better segmentation also meant better pricing.
Even luxury brands learnt from others. For years, a principle such as ‘value for money’ was foreign to the luxury business. But they forgot evolution. Barring some rare examples, even luxury customers began to ask what they were getting in return for what they were paying. Not to mention the fact that competition too was growing. Just check on the debate over creating new entry price points for first time customers in luxury. This would have been unthinkable some years earlier. A millionaire was defined as one who didn’t ask the price of a yacht!