Innovation Pipeline

Labor and capital have long been seen as the soul of any economy. But times change. Today’s preferred equation includes three elements: growth, prosperity and quality of life. All three are tightly knit into industries and companies that harness innovation.

That’s partly why innovation is the business-world buzzword for the early part of the 21st century. It’s considered the fuel that can power emerging economies to leap ahead and deliver new products and services to a dynamic global marketplace.

But the practice of innovation far from a tightly orchestrated discipline. Curtis Carlson, president and CEO of SRI International, puts it bluntly in his tough-love critique of tech companies, warning that most are simply not doing a good job of innovation.

Say what? How can it be that most companies have failed at innovation, especially when nearly every Fortune 500 company has innovation cemented into its mission statement?

“Innovation is about creating and delivering new customer value to the marketplace,” said Carlson, coauthor of The Five Disciplines for Creating What Customers Want, at a recent conference on emerging technology. He should know. SRI International is well known for its innovations, including work on the computer mouse, HDTV and robotic surgery. And over the past 20 years Carlson has spent many of his working hours examining and advising executives on innovation best practices.

In his new book Carlson outlines five planks that are fundamental to innovation: customer and market need; the value-creation process; an innovation champion; innovation teams; and organizational alignment.

Business would do well to listen. If they don’t innovate, most die, falling victim to competitors that have innovated and kept up with the so-called exponential economy.

But Carlson’s words are also a reminder of the hazards facing companies just starting out. Only 30 percent to 50 percent of them will be around after four years, according to the Small Business Administration. Why? A main reason cited by companies that fail is that they become risk mitigators, not risk takers.

Among Carlson’s five points, perhaps the most fundamental is that value creation is a process. It’s at least part of the answer to the four main questions that need to be addressed in any innovative process, questions surrounding needs, approach, benefits and costs, and competition.

At the top of the list for young startups is determining the value proposition. It’s typically derived from the description of the problem that the innovator’s concept addresses. It includes the distinguishing features of the innovator’s approach and it helps guide product development.

There’s a mythic aura surrounding innovation, something akin to Ponce De Leon’s search for the fountain of youth. Carlson’s systematic approach helps demystify and improve the process of innovation. It’s high time someone described innovation and established the steps and practices to make it a staple of every company’s future. –Lee Bruno