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Cultivating Innovation for Smarter Business

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MINDJET PERSPECTIVES
Cultivating Innovation
for Smarter Business
2MINDJET PERSPECTIVES
It seems like everywhere you look, there’s yet another article covering the perks and perils of
inno...
3MINDJET PERSPECTIVES
Right up until the second it’s too late, it’s easy to believe that fighting disruption is a viable
b...
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Cultivating Innovation for Smarter Business

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It seems like everywhere you look, there’s yet another article covering the perks and perils of innovation. It’s been written about in publications from the New York Times to the Huffington Post, making it seem like the next big thing is the only thing on the mind of most companies. All this attention is well-deserved -- innovation isn't just a core business concept; it’s a race for competitive advantage. The pace of production has turned the rush to market from a marathon to a 15-yard dash, and of course, this is not without its drawbacks. Here's how to cultivate innovation for smarter business.

It seems like everywhere you look, there’s yet another article covering the perks and perils of innovation. It’s been written about in publications from the New York Times to the Huffington Post, making it seem like the next big thing is the only thing on the mind of most companies. All this attention is well-deserved -- innovation isn't just a core business concept; it’s a race for competitive advantage. The pace of production has turned the rush to market from a marathon to a 15-yard dash, and of course, this is not without its drawbacks. Here's how to cultivate innovation for smarter business.

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Cultivating Innovation for Smarter Business

  1. 1. MINDJET PERSPECTIVES Cultivating Innovation for Smarter Business
  2. 2. 2MINDJET PERSPECTIVES It seems like everywhere you look, there’s yet another article covering the perks and perils of innovation. It’s been written about in publications from the New York Times to the Huffington Post, making it seem like the next big thing is the only thing on the mind of most companies. All this attention is well-deserved -- innovation isn’t just a core business concept; it’s a race for competitive advantage. The pace of production has turned the rush to market from a marathon to a 15-yard dash, and of course, this is not without its drawbacks. Innovation is closely tied to disruption, full-value thinking, and agile business strategy. Agile is an attempt to bring process back in balance and restore the priority of innovation to our work, and companies that do this well know that the best way to facilitate innovation is to remain steady to the agile process. Agile naturally supports ingenuity through the practice of short sprints, where testing, learning and iteration -- with a relatively quick turnaround — are so key. What follows is our collective take on the overall subject: Why disruption can save your business; why companies sometimes fail to innovate; tips, tricks, traps and pitfalls; and in the end, how you can inspire innovation and give your business the power to thrive. Jascha Kaykas-Wolff Chief Marketing Officer, Mindjet JASCHA KAYKAS-WOLFF Intro
  3. 3. 3MINDJET PERSPECTIVES Right up until the second it’s too late, it’s easy to believe that fighting disruption is a viable business strategy — especially if you’re the bigger player in the equation. But today’s winner’s circle doesn’t discriminate when it comes to size or position. We’ve seen disruptive innovations out-maneuver businesses of every type, completely obliterate entire industries and generate exorbitant amounts of revenue at breakneck rates. It’s an intimidating fate for any organization, but nonetheless sealed: take action now, or someone will do it for you. The Speedy S-Curve Every business is familiar with the s-curve cycle. It essentially assumes that after a start-up phase, a rapid increase in revenue occurs, and is then followed by an eventual decline. Best- case scenario, successive curves will follow to continue the growth of the business in an upward direction. History tells us that these cycles take a considerable amount of time to complete, but like most other areas of business, today’s fast-paced and collaborative world has altered the norm considerably. Let’s take cars for example. In 2000, Zipcar’s debut was a pretty radical move in the American transportation industry. By appealing to native travelers rather than out-of-towners, they managed to offer a more convenient and cost-effective option than traditional rental agencies. In 2010, RelayRides went a step further with peer-to-peer car sharing, allowing individual owners to rent out their vehicles on their own pricing terms. What an environmentally friendly solution for getting someone else to pay off your car. Plan for Disruption, Save Your Business
  4. 4. 4MINDJET PERSPECTIVES Then again, it’s not all about saving money. Consider how Uber, a 2011 venture-funded start-up, rattled the longstanding taxicab industry — a service that can be traced back to carriages for hire in 1640 — by connecting consumers to luxury cars via mobile application. Uber’s prices are currently twice what conventional cabs charge, and yet the demand is so high that the company plans to add 25 cities (all outside of the U.S.) to its service list by the close of this year. While the future of the car industry could always change, one thing is for certain: each offering decreased the legacy companies’ consumer bases, and instead of seeing successive s-curves, they are more likely to find themselves at a dead end. No Exception to the Rule If you think you might be exempt from this shift, think again. Between 2000 and 2005 the music industry went from a global marketplace of $40 billion, to $28 billion and digital sales went from zero to $700 million. That’s major disruption in an enormous marketplace. Or how about Kodak, Polaroid and Borders, which, despite their popularity, were also nonetheless affected by digitization. Instead of embracing the movement they attempted to maintain their normal ways of operating, and in the end completely lost control of distribution, pricing and marketing. Eventually, each company relegated itself to a specialized and dwindling niche, if not a complete shuttering. Wanting to hold tight to what made you successful from the start is understandable, but not practical and, as you can see, potentially fatal. Forgiveness is Achievable TThe good news is that disruption doesn’t have to be one-shot type of deal. Should the path you choose lead you astray, there’s a good chance you can course correct in time. When Netflix inflated its pricing model to reflect the switch from discs to streaming, their stock dropped 20 percent and they lost a whopping 800,000 U.S. subscribers in Q3, 2011. When the company realized they’d made a mistake, they released the following statement: Plan for Disruption, Save Your Business The last few months…have been difficult for shareholders, employees, and most unfortunately, many members of Netflix. While we dramatically improved our $7.99 unlimited streaming service by embracing new platforms, simplifying our user-interface, and more than doubling domestic spending on streaming content over 2010, we greatly upset many domestic Netflix members with our significant DVD-related pricing changes, and to a lesser degree, with the proposed-and-now- cancelled rebranding of our DVD service. In doing so, we’ve hurt our hard-earned reputation, and stalled our domestic growth. But our long-term streaming opportunity is as compelling as ever and we are moving forward as quickly as we can to repair our reputation and return to growth.
  5. 5. 5MINDJET PERSPECTIVES Netflix’s stock, which traded as low as U.S. $63.85 in 2011, rose 80% at the beginning of 2012, and they currently hold a record number of subscribers. It’s not a complete recovery, and it’s hard to say how the looming competition (Redbox, Hulu, etc.) will ultimately affect business, but it’s clear that their apology has been accepted. Disrupt When You’re Ahead In light of companies that have been disrupted, failed at disrupting and ultimately been forgiven for disrupting badly, it makes sense to say the best time to take action is when you’re ahead. With that mindset, perhaps car rental agencies would have thought of Zipcar’s idea, or Yellow Cab would have thought of adding luxury and mobile functionality like Uber. Maybe Kodak would have survived, and maybe Blockbuster wouldn’t have been ousted by Netflix. CEOs must seek out opportunities for healthy risk taking, but all employees of the 21st century could benefit from this mentality. A good dose of paranoia goes a long way by keeping us on our toes, thinking differently and prepared to pivot when need be. It’s this kind of momentum that truly allows course correction as well as successful business agility. Plan for Disruption, Save Your Business
  6. 6. 6MINDJET PERSPECTIVES Innovation is a hot topic in business these days — between uproar from industry influencers claiming it’s dead and speculation that the nature of the word itself is changing, squeezing out the Next Big Idea is at the top of many a company checklist. Organizations are striving to stay ahead of industry changes while keeping the creative ball rolling, but navigating the quagmire that is today’s agile business landscape can leave some companies in a veritable ingenuity vacuum. Below are 5 ways that companies fail at innovation – we don’t recommend them. 1. They don’t teach managers to ask questions (at least not the right ones) Natural leaders tend to be tenacious problem-solvers — it’s part of what makes them good at managing. But there’s a downside to all of that incessant resourcefulness: managers often spend so much time answering questions that they forget to ask them, or when they do, it’s frequently on behalf of others. Leaders have a unique opportunity to push innovation through empowering their teams with food for thought: “ask not what your team can get done, but what your team thinks should get done.” Or something like that. 2. They like to talk about embracing disruption — someday Agile business means adaptable business, and that’s not a philosophy that can be employed piecemeal. Changing up the business model is becoming a necessity, and while most CEOs have never had to deal with it, disruptive technology is absolutely everywhere — attempting to outrun it is risky at best. 5 Ways Companies Fail at Innovation
  7. 7. 7MINDJET PERSPECTIVES 5 Ways Companies Fail at Innovation 3. They can’t get over the honeymoon Vijay Govindarajan, co-author of The Other Side of Innovation, says “successful companies tend to fall into three traps that make the glory days fleeting.” One of those is psychological, wherein companies become so attached to their initial successes that they don’t notice when something new — or more effective — dislodges their early triumphs. Despite the fact that industry giants like Dell and Microsoft are guilty of it, fixating on new market impact is a rookie mistake. 4. They cut corners through outsourcing The practice of outsourcing is likely the business move most hated by in-house employees and consumers alike, yet the most widely practiced by companies trying to squeeze every last drop out of their profit margins. In terms of innovation, outsourcing is disastrous: new initiatives can only be successfully rolled out when independently operated vendors agree on a shared course of action. Innovation simply can’t survive that kind of roadblock. 5. They don’t think beyond tomorrow (but they pay for it today) Typically, companies don’t become even marginally successful without some type of long-term plan, which unfolds alongside initial market testing efforts that support proof of concept. But in the face of today’s constantly fluctuating technological development, it’s less about being perpetual and more about being sustainable. Giving away free support and access to infrastructures, though integral, must be built in to comprehensive financial strategies, lest the true market cost of conceiving and manufacturing come back to bite you squarely in the bank.
  8. 8. 8MINDJET PERSPECTIVES Innovation is important to business — and increasingly so as market needs have become more demanding in light of advancements in social, mobile and cloud-based environments. Even the Enterprise 2.0 Conference, a leading event on all things enterprise-y, this year changed its name to E2 Innovate in order to reflect these shifts. But as the need for innovation accelerates, so does a general misunderstanding of how to apply it. Indeed, “innovation” is becoming a buzzword, and as anyone who’s been hanging out in the tech industry for just about any amount of time can tell you, that equals foggy misuse and, even worse, overindulgence. Innovation Only = Boom Splat While being ahead of the competition is definitely something you want, focusing all of your energy on that one ambition risks allowing innovation to be the news itself. Bruce Levinson, VP of brand strategy at Anthem Worldwide, named a couple of examples in a recent Fast Company article, including Listerine PocketPaks breath strips. To Listerine’s credit, it’s true the strips reinvigorated the brand, spread much-needed awareness and birthed a slew of copycat products; but, with the honeymoon phase long gone, annual sales have dropped from the initial $175 million to roughly $25 million. What was once a trendy and seemingly promising product is now considered by many as turn-of-the-century nostalgia. If Innovation is Your Only Card, Don’t Play It
  9. 9. 9MINDJET PERSPECTIVES Copycat Innovation = Splat Splat Before we treat copying innovation as a viable business model, let’s consider the sad tale of Hipstamatic. Sure, Instagram essentially mimicked the digital photography app by providing various vintage-y filters and immediate gratification, but its creators also managed to leap-frog the product by tacking on what Hipstamatic had left out: a social element and a much friendlier price tag. By the time Hipstamatic realized it had to “catch up” it was already too late. Though they tried, they couldn’t provide anything consumers didn’t already have. Fast Company recently published a three-part series on the downfall of Hipstamatic (No Filter: How Hipstamatic Pivoted Into a Flat Spin), but what it boils down to is quite simple. “For a startup that prides itself on the originality and creativity of its users, Hipstamatic spent much of 2012 chasing many other companies’ ideas,” writes Austin Carr, before plugging the following quote from Hipstamatic founder, Lucas Buick: “I can honestly say that there was a lot of talk about Instagram, Path, and social. Ultimately, that’s what shifted our focus away from who we really are.” No Innovation! (But why?) Clay Christensen, Professor of Business Administration at the Harvard Business School (HBS) and author of The Innovator’s Dilemma, spoke at 2012’s BoxWorks conference in San Francisco. In his talk, Christensen dismissed innovation, labeling it a job-killer and even putting the future of HBS into question. Instead, he argued for the importance of creating a product or service by way of understanding the job that customers are trying to accomplish. Christensen used IKEA as an example of a company that by now probably should’ve been disrupted — except there’s no cost-effective way to copy or improve upon their model. He went on to explain that this is simply because IKEA entered the scene with a true understanding of the job their customers want to do: furnish their place that same day. They then optimized their entire store flow and shopping experience around that one want. So, what can we learn from all of this? Companies have certainly got to roll with the punches, and part of that is strategically innovating and changing at a continuous pace. But to Clay’s point, staying afloat is about keeping tabs on the other basic fundamentals of business: customer needs, a strong team, a clear vision, etc. As eBay CEO John Donahue says in this interview with ZDNet,” “The balance of those two things is what makes it fun and what makes it interesting.” If Innovation is Your Only Card, Don’t Play It Listerine Pocketpaks were so closely associated with a product form, rather than a brand equity, that it lacked the authority to sustain a category leadership position. The brand may have been more successful had it pinned its brand proposition on, say, Listerine freshness to-go or intimate togetherness or anything other than the product form itself, which was quickly copied... It’s always best to build equity that elevates the conversation to emotional benefits, values, and beliefs, rather than a purely functional one. That’s much harder to copy.
  10. 10. 10MINDJET PERSPECTIVES Innovation isn’t anything new, but the way we embrace and ignite it is. Because agile business means adaptable business, old-hat approaches have to be put aside in favor of disruptive techniques, and innovation must be built in to strategic plans tangibly rather than just conceptually. At Mindjet, we talk a lot about “working inspired,” which in terms of innovation, means we focus on the process of translating our creativity into growth. We believe that industry leaders succeed because they not only come up with great ideas, but are laser-focused on using those sparks of genius to generate great plans that drive business forward with killer execution. One such organization is Ekso Bionics, a company dedicated to utilizing cutting-edge technology and engineering to help people rethink physical limitations. In their mission to do the remarkable, Ekso uses Mindjet to map business plans, execute strategies, and collaborate with the many brilliant teams involved in their effort to reimagine exoskeleton technology. We’re honored to be a part of their mission – check out this video to see how Mindjet and Ekso Bionics teamed up to help change lives. In a world where agile is king, innovation is like the royal guard – the last line of defense between your company’s relinquishing the keys to the castle, or its exponential expansion to the four corners of the industry. Don’t get left behind. Want to know more? After you’ve assembled a stellar team and gotten the innovation process underway, adding the right technology can help you capture your brilliant ideas and build on them with your team. There are plenty of options to choose from, but Mindjet’s software allows you to brainstorm on a global scale, enabling your team to capture and continually build on creative sessions by connecting the ideas that spark innovation. To find out more about how Mindjet can help you turn innovation into action, visit Conspire, Mindjet’s company blog.
  11. 11. 11MINDJET PERSPECTIVES
  12. 12. Work Inspired © 2012-2013. Mindjet Inc. All rights reserved. Mindjet, the Mindjet logo, MindManager, Mindjet Connect are trademarks of Mindjet, registered in the U.S. and other countries. Work Inspired

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