Extract from "Creative Genius: The Innovation Handbook for Business Leaders" by Peter Fisk ... Find out more about the book at www.CreativeGeniusLive.com and support in making innovation happen in
Extract from "Creative Genius: The Innovation Handbook for Business Leaders" by Peter Fisk ... Find out more about the book at www.CreativeGeniusLive.com and support in making innovation happen in your business at www.theGeniusWorks.com
In an extract from his book “Creative Genius: The Innovation Handbook for
Business Leaders” Peter Fisk looks at the attributes of an innovation strategy.
Innovation is at the top of the business agenda, the most important source of
competitive advantage, driver of profitable growth. It gives an organisation
energy and purpose. It creates new interest and relevance for customers. It adds
trust and hope to investors. And it results in a maelstrom of creative actions, some
focused and others dispersed.
Yet few companies have an innovation strategy, one which aligns, integrates and
focuses innovation efforts across the organisation to deliver short and long-term
business results. Most businesses have a multitude of innovative projects going
on, but most of them are within functions, within categories, within markets. They
are dispersed, often tactical, and with limited support
Whilst everyone wants a piece of innovation, many of different views as to what it
For some it is about new product launches, and improving market share
Others are more interested in ways to work smarter and improve margins
Some see innovation as hugely technical, with tangible, patentable outputs
Others focus on the creativity, generating better ideas, and intellectual
Some see innovation as human progress, making people’s lives better
Others simply as a way of improving ROI, growth and value creation
Innovative companies have some common factors. They see innovation as their
primary source of competitive differentiation in their markets, the sustained
driving force behind distinctive products and approaches. They know how to
improve the return on investments and assets, doing more with them in more
places, focused and prioritised as a primary component of business strategy.
They focus innovation on the best market opportunities, and areas of best
commercial return long-term. Intel, for example, have a relentless focus on the
future - driving its business focus and cultural mindset.
This strategy is based on a deep understanding of their markets, current and
future, customers and non-customers. Most companies have huge amounts of
research, databases and trend analysis, but few can effectively synthesise and
apply it. Innovative companies put particular focus on how they interpret and
exploit insights. P&G’s ability to “sense and connect” was the symbol and
tangible action that shifted the consumer goods leader from product to customercentric.
An innovation strategy should have the following components
Alignment to business and market strategy – a clear definition of the
business purpose and direction, meaning the reason the company exists,
what it does for people, and the long-term priorities for the business. This
might also be articulated as a vision, how the world will be in the future,
and a mission, what the business wants to achieve itself long-term. Whilst
this strategy will cover 3-10 years depending on industry, innovation
should also recognise the business plan, with specific performance targets
over 1-3 years, although innovation should be careful not to become too
driven by this shorter-term perspective
Optimising the business and product portfolios – ensuring that there is a
good balance of categories and geographies, products and services to
achieve short and long-term objectives. Whilst most businesses think
through their product portfolio (for example using the BSG growth/share
matrix – identifying their dogs, cash cows, rising stars and question
marks), fewer companies look more strategically (using Ansoff’s matrix to
prioritise new and existing markets), and indeed at the broader business
categories which they are in (avoiding the mistakes of Kodak in missing the
digital market, or Microsoft being slow to see the power of the internet).
Defining the innovation priorities – specifying the priorities for
innovation, the markets and categories where innovation is most important,
and the more specific customer segment and product ranges to focus on.
More strategically, it is about getting a balance between “incremental”
and “next generation and “game changing” projects, recognising that a
mixture of each, with different levels of risk and reward is required. It
might include platform strategies to optimise ranges of products
developed with a similar underlying specification over time. “Horizon
planning” is particularly useful in defining the priorities in short, medium
and longer terms. The strategy also defines the capabilities and resources
to achieve these.
Innovation strategies are often more difficult that other strategies, as they work
across functions, rather like customer or sustainability strategies, and so have
many stakeholders, and often no outright functional owner. They might be “fixed”
or “emergent” in their nature, the former having little uncertainty, and is driven
top down, the latter having more flexibility, evolving bottom up and top down in
response to new insights and opportunities. “Emergent” strategies are more
suited to a fast changing market, like most are today.
Technology businesses are notorious for their “product roadmaps” which are
very definitive, fixed plans of when new technologies will be available to market.
Typically driven by R&D and engineers they encourage a “product push”
mentality in the business, without much thought for whether markets actually
want a endlessly higher performance product, or whether other factors matter.
Philips is an example of a company which slowly realised that this macho “push”
was one of its biggest problems, and introduced a more customer-centric
approach to its business, and innovation, and a “pull” driven by a customer
roadmap based on customer motivations and aspirations.
The capabilities and resources to make these innovations happen do not have to
come from within. Innovative companies recognise that they can be much more
successful with partners than alone, fusing capabilities and expertise to do things
which other cannot, delivering products and services which are not just
components of solutions, but really solve customer problems. Partners are often
for unusual but related areas. An example of innovative collaborations includes
H&M’s celebrity partnerships with the likes of Roberto Cavalli, Kylie Minogue,
and Victor & Rolf.
They have simple yet effective processes and systems for turning the best ideas
into commercial applications, the ability to develop and launch new solutions fast
and effectively. This sounds obvious, but innovation is typically a non-functional,
cross-business challenge, and sits outside business as usual, and its supporting
processes. Apple realises that organisational boundaries and beaurocracies are
the biggest killers of innovation.
Lego ... innovation is much more than creative play
Lego, “toy of the century”, is reinventing how it innovates through D4B, Design
In Danish “leg godt” means “play well”, and that remains the inspiration for the
brand. Since the creation of the timeless plastic building blocks in 1932 by Ole
Kirk Kristiansen, Lego has been one of the world’s most popular toys. It has come
a long way from a small carpenter’s workshop to become the fifth largest toy
manufacturer in the world.
Indeed the bricks were initially made of wood, and it was not until 1958 that they
became plastic and colourful – acquiring its unique interlocking tubes that offer
the opportunity to build houses and cities, dinosaurs and robots only limited by
The Lego Group, based in Billund in Denmark and with 4500 employees, is now
led by the founder’s grandchild, Kjeld Kirk Kristiansen. Its purpose is “to inspire
children to explore and challenge their own creative potential”. It does this by
helping children to “learn through play” – developing their creative and
structured problem-solving, curiosity and imagination, interpersonal skills and
physical motor skills.
However, in 2005, Lego started to run into trouble. It was struggling against the
high-technology and computer-based games, the power of fashionable
personalities from the likes of Disney, and low cost producers of other plastic
bricks. It responded by diversifying, creating more and more different products which only made things worse. After three years of headless creativity, leading to
more than 14,000 branded components, the Danes realised that they needed
more focus, they needed to return to “classic” Lego, with fewer better products,
engaging its 20 million customers more deeply.
Aligning business and innovation
Lego’s new design system, D4B is redefining how its whole innovation process is
run. Key elements of the approach are a stronger alignment between business
strategy and design strategy, more collaboration between functions, more
challenge and rigour in the creativity and analysis, a more consistent approach
which is easy to share, and better innovation that drives profitable growth
There are more than 120 Lego designers, drawn from 15 nationalities, small
youthful others deeply experienced, most based in Billund, Denmark. A number
of others work in satellite offices around the world, adapting ideas to local tastes
and tracking new trends and technologies, particularly in Japan. Whilst people
were previously chosen most for their creativity, they are now drawn as much for
their passion for the Lego brand, and wanting to create its future. The team also
collaborates with many universities, and especially with MIT Media Lab, from
which the Mindstorms system emerged.
The D4B process seeks to create a more holistic, creative and commercial
approach to innovation. There is more stretch and stimulus, but also more rigour
and evaluation. It embraces new language and tools which form an innovation
“DNA” and new computer-based simulators for rapid prototyping allow quick
iterations. Time to market has also reduced, from 24 months to 9 months. It moved
from a focus on products to customers, and how all aspects of the business and
customer experience could be part of the innovation.
There are three components to D4B
Lego innovation model – more collaborative in the early stages, more
aligned to objectives and resources, more tested and focused on results
Lego innovation roadmap – clearly structured phases of development,
bringing a consistency of steps and evaluation gates, and strong links
Lego foundation overview – a simple way of visualising the outputs through
posters rather than lengthy documents, enabling more engagement,
comparison, and better decisions.
The process is separated into “P” stages for prototyping, and “M” phases for
manufacturing. The focus is much more on making ideas tangible quickly, and
thereby making more evaluation and focus possible in later stages, so that all
resources can be focused on the best opportunities. The stages within the phases
P0 (portfolio kick-off): defining the business objectives, and focusing on
then key issues to be resolved across the business and portfolio
P1 (opportunity freeze):: exploring what opportunities would solve the
issues identified, approving the business and financial case for doing the
P2 (concept freeze): making sense of the emerging concepts, and how they
apply to each function, from communication to customer service.
P3 (portfolio freeze): deciding which concepts should be turned into
projects, specifying all the requirements for development, and the
The P cycle can take up to 6 months, after which there is a go/no-go decision as to
whether the project enters M cycle in which there are 5 more stages
M1 (project kick-off): designers and product managers work together to
refine the concept specification, and the plan to take it to market
M2 (business freeze): the business case is finalised and the product design
is completed to meet the business requirements
M3 (product freeze): product design evolves into packaging, marketing
and communication, aligning the product concept with the overall brand
M4 (communication freeze): packaging and communication materials are
finalised, and the supply chain is specified ready for manufacturing
M5 (procurement freeze): the supply chain is developed, manufacturing
begins and the product is launched.
Designers were initially concerned whether such a structured process,
dependent on commercial objectives, would stifle creativity. What they found
was that they no longer need to think about how they go about establishing the