In the first part of this How to Innovate series, Nick Hixson shared with us why innovation is important, and some insight on how innovation is possible in every part of your business. In the second part, he looked at the process itself, and how we can all learn to be innovators. In this final article, he covers arguably the most important part, taking action and implementing the ideas.
The article was first published here at Hixsons Business Advisors. Hixsons is an award-winning company that specialises in strategy development for small to medium-sized businesses in the UK. Please do go and visit Nick’s website, there is a wealth of information on there about how Hixsons solve their customer’s problems and help them grow.
How to innovate – the process.
Assessing and testing.
1 Let patterns guide and actions decide
– to separate good ideas from bad use patterns to get directional sense then experiment to confirm. Is there a high potential job to be done? Is this a plausible economically scalable model? Can you correct its course when it goes wrong? Is early profitability possible? Is this the disruptive way to solve a problem which is simpler, more convenient or cheaper? And don’t get seduced by the plan because for every failure the numbers looked awesome!
2 What is the idea’s 4 P’s?
Which are population, price, penetration, and purchase frequency. You need to quickly estimate the financial potential this way. Make the population as small as possible – just your dream customers, you know what price you are pitching it at, and you know how often customers should buy it, and leave penetration last – solve for it after estimating the other three. Penetration is % of population who you think will buy. Then see if that stacks up, play with the numbers (a what if scenario) to see if it works.- solve for it after estimating the other three.
3 Reverse engineer success
– how to find the most critical assumptions – what does success look like; then, what are the two most critical things necessary to make it happen?
4 Test critical assumptions
– how to learn more about the idea – launch it in miniature; put it into an integrated experimental spread sheet model or simulation
5 Bring ideas to life
– how to get people to buy in – use the Hollywood pitch (Entourage) which is an anchor analogy to what it’s similar to, but with a twist to what is unique about it. Maybe a 90 second video (Jing), mock magazine ads, prototypes (complete with duct tape) storyboards, semi-functional website (wix.com) story of what it will look like 12 months hence. Not necessarily all professional, just ensure you’ve considered it all and brought it to life – get other people involved in the video, advertisement etc., particularly customers.
6 Everyday experimentation
– how to get good at experimentation – constantly look at new ways of doing things, use thought experiments (write them down), change the way you do simple things like your commute to work, eat at different times – anything to get you thinking differently about your life. What did you notice that was different?
7 Enjoy surprises
– how to learn the right thing from experiments – focus on the unexpected findings and look at the raw data. Avoid confirmation bias – seeing what you want to see, and don’t separate researchers and decision-makers because you want to keep the details and the anomalies. Frame the experiment to prove the reverse of what you want and involve people with no involvement in the idea because you get a different perspective.
1 Embrace selective scarcity
– how much should you invest in this – use tight timelines single decision-makers and few strategic choices so you don’t waste resource. Focus – be clear about success and what is acceptable or not but make that enabling not shackling. No committees – whoever is best qualified makes the decision no matter how junior. (Watch Tora! Tora! Tora!). Constrain time; remember, the first strategy is probably wrong, so force a stop, no overthinking, don’t overcomplicate, short timeframes.
2 Amplify resources
– where can you get innovation resources, what can you leverage externally, or redirect internally? Don’t do it all yourself – use strategic partners, manage risk rather than seek it. Bin zombie projects – be honest with yourself and use small teams and move faster.
3 Manage the interfaces
– how to manage between new and core activities – keep a list so you don’t remember what you’re trying to forget (don’t get sucked into existing ways), spin it off so the core activities don’t take over, have a mechanism for points of tension between the two – sometimes the new business acquires the old so it can ask for what it needs rather than the other way round. Ensure everyone is clear who has decision rights
4 Reward behaviour not outcomes
– how to reward innovation – reward the behaviour even if the outcome is unsuccessful. Perhaps ensure your quality assurance is at the beginning and not the end to help with that.
5 Get quick wins
– use 30 day milestones to show it’s worth more investment.
6 Practice makes perfect
– to systematically get better, put yourself in places where you have to practice. Talk to entrepreneurs and the self-employed about what they do and how they do it – they are generally very happy to share. Teach someone else; learn as you go.
Strategy development is a critical issue for business success, please do share what works for you in the comments section.
About: Nick Hixson is a founding partner at Hixsons Business Advisors. Hixsons, based in Bournemouth, UK, is an award- winning company specialising in helping to grow small to medium-sized companies. You can contact Hixsons here.
Implementation Matters is edited by Rob Ward the founding partner of Cosmapec Supply Chain Management. He co-founded Cosmapec to help companies and executive teams establish, develop and optimise their supply chains. If you want to learn more about the Cosmapec approach to strategy development, visit us at http://www.cosmapecsupplychainmanagement.com or contact us