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.

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Cultivating Innovation for Smarter Business

  1. 1. MINDJET PERSPECTIVESCultivating Innovationfor Smarter Business
  2. 2. 2MINDJET PERSPECTIVESIt seems like everywhere you look, there’s yet another article covering the perks and perils ofinnovation. It’s been written about in publications from the New York Times to the HuffingtonPost, 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 forcompetitive advantage. The pace of production has turned the rush to market from a marathonto 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 isan 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 remainsteady to the agile process. Agile naturally supports ingenuity through the practice of shortsprints, 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, howyou can inspire innovation and give your business the power to thrive.Jascha Kaykas-WolffChief Marketing Officer, MindjetJASCHAKAYKAS-WOLFFIntro
  3. 3. 3MINDJET PERSPECTIVESRight up until the second it’s too late, it’s easy to believe that fighting disruption is a viablebusiness strategy — especially if you’re the bigger player in the equation. But today’s winner’scircle doesn’t discriminate when it comes to size or position. We’ve seen disruptive innovationsout-maneuver businesses of every type, completely obliterate entire industries and generateexorbitant amounts of revenue at breakneck rates.It’s an intimidating fate for any organization, but nonetheless sealed: take action now, or someonewill do it for you.The Speedy S-CurveEvery business is familiar with the s-curve cycle. It essentially assumes that after a start-upphase, 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 upwarddirection. History tells us that these cycles take a considerable amount of time to complete, butlike most other areas of business, today’s fast-paced and collaborative world has altered thenorm considerably.Let’s take cars for example. In 2000, Zipcar’s debut was a pretty radical move in the Americantransportation industry. By appealing to native travelers rather than out-of-towners, theymanaged to offer a more convenient and cost-effective option than traditional rental agencies. In2010, RelayRides went a step further with peer-to-peer car sharing, allowing individual ownersto rent out their vehicles on their own pricing terms. What an environmentally friendly solution forgetting someone else to pay off your car.Plan for Disruption, Save Your Business
  4. 4. 4MINDJET PERSPECTIVESThen 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 forhire in 1640 — by connecting consumers to luxury cars via mobile application. Uber’s prices arecurrently twice what conventional cabs charge, and yet the demand is so high that the companyplans 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 offeringdecreased the legacy companies’ consumer bases, and instead of seeing successive s-curves, theyare more likely to find themselves at a dead end.No Exception to the RuleIf you think you might be exempt from this shift, think again. Between 2000 and 2005 the musicindustry went from a global marketplace of $40 billion, to $28 billion and digital sales went fromzero to $700 million. That’s major disruption in an enormous marketplace.Or how about Kodak, Polaroid and Borders, which, despite their popularity, were also nonethelessaffected by digitization. Instead of embracing the movement they attempted to maintain theirnormal ways of operating, and in the end completely lost control of distribution, pricing andmarketing. Eventually, each company relegated itself to a specialized and dwindling niche, if not acomplete shuttering.Wanting to hold tight to what made you successful from the start is understandable, but notpractical and, as you can see, potentially fatal.Forgiveness is AchievableTThe good news is that disruption doesn’t have to be one-shot type of deal. Should the path youchoose 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 stockdropped 20 percent and they lost a whopping 800,000 U.S. subscribers in Q3, 2011. When thecompany realized they’d made a mistake, they released the following statement:Plan forDisruption,Save YourBusinessThe last few months…have been difficult for shareholders, employees, and mostunfortunately, many members of Netflix. While we dramatically improved our$7.99 unlimited streaming service by embracing new platforms, simplifying ouruser-interface, and more than doubling domestic spending on streaming contentover 2010, we greatly upset many domestic Netflix members with our significantDVD-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-earnedreputation, and stalled our domestic growth. But our long-term streaming opportunityis as compelling as ever and we are moving forward as quickly as we can to repairour reputation and return to growth.
  5. 5. 5MINDJET PERSPECTIVESNetflix’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 tosay how the looming competition (Redbox, Hulu, etc.) will ultimately affect business, but it’s clearthat their apology has been accepted.Disrupt When You’re AheadIn light of companies that have been disrupted, failed at disrupting and ultimately been forgivenfor disrupting badly, it makes sense to say the best time to take action is when you’re ahead. Withthat mindset, perhaps car rental agencies would have thought of Zipcar’s idea, or Yellow Cabwould have thought of adding luxury and mobile functionality like Uber. Maybe Kodak would havesurvived, 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 centurycould benefit from this mentality. A good dose of paranoia goes a long way by keeping us on ourtoes, thinking differently and prepared to pivot when need be. It’s this kind of momentum that trulyallows course correction as well as successful business agility.Plan forDisruption,Save YourBusiness
  6. 6. 6MINDJET PERSPECTIVESInnovation is a hot topic in business these days — between uproar from industry influencersclaiming it’s dead and speculation that the nature of the word itself is changing, squeezing out theNext Big Idea is at the top of many a company checklist. Organizations are striving to stay aheadof industry changes while keeping the creative ball rolling, but navigating the quagmire that istoday’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 atmanaging. But there’s a downside to all of that incessant resourcefulness: managers often spendso much time answering questions that they forget to ask them, or when they do, it’s frequently onbehalf of others. Leaders have a unique opportunity to push innovation through empowering theirteams with food for thought: “ask not what your team can get done, but what your team thinksshould get done.” Or something like that.2. They like to talk about embracing disruption — somedayAgile business means adaptable business, and that’s not a philosophy that can be employedpiecemeal. Changing up the business model is becoming a necessity, and while most CEOs havenever had to deal with it, disruptive technology is absolutely everywhere — attempting to outrun itis risky at best.5 Ways Companies Fail at Innovation
  7. 7. 7MINDJET PERSPECTIVES5 WaysCompanies Failat Innovation3. They can’t get over the honeymoonVijay Govindarajan, co-author of The Other Side of Innovation, says “successful companies tendto fall into three traps that make the glory days fleeting.” One of those is psychological, whereincompanies become so attached to their initial successes that they don’t notice when somethingnew — or more effective — dislodges their early triumphs. Despite the fact that industry giantslike Dell and Microsoft are guilty of it, fixating on new market impact is a rookie mistake.4. They cut corners through outsourcingThe practice of outsourcing is likely the business move most hated by in-house employees andconsumers alike, yet the most widely practiced by companies trying to squeeze every last drop outof their profit margins. In terms of innovation, outsourcing is disastrous: new initiatives can onlybe 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-termplan, 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 aboutbeing perpetual and more about being sustainable. Giving away free support and access toinfrastructures, though integral, must be built in to comprehensive financial strategies, lest thetrue market cost of conceiving and manufacturing come back to bite you squarely in the bank.
  8. 8. 8MINDJET PERSPECTIVESInnovation is important to business — and increasingly so as market needs have become moredemanding in light of advancements in social, mobile and cloud-based environments. Even theEnterprise 2.0 Conference, a leading event on all things enterprise-y, this year changed its nameto E2 Innovate in order to reflect these shifts.But as the need for innovation accelerates, so does a general misunderstanding of how to applyit. Indeed, “innovation” is becoming a buzzword, and as anyone who’s been hanging out in thetech industry for just about any amount of time can tell you, that equals foggy misuse and, evenworse, overindulgence.Innovation Only = Boom SplatWhile being ahead of the competition is definitely something you want, focusing all of yourenergy 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 arecent 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 slewof copycat products; but, with the honeymoon phase long gone, annual sales have dropped fromthe initial $175 million to roughly $25 million. What was once a trendy and seemingly promisingproduct is now considered by many as turn-of-the-century nostalgia.If Innovation is Your Only Card, Don’t Play It
  9. 9. 9MINDJET PERSPECTIVESCopycat Innovation = Splat SplatBefore we treat copying innovation as a viable business model, let’s consider the sad tale ofHipstamatic. Sure, Instagram essentially mimicked the digital photography app by providingvarious vintage-y filters and immediate gratification, but its creators also managed to leap-frogthe product by tacking on what Hipstamatic had left out: a social element and a much friendlierprice tag. By the time Hipstamatic realized it had to “catch up” it was already too late. Thoughthey 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 spentmuch of 2012 chasing many other companies’ ideas,” writes Austin Carr, before plugging thefollowing quote from Hipstamatic founder, Lucas Buick: “I can honestly say that there was a lot oftalk about Instagram, Path, and social. Ultimately, that’s what shifted our focus away from whowe really are.”No Innovation! (But why?)Clay Christensen, Professor of Business Administration at the Harvard Business School (HBS) andauthor of The Innovator’s Dilemma, spoke at 2012’s BoxWorks conference in San Francisco. In histalk, Christensen dismissed innovation, labeling it a job-killer and even putting the future of HBSinto question. Instead, he argued for the importance of creating a product or service by way ofunderstanding the job that customers are trying to accomplish.Christensen used IKEA as an example of a company that by now probably should’ve beendisrupted — except there’s no cost-effective way to copy or improve upon their model. He wenton to explain that this is simply because IKEA entered the scene with a true understanding of thejob their customers want to do: furnish their place that same day. They then optimized their entirestore 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’spoint, staying afloat is about keeping tabs on the other basic fundamentals of business: customerneeds, a strong team, a clear vision, etc.As eBay CEO John Donahue says in this interview with ZDNet,” “The balance of those two things iswhat makes it fun and what makes it interesting.”If Innovation isYour Only Card,Don’t Play ItListerine Pocketpaks were so closely associated with a product form, rather than abrand 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 productform itself, which was quickly copied... It’s always best to build equity that elevatesthe conversation to emotional benefits, values, and beliefs, rather than a purelyfunctional one. That’s much harder to copy.
  10. 10. 10MINDJET PERSPECTIVESInnovation isn’t anything new, but the way we embrace and ignite it is. Because agile businessmeans adaptable business, old-hat approaches have to be put aside in favor of disruptivetechniques, and innovation must be built in to strategic plans tangibly rather than justconceptually.At Mindjet, we talk a lot about “working inspired,” which in terms of innovation, means we focuson the process of translating our creativity into growth. We believe that industry leaders succeedbecause they not only come up with great ideas, but are laser-focused on using those sparks ofgenius to generate great plans that drive business forward with killer execution.One such organization is Ekso Bionics, a company dedicated to utilizing cutting-edge technologyand 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 manybrilliant teams involved in their effort to reimagine exoskeleton technology. We’re honored to be apart of their mission – check out this video to see how Mindjet and Ekso Bionics teamed up to helpchange lives.In a world where agile is king, innovation is like the royal guard – the last line of defense betweenyour company’s relinquishing the keys to the castle, or its exponential expansion to the four cornersof the industry. Don’t get left behind.Want to know more?After you’ve assembled a stellar team and gotten the innovation processunderway, adding the right technology can help you capture your brilliantideas and build on them with your team. There are plenty of options to choosefrom, but Mindjet’s software allows you to brainstorm on a global scale,enabling your team to capture and continually build on creative sessions byconnecting 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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