425 words.

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How the Best Companies Create

Sustained and Relentless Innovation.

by Dov Gordon

Bite-Size:  It is a well-known innovation paradox: Successful innovation requires a deep understanding of your market.  Conversely, your market often can’t begin to dream up some of the most successful innovations.  As Henry Ford said: “If I had asked people what they wanted, they would have asked for a better horse.”

In today’s newsletter we take a bird’s-eye view of the three ingredients required to create sustained innovation.

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Today’s brief article comes from a comment I left on the blog of my friend Pat Gray.  Pat is the author of Breakthrough IT: Supercharging Organizational Value Through Technology (Wiley). This book and his work are all about turning IT from a support function to one that contributes strategic value.

In a recent blog post, Pat discussed the extreme emphasis many companies place on surveys and other backwards-looking market research tools even though, as Henry Ford said, “If I had asked people what they wanted, they would have asked for a better horse.”

My reply:

Hi Pat,

I would argue that consistent innovation - innovation that is valued by customer - lies at the intersection of three disciplines:

(1) Strong and effective operations.

(2) A passion for excellence in the company’s areas of expertise (technical, design, scientific, etc.) and

(3) A deep interest in and understanding of the target markets.

Companies that overemphasize on any one of these areas to the neglect of the others generally produce the one-hit-wonders or none at all.

- A company may have strong operations, but lack a clearly defined direction. So they are good at what they do today, but the momentum will soon subside.

- A company may be passionate about their technical expertise, but lack a real interest in and understanding of the market.  This spawns the endless stream of “technologies in search of a market.”

- A company that emphasizes a deep understanding of the market will allow the market to define its innovative efforts - but miss out on the automobile because the market asked for a better horse.

It’s about balance. I usually plot these in a Venn diagram, called The Innovation Zone with the Venn sitting on a foundation of “effective management” – the discipline that ensures all other disciplines and effective strategy.

As you probably know, Henry Ford was in fact a terrible manager. His initial success was driven by his technical expertise and passion for what he was doing. However with time, this momentum could no longer carry him and, lacking a balance between these three areas he nearly drove Ford into the ground. (“They can have it in any color they want, as long as it is black.” - Henry Ford, paraphrased) It was his grandson who took over and saved the company… for a while.

It sounds like Nike, described in your post “The Genius of Dumb Devices” is doing a good, balanced job.

Best regards,
Dov Gordon
 

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DOV GORDON helps companies transcend the challenges, and leverage the opportunities caused by growth and success. He is sought after for his perspective and advice on formulating and implementing strategy, developing strong management at all levels and cultivating innovation. Dov can be reached via his websites www.GordonGroupEC.com and www.Israeli-CEO.com, via email at dovgordon@gmail.com or phone: +972-2-992-0396.

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Archives of The CEO Thought-Provoker™ are here:  http://www.gordongroupec.com/articles.html

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Dov Gordon helps senior executives at small and mid-sized companies around the world to earn the respect and admiration of their marketplace.  Clients benefit from clarifying their strategies, sharpening their focus, better decision making, improved teamwork and growing into great leaders.

Management and Strategy Consulting.

Executive Coaching.

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