How companies can innovate at scale
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One common characteristics of the most valuable internet companies in the world is their ability to scale. The adoption of data, wireless networks, social, mobile, and video technologies is driving the need for designing innovation that can scale at unprecedented rates.
The brilliant 2018 Internet Trends presentation from KPCB highlights the importance of innovation at scale across multiple sectors, products, and services.
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The innovation requirements today means that every company is a technology company. Every company is also a data company that must operate like a software company -- agile, adaptive, experimental, and design focused.
So, how can companies design platforms that can scale at this incredible rates?
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Given the changing expectations of the connected customer, companies that fail to innovate with security, reliability, and scale will not be able to compete in a hyper-connected, knowledge sharing economy.
To better understand innovation at scale principles, I connected with two innovation experts that have worked as both practitioners and trusted advisers as it relates to defining and developing both business strategy and innovation at scale:
- Henry King, an innovation and transformation leader at Salesforce. King is a former CIO with 30 years consulting and executive experience, both in the US and internationally, with expertise in innovation and information technology. He is also a faculty member at School of the Art Institute of Chicago, where he teaches architecture and design objects.
- Cathy Kading, the vice president of strategy and PMO at Cheetah Digital. Kading collaborates with customers to develop and demonstrate inventive tools, forward-thinking strategies, and innovative capabilities that can fuel their journeys beyond competitive advantage to new levels of value and sustainable growth.
"We need innovation that scales."
Anyone in the innovation space has heard this leadership edict and, initially at least, it feels like a common sense request. After all, what's the point of innovation that doesn't scale? Unfortunately, it often inhibits the very innovation it tries to foster, because it conflates two quite distinct business disciplines. Innovation and scale attract quite different types of people, require different approaches and toolsets, and represent different phases in the lifecycle of a product, process or even a company.
Innovation typically creates new or original "things" including: Products, services, experiences, business models, processes, and/or other aspects of an organization's operations. Innovation output is often described as a prototype, the first of a kind, and should demonstrate initial demand.
Scaleis about reproduction and growth. It creates more of existing "things" as accurately and flawlessly as possible. Scale outputs are copies, or the nth of their kind. The focus of scaling is performance improvement and cost reduction, to cross the customer chasm and attract mainstream demand.
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Accordingly, leadership calls for scale from innovation are often misplaced, mistimed or misinterpreted. They are heard as requests for "'billion dollar ideas" and often dampen, rather than stimulate, creativity. They tend to mismatch mindsets, skills and activities, and they may, paradoxically, lead to initiatives becoming too risk-averse and discarding promising ideas too early.
Fortunately, there are ways for leaders to create the right set of expectations and conditions and encourage an innovation team's ambition, while not undermining their confidence or capabilities. They should, for example, allow teams the time to solve the hardest parts of their problems, and not only seek quick wins and "low hanging fruit." They can also make valuable contributions to the future scalability of innovative concepts:
- Focusing on balanced breakthroughs: Direct teams to focus on creating innovations that meet user needs (Desirable), make business sense (Viable), and are achievable, given the tools and skills that currently exist in the organization, or that are accessible in the market (Feasible). Guide teams to demonstrate concepts and prototypes meeting all three criteria, and only invest additional time, money, and resources when those criteria are met.
- Tackling new problems with new mindsets: Challenge teams to identify, understand, and follow emerging paradigms rather than dominant, traditional ones. For instance, people are more connected than ever before; objects and devices are increasingly connected as the Internet of Things evolves, and businesses need to follow suit and connect more closely with partners, employees, and customers. Therefore all innovation initiatives should include connectedness as one of their core principles, or be clear about why not.
There are also ways for teams to imbue innovation with scaling potential, as early as ideation and concept development. It's not their job to implement systems, policies, procedures, standards, etc., that enable innovations to scale, but they can incorporate scaling principles to improve their chances of success. Three scaling principles include:
- Discovering pain points and solving for unmet needs: Entrepreneurs and innovators alike, are bedeviled by the "wouldn't it be cool if..." problem. Ninety percent of them fail, largely because users don't share their enthusiasm. Design thinking practices and methods like re-framing and user research, models like Balanced Breakthroughs and Clayton Christensen's Jobs to be Done, as well as iterative prototyping and experimentation, are helpful to ensure innovation efforts are driven by user needs and not internal brainstorms.
- Seeing and designing for the bigger picture (Fit): When designing a new concept, teams should consider what else might be necessary for that concept to fit most effectively into the user's life, including infrastructure, ancillary capabilities, connectivity and compatibility, and initial content. Most Apple iPod stories focus on the device itself, but other parts of the innovation actually drove it to scale: iTunes, released in January 2001, almost a year before the player, ensured people could enjoy their CD investments in new ways. The iTunes Store launched in April 2003, opening up an entire music universe. Six months later, iTunes for Windows launched, extending the reach of the iPod-iTunes system to the "other" 90 percent of personal computing users and putting Apple firmly on the road to its current success.
- Investigating platform potential: Platforms are complex, sophisticated toolsets and infrastructures that enable people to do work and build their own solutions, businesses and careers upon them. Platforms are common in industries as diverse as automotive manufacturing and oil drilling, and are increasingly recognized as one of the most scalable types of digital innovations and business models. Scale for these digital platforms comes not just from growing the number of people using them but from growing the number and types of connections between people that the platform enables, otherwise known as the size of its ecosystem. The success of social platforms like YouTube and Instagram, and of business platforms like Amazon and Salesforce, are prime examples of this scaling effect.
In most cases, the requirements and nature of innovation and scale are quite different to one another and should be managed distinctly. However, leaders and teams can actively leverage scaling principles during innovation, and vice-versa. The trick is knowing how to make a prototype, how to make a copy, and knowing how to bridge the gap between the two.
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This article was co-authored by Henry King, an innovation and transformation leader at Salesforce, and Cathy Kading, VP Strategic Services and PMO, Americas at Cheetah Digital.