What does your innovation strategy look like? While you probably don’t have $100 million to throw at R&D, Michael Raynor, the author of the book, The Innovator’s Manifesto, thinks even small improvements can set you down path to disrupting entire markets.
Speaking from Mississauga, Raynor’s book was just launched and he’s preparing for the upcoming media spotlight. Right after we spoke he was heading down to CBC News Network to appear on the Lang and O’Leary Exchange and is preparing for a TEDx talk in San Francisco next week.
We spoke to Raynor in conjunction with our review of Innovator’s Manifesto.
PA - Why did this book need to be written? MR - There’s not only the Innovator’s Dilemma and the Innovator’s Solution but there is also the Innovator’s Prescription, Disrupting Class – The Innovator’s University, The Innovator’s DNA, The Silver Lining, The Innovator’s Handbook and these are all books that have been written explicitly about disruption. There is no shortage of people who have taken a kick at the can, but here’s what I think is different. The Innovator’s Manifesto does something, that as far as I know, no one has done before: it has subjected a theory of innovation to a predictive test.
The way business books tend to work is they cherry-pick the examples that support your theory and then say “Look how great my theory is.” How are you supposed to know you can use this theory going forward? That’s the part that has been missing. We needed data we really didn’t have; we needed business plans with honest to goodness survival data that we could test.
PA - With innovation being such a gamble why should companies invest in innovation-driven growth at all? MR – Productivity-driven growth, that is productivity where you do better at all of the things you’re doing now, is a perfectly legitimate, honorable, credible way to improve the performance of your business. However, nothing lives forever and the key to continued prosperity is a function of breaking fundamental tradeoffs and that’s why I believe innovation is important.
The fact is innovation has always been a significant gamble and that’s why we tend to manage innovation the way we do. Try lots of stuff, see what works as inexpensively as possible, fail fast and move on to the next. My claim is that if you use disruption theory you can have a significantly greater accuracy rate when it comes to developing and shaping ideas. As a consequence, it’s possible to start breaking that tradeoff between the benefits of innovation and the uncertainty that comes with it.
PA - Given the recent economic news how important are these ideas? MR - I suppose it would be rhetorically convenient to say “more important than ever” but I don’t know if it’s more important as ever, I think it’s just as important as ever. I’ve always felt that innovation needs to be at the top of the list. People have shied away from innovation and understandably so because it has been such a trip to the roulette wheel. There has been this very painful tradeoff and to the extent that we can mitigate that tradeoff and maybe even break it, then I think all of a sudden that if you can get the benefits of a truly disruptive innovation? Then that’s having your cake and eating it too.
PA – What can this book offer to small- and medium-sized enterprises? MR - I don’t want to sound trite about it but I think there’s something to be said about being willing to think big, and what disruption theory offers is a much clearer line of sight from wherever you happen to be to a much more significant and much larger and more successful scale. Every company I talk about in the book was a startup, a small enterprise, at one point.
What sort of innovations, what sort of productivity improvements, writ large, allow you to move along to disrupting incumbent markets? Those are the strategic choices that make the most sense rather than following the crowd and making sure you’re keeping up with best practices.
PA - What’s the tradeoff between incremental improvements and investing in innovation? MR - It’s honest work, those kinds of improvements. I’m not just trying to be polite when I say that, it absolutely is. Incremental improvements, small steps if you will, can have a much greater significance depending on which direction they take you. Small steps in the right direction, that’s where you need to go. Maybe the most important message is that there is nothing wrong with taking short steps and recognizing the fact that as a smaller company you don’t have $100 million to throw at R&D. However, whatever improvements you do choose to make, you can choose to pursue the kind that lead you towards eventually disrupting entire markets. It doesn’t have to be the stroke of the bat in the bottom of the ninth with the bases loaded that takes you to glory. It really can be an “inside baseball” kind of proposition — so long as you know what you’re doing.