Recently I’ve been able to talk to Jane Stevenson and Bilal Kaafarani about their new book Breaking Away. It’s a fantastic book about how great leaders create innovation, and it’s filled with tips on how your business can be more innovative without breaking the bank. What follows are some questions that can help your business be more innovative and learn from all the research Jane and Bilaal did for this book.

Phil: Let’s start by defining innovation. What is it – and why do so many get it wrong?
Jane & Bilal: Innovation is a term that is often used, but seldom understood. That’s because the word has a mystical quality that infers something new or magical, but isn’t clearly defined. Often when people talk about innovation they are each referring to different things and don’t even realize it. Thus the confusion. Since everyone talks about innovation and agrees it is needed, wouldn’t it be powerful if we all used a common definition and could actually communicate about it with mutual understanding?
In the research for “Breaking Away”, we met initially with 50 top executives, asking each to define innovation, before we came to our first duplicate definition on the 51st interview. That was proof to us that having a common language around innovation was clearly needed. In looking at innovation down through the ages, we found that there were three common ingredients to almost any innovation. These three form a litmus test that defines innovation as something that is 1) unique, 2) of value, and 3) worthy of exchange. We’ve found widespread acceptance for this definition. What do you and your readers think?
Phil: You reference 4 levels of innovation (transformational, marketplace, category and operational). Which one can help a small business grow the most? The fastest?
Jane & Bilal: Of the four types of innovation, Category innovation can help a small business grow the fastest, and probably the most dramatically (within a reasonable time frame). The reason for this is that Category innovations create whole new sectors with major upside and new markets to serve. They are often breakthrough in nature, and yet are proven enough to realistically provide growth within a couple year time frame.
Transformational innovation, potentially provides the biggest upside, but often takes well over a decade to achieve social adoption. This makes it so risky and long term in orientation that it can kick in after a small company’s window of business opportunity may already have closed.
Marketplace is another situation altogether. With Marketplace Innovation, the opportunity is quick to deliver to market, but it is typically highly competitive, and less sustainable. This is because it is based on new features and benefits rather than whole new categories or markets to develop.
Operational will help a small company operate cheaper, faster or better, but it is unlikely to generate significant new revenue. The opposite of Category innovation, Operational innovation generally benefits the bottom line more than the top line.
Phil: Your book says that “What if?” has been at the center of innovation for centuries. Please explain this.
Jane & Bilal: The question “What if?” is the curiosity factor that ultimately generates innovation. What if, is the precursor to discovery, and discovery is the precursor to innovation. If it is a science based company, the discovery process begins by saying “What if this were possible?” or “What if we tried X, would Y then be possible?”. If it is a financial services company, a telecommunications company or an IT company the question might be, “What if people could deposit funds using their mobile phone?” Or “what if we could send funds to a relative by phone?” The “What if?” factor is essential to generating the discovery phase of innovation.
Phil: Quoting Breaking Away: “Customer feedback is an important component for innovation.” If this is true, why do so many companies (Apple as an example) either not ask for this feedback or outright ignore the feedback from their customers?
Jane & Bilal: Customer feedback is important for innovation because it can serve as a guide to future discovery and opportunity development. People often don’t utilize customer feedback because they are a solution looking for a problem. If they have to find a problem that fits their solution, then they are already locked in to a particular conversation that may or may not intersect with customers.
You mention Apple as an example. Many of Apple’s biggest innovations have been things that customers would not have directly asked for, because they didn’t know the offering was even a possibility. This should not for a minute suggest that Apple is not getting feedback from its customers. They have studied their customers so well, that they understand from customer feedback, what they would want, if they knew it was possible. The best companies are those that study their customers so closely and cleverly that they understand desires even before the customer knows him or herself.
Phil: Another important concept in your book is the idea of trade-offs and how it relates to risk. Please briefly explain this idea.
Jane & Bilal: Risk is an essential part of innovation. Bilal always says that “risk is innovation’s middle name”. The question is, how much risk is there and how much upside is the trade-off for that risk? If the upside is significant, than you can afford to take more risk. By contrast, if the upside is minimal, then the risk should be contained also.
Phil: Is innovation more important in a down economy or an up economy, and why?
Jane & Bilal: The answer is both. In a down economy, innovation is important to help restart the engine of growth. In an up economy, innovation is an imperative to keeping the economy strong.
Phil: What did I miss that you would you like to make sure my readers know?
Jane & Bilal: One of the unique things we share in “Breaking Away” is how to identify not only the four levels of innovation, but also the needed leadership profile and what type of cultural environment is essential for success with each. This is why “Breaking Away’ is truly a breakthrough book. It lays out the world’s first innovation framework, and then additionally provides a roadmap to the leadership selections and cultural fit that will enhance the odds for success. Innovation should be managed similarly to an investment portfolio. You need different levels of risk, different levels of reward and different types of people to maximize the innovation outcomes.
For more information about Breaking Away, the best way is either www.breakingawaythebook.com, or www.winningjaguar.com. Both are chock full of information about Jane & Bilal and about innovation for the 21st century.
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