Croslin II: The Real Value Innovation Management Platforms Offer Your Company

Last week we heard from innovation veteran David Croslin and author of Innovate the Future: A Radical New Approach to IT Innovation, about some of his thoughts separating innovation from invention and pitfalls facing organizations when they  institute innovation programs.

One of the items Croslin touched on as we were speaking was the real value behind innovation management platforms - such as Accept Software, BrightIdea, Element8, Imaginatik, Kindling, Qmarkets.net and Spigit. It's a bit different from the party line you hear from these companies. Here's what he had to say:

David Greenfield: We're seeing lots of software that's come out, of late, that helps people collaborate together, helps people innovate together. Where do you see social media and collaboration tools fitting into enhancing innovation?

David Croslin: Well, it's kind of like the water cooler, right? People would stand around the water cooler

David Croslin

and they would discuss ideas, and things like that. In my opinion, most disruptive innovations come from the water cooler. But, unfortunately, nowadays we don't really have water coolers anymore, and people don't really stand around them anymore, and the company processes that are in place (in general) kill off water cooler ideas.

Social media and collaboration tools, things like that, I think are great for entrepreneurs to gather a great deal of information. You were talking earlier about marketing groups, things like that. Being able to tap into potentially millions of people and pose ideas and questions without necessarily revealing your intellectual property that you're trying to determine whether there's a market for, or trying to find a market need-that's really, really fabulous.

At the same time, I think that internal collaboration tools are great. Because we have too many distributed offices now, and you don't stand and look over the cubicle wall much anymore. If you don't have some kind of collaboration tools where people can just brainstorm ideas back and forth, then you've got some serious problems.

But, at the same time, I'm not a big open-innovation fan, at least from the point of view of making money. It has a tendency to push the intellectual property out into the masses, or multiple companies, and one of the things I focus on in the book is the commoditization of your market. If you're basically following an open-innovation model, you're pretty much building an already commoditized product. Because your competitors are equal to you. You don't hit the ground with a truly disruptive innovation. Everybody has it.

Greenfield: What happens when you have innovation management platforms today? Dell's IdeaStorm, for example-I don't know if you're familiar with their platform.

Croslin: Absolutely.

Greenfield: Cisco ran its I-Prize. Starbucks had its own platform. These are forms that allow organizations to pull together the collective understanding of their employees and customers to gather ideas and assess ideas. It's a little more sophisticated than that; they can often gather ideas and then have a second tier of user review or experts assess those ideas. So you start to get this intersection that we've described previously, of the technologists on the one hand and businesspeople on the other hand serving as that second tier, taking ideas from the group, and sorting through them and identifying or amplifying them or changing them to come up with something different or better.

Croslin: Right.

Greenfield: It sounds like, from what you're saying, that's not an approach that you're particularly fond of.

Croslin: Well, it's not that I'm negative on it; it's just a matter of, what is your goal, okay? I've looked at the ones you've described. Dell's IdeaStorm is a tremendous way to gather not only customer complaints, but customer recommendations of incremental enhancements. If you go through it and look at it you'll find that, I think they've got like 140,000 or 150,000 ideas now. Almost all of them have to do with, you know, could you backlight the keys? Could you add a numeric keypad on this particular device? Things like that. Which is all great if all you want to do is continue to sell a commoditized product in a commoditized market. Again, your customer is not going to tell you how to build the iPhone of the notebook market.

Greenfield: But depending on the question and how you pose it, they may be able to tell you, "Gosh, what we would really like to have is our phone consolidated with our media player, you know, and be able to take that anywhere, and make it really easy to use."

Croslin: Yes, I agree. But 99.999% of them will be an incremental invention or innovation of an existing product. If Apple-or let's say Motorola-had started an IdeaStorm equivalent for the cell phone market, would anybody have come up with the iPhone? Or would they have said things like, "If you simplified the menus, that would help," Or, "These buttons are too small for me," that kind of thing?

Greenfield: Right.

Croslin: It takes someone then reviewing all those thousands of things to-I don't want to say, "have that light bulb epiphany"-but be able to say, "Wait a minute. I could combine all these things and create a disruption."

So, yes, you could do that. Now from the point of view of Cisco's I-Prize, I think that, in that case, one of Cisco's major initiatives over the last two years has been their telepresence space. They're really, really pushing it. Now, I worked at MCI and Verizon, and we used to do videoconferencing before anybody knew what videoconferencing was. And then it died off. It was really because travel costs went down.

And now telepresence is coming back, but it's a totally different model of how you communicate with your teams. I think it's very valuable. But it's a hard sell because it's fairly expensive and the existing executive teams in a lot of companies don't really understand how to function that way. So I think Cisco, in their approach to gathering innovative ideas, they're very focused. They didn't just say, "Tell us about anything that you've got out there, and then pick a category that it might apply to." They said, "We want to know about telepresence. Help us understand-basically, how to sell this."

So they've got a cool idea, and they're trying to get their potential market to tell them how to layer on something, like Google did, in order to create an aggressive, growing market.

Greenfield: So if you're going to use an innovation management platform in your organization, or you're evaluating an innovation management platform, it sounds like you should 1) set your expectations right. You might get incremental innovation, but you probably won't get the sort of breakthrough innovations that we've been talking about here, that you're talking about in your book. And 2) even in the context of incremental innovation, you've gotta frame your questions in the right way. Otherwise, you're just going to get lots of different ideas that aren't going to address your core problem.

Croslin: Exactly. You know, I'm really big on pointing my finger at the executive team, saying that they cop out all the time. Having a business initiative of "We need to be more innovative" is a total copout, okay? If you're not defining to your employees where they should be innovative, what market they're after, what problems they're trying to solve, things like that, then you are just abusing that resource. And you're gonna blame them for failing. That's because, like I said earlier, the linkage between marketing and technology is at the executive team. It's almost never at the bottom.

And yet, the executive teams assume that the technology teams have that linkage. And without it, they cannot find a disruptive innovation. They need direction. Otherwise, if they do come up with a disruptive innovation-I talked to a company a couple of days ago, and one of the executives there was very frustrated because they had come up with some truly disruptive innovations, and yet, when they took it to the executive team, [the executive team] said, "We're not in that market," or "We don't do that kind of thing. We do this-that's close, but that's not ours."

It's because there was no market information that could be used to drive it into the executive team. So I think executive teams have got to be far more literal or definitive about what the corporate goals are. If you're tired of not making a lot of money off of cell phones, and you want to make money somewhere else, define where that "somewhere else" is, and let your marketing analysis team do that definition. Then take that to the technology group and build a cool idea, and then attack and disrupt the market. Not the other way around.

Greenfield: Right. It sounds like, whatever tools you're going to be using to implement, it has to begin with the process that you're laying out here. It has to begin with the process of the marketing or the executive team defining the objective, and then turning loose the technical team on how to address or solve that objective.

Croslin: Exactly.  So I think any kind of management tool that collects ideas, correlates them by topic, things like that, is a great tool. Because all these little ideas and stuff-the 150,000 that Dell has collected-those are all valuable, don't get me wrong. If a lot of consumers are saying, "You know, I really wish that the keyboard was backlit so that, when I'm in a dark situation, I can see my keyboard," then maybe you ought to consider doing that-and it affects your battery life, and things like that. But is that gonna be truly a disruptive innovation? No, probably not. People aren't gonna pay $100 more for a backlit keyboard. But if you do come up with a disruptive innovation, then maybe that disruptive innovation is a combination of 10 of these things.

Greenfield: And your ability to extract the principle from the idea, it sounds like, is incredibly important. It may be that what they're really saying to you is, "I can't see my keys. I can't see the input device." So maybe that means you do away with the input device and you go to a voice-controlled interface.

Croslin: Absolutely perfect example. Yes, you are right on target. Because what you just did is, you took where a customer said, "Yeah, why don't you do this?" and you boiled it down to the true customer need, right? That's why I said earlier, don't ask the customer how to improve your product. Figure out what the customer's needs or wants are, and address those. And you just did that with the backlit keyboard: "I can't use the device in certain situations."

So then the question becomes, how often do those situations arise? How big is the market for the people who have those situations? Right? Can I justify $100-in fact, I saw one on backlit keyboards on Dell's site where the guy actually said, "I would be willing to pay a premium price for a backlit keyboard." Right? So it doesn't necessarily mean, like you said, that the backlit keyboard is the solution to the problem-or the need. But the need exists. That's where you find disruption.

Greenfield: Unfortunately, it seems that people think in terms of incremental innovation. So if you are going to think about, you know, the Next Big Thing, and you're going to ask customers about what you should do, it sounds like you can do that, and it sounds like that actually could be an approach, but just that the way you interpret the data has to be done differently. And the example that we're giving here, you know, asking about what we should do, means that you not necessarily should create a new backlit keyboard, but we need you to come up with, perhaps, a new kind of interface. That would extend through all the other innovations that you might get in your community as well.

Croslin: Exactly. If I had 150,000 replies from Dell's customers, I would take every one of those replies and say, "What is the pain point-like we talked about earlier-that each one of these replies is talking about?" And can I boil all those pain points down into 10 different pain points? If you look at the Apple iPhone-and I don't know what the pain points are, but they're basically simplification of menus, touchscreen (so that the buttons can be any size you want), larger view-screen-those 10 pain points will define your disruption. Apple didn't create, you know, an interplanetary war weapon to save the planet. What they did was, they solved the pain points that cell phones weren't solving. Lo and behold, overnight they destroyed the traditional cell phone market and created a completely disruptive technology. And a lot of people will tell you, "All they did was combine things!" Yeah-what's your point? They solved pain points by combining existing technologies. That's what people need to do.