Get outside in for innovation

Creative disruption needs outliers. Or insiders with outside in thinking.

Innovation needs a DNA more than anything. It needs a DNA that refuses to be stereotyped and be willing to walk over coals for it. Out of syllabus business problems today need out of the box creators and makers. Or shall we say non-conformists.

The smartest innovations and creative disruptions are catalyzed by these "outsiders" sometimes seen as strange creatures. You will often see them in action at work, around you, questioning, trying the radical, exploring emergent technologies, breaking apart models, experimenting relentlessly. Or most of the times being spurned and scorned by status-quoists. You might even recognize one in the mirror.

Bestselling authors like Malcolm Gladwell refer to them as outliers. Pundits like Clayton Christensen call them disruptive innovators, who not only create new markets, build differentiated products & services but also drive cost-efficiencies. These are the "strangers" amongst us, around us, who suddenly spot an opportunity that others don't and shake up a system to transform its normal.

Take the case of Katalin Karikó, who defied both odds and professional rejections to pioneer the mRNA technology that ultimately gave the world Covid-19 vaccines in record time. She was also tipped for a Nobel.

Air BNB was founded by designers who studied together. When the industry and its biggest brands were busy looking at hospitality being the preserve of hotels, resorts and whatnots, Air BNB?imagined residences to be the largest potential supply of stays. They created a smart, asset-light and network-rich model with homeowners, thereby taking Air BNB up in valuation and affection charts. It breached the $100 billion value and opened a transformative world of leisure for customers thereby disrupting the traditional HORECA model. It was the outsider’s insight (design folks) that joined the dots between inert home assets, their proud homeowners wanting to earn off these assets, tech-networks, hyperlocal storytelling and shifting preferences of consumers towards authentic experiences.

Guy Laliberte and?Gilles Ste-Croix created Cirque du Soleil. Here, gutsy street performers completely reimagined and disrupted the circus space and business (format, model, contracts, performances, scale, storytelling and schematics). They changed stage performance forever with their creativity thereby creating a brand new category. A category that displaced incumbent industry leaders like Ringling Bros. and Barnum & Bailey. Take a look at this remarkable innovation practice that is still relentless at Cirque.

Madame CJ Walker gave black communities in the United States and other parts of the world, a range of cosmetics, haircare and more than that, dignity. This was a market completely ignored and spurned by the leading brands then, for reasons many. And not much had to do with business. She also gave her community, jobs & self respect and rose to be the first self-made millionaire.

The list goes on. This includes many which are well known like Grameen Bank, Taleo, Intuit, Sulabh, Netflix and many more that are not so well known, but each silently changing their industries and business fortunes.

Innovators & outliers have something more than eyes and ears.

They possess insight. They use their ears efficiently, close to the ground, to hear the future coming. Their minds are ever-curious.

You or your business might have tons and tons of big data and have machines scraping them to throw information at you or make power-point presentations fat. But at the end of it, they might just be keeping your business blind or drowned with information. What good is information if not transformed into potential creations and actionable insights?

The outliers and innovators are different. Though they read the same information, get the same news, look at the same stacks of data. They do something more. Outliers possess the ability to see behind the data and derive an insight. It could be an unaddressed market, a growing set of dissatisfied customers, a recombination opportunity, or a strong emerging consumer undercurrent that can power up brand new markets.

The biggest strength of innovators and outliers is curiosity, a thick skin (needed often to battle naysayers) and a habitual irreverence for the normal.

Let's consider an example. Uber was an opportunity built on the emerging need for mobility on demand, access to mapping technology, the pains of findability and congested roads that make self-driving unpleasant. It is not as if everyone else didn't have these information, data and trends around them. Someone saw the story behind the data. The founders of Uber simply recognized and joined the dots. And acted on their idea and artefact to build an everyday brand.

How to join the dots and find innovations in hiding?

Why is innovation then not more mainstream?

Being an outlier takes risk and a willingness to court rejection. Fear is the biggest handicap for innovation. And sometimes it is misconceptions that drive this fear.

Fear of asking the “dumb” questions. Fear of questioning the established. Fear of experimentation. Fear of uncertainty. Fear of the unknown. Fear of the strange looks you would get from the status-quoists as if a feral child entered the board room. All of these, hijack and freeze up an appetite for innovation and change.

At times it could be the mistaken belief that an innovation has to be an earth-shattering breakthrough solution that has to be sputtered out by the Chief Innovation Officer or only by someone with a C in the designation. And that, anything and anyone less would be shameful. This only creates herds and droids with no mind or initiative of their own.

Ideas and innovation in fact bear no designations or badges. They can come from any source and be designed into amazing products and services. The danger with fear is that everyone stops innovating or even thinking of breaking from the herd. Herd mentality hurts.

Innovation is also not always about the big disruptive ones. Nothing can be further from the truth. Innovation is 99% of the time incremental improvements (look at the Japanese Kaizen practice) or adjacent betterments (adjacent innovation occurs in thematically proximate or related areas, say related products, services or markets). A small fraction, of course, tends to be radical and breakthrough innovations.

All of these, the entire spectrum of innovations - micro, small and large - change industries and business for the better. Incremental efforts create magic in two ways - (1) they sum up over time, compound in momentum to become large and (2) they cultivate an innovation habit in you. ?

Agile startups are quicker from the block. Why?

Our line of work in Venture Design & Development exposes us to a spectrum of clients and business. It includes a diverse basket - large, mature corporations, mid-sized companies with big ambitions, Government & impact sector, and agile startups or micro firms which are scrappy, hungry and nimble with their product and market moves. The agile ones are the firms that end up changing the status quo in an entrepreneurial world as they are brave with their ideas. They have a zeal to execute and can pitch their disruptions to fetch capital that is accessible from investors.

In the case of larger companies, it is slower or many a time absent. Often size and layers in an organization results in inertia.

Every object (or entity) will remain at rest or in uniform motion in a straight line unless compelled to change its state by the action of an external force. - Newton's First Law

Sometimes the love for the comfortable and warm status quo kills innovation. Or it could be that the perceived risks associated with disruptive change are misplaced. There are also cases when businesses and boards want to adopt outlier practices and creative disruptions, but do not know how to begin. Having innovation ambassadors within the organization becomes critical, as it helps to have folks who have the grit and appetite for bold and brave ideas. Often times the independent board members could take on this role for the organizations they coach. Or a VC could take this role for the companies they are invested in. Or someone within has got to rise up, to dare the normal. Roles must be taken and not necessarily always given.

It is ironical that in-spite of having capital, solid P&L reserves, well-paid talents at their disposal, marketing muscle and wide distribution, bigger organizations are fearful of the new and disruptive.

Agile startups on the other hand are designed, incentivized and geared to challenge and break the normal. They possess the upper hand of both initiative as also a "nothing to lose" appetite. Having fewer layers in the organization, rapid decision-making, lesser bureaucracy and an irreverence for the status quo helps in agile thinking, experimentation and rapid product development.

Often for large companies the need to manage day to day business and competitive pressures, over-rides the need to experiment for an uncertain future of unknown size. And this becomes the Achilles heel for larger corporations and businesses. For the answer to competitive pressure and growth challenges is innovation and creative disruption.

One then has to figure out ways to beat this syndrome.

How can large and mid-sized companies cultivate innovation and be agile like startups?

To change the climate of innovation inside your company/organization or to help your associates turn more entrepreneurial, an outside-in approach helps greatly. The advantage is that it does not disturb the equilibrium of your day to day business and affairs. It keeps the model lean and efficient without too many overheads. It also has a low hurdle to initiate.

Large, traditional organizations to survive and thrive in today's era where agility matters would do well to cultivate an innovation mindset and habit. There are many ways through which they can be agile and productive as the leaner and smaller startups.

1. Rewiring the DNA - Mindset training and fostering a culture of innovation helps immensely. Changing the mindset through design thinking, collaboration, ideation sprints, venture workshops, speculative lab design or cohorts with creative makers to solve interesting organizational problems help. The options available to train and strengthen the innovation DNA of your company are numerous.
2. Corporate Venture Development - new venture development and co-creation with venture design teams can be a smarter and faster way to carve newer roads to growth and profitability for your organization. As also to out-think challengers. Today for large corporate houses, and businesses, agility is the most valuable currency. If as a business you are not imagining and acting upon threats to your markets/future yourself, then someone else will be conceiving new models, products & services that will simply disrupt you out of the market. Hence investing in building your own pool of startups, small market experiments and prototypes helps. Consider Corporate Venture Development as lab created ventures and innovations. This can be actioned and managed with the help of Venture Design Labs and Studios.
3. Creating Innovation Labs - Whenever in doubt, lab it up. Today an uncertain and unknown climate of business begs for rapid, agile experiments and tests. Entrepreneurial venture design partners can be of great help in helping your organization or business with setting up innovation labs or a design thinking capability. This can be a lean and agile format of not only cultivating internal pools of problem-solvers and creative disruptors but also help your business design and create products & services of the future. It simply can make you agile with thinking and doing.
4. Speculative Design - This practice dwells on future-backwards thinking and creating conceptual, speculative designs. This method and practice can be a great source of innovative ideas for an organization and help develop rapid prototypes to test amongst your markets and customers. With venture design and interdisciplinary teams these could be literally like your exploratory space missions and a very cost-efficient way to build near-real products and scenarios without much risk. Your small step with speculative design as a business leader could be a giant leap for your business.
5. Hackathons - The absence of an innovation culture is a sticky problem. This means that access to inventive ideas, new business models, product and service innovations are left to either fate or chance. A more pro-active approach helps. Exploring new formats like design-hackathons, idea-hackathons could be a wonderful way to access untemplated minds and true outside-in thinking.

Explore how innovation hackathon works

You are wired different. Period. But then you can be re-wired.

Creative disruptors are wired differently. And this wiring is a function of many things – inherent DNA, experience, real time exposure, love for collaboration, practice and mindset. Changing a business's DNA and cultivating an innovation culture would surprise you with the number of productive ideas, concepts and hacks that can be generated. It can make your business entrepreneurial. And sometimes create moonshot ventures.

The best way to access a better future is to design for it. And to design for it we would need to break with the status quo mentality today. Your small step as a business leader or a maker would go long miles.

The lab approach - tinker, tailor, soldier, try

?"It is not enough to stare up the steps – we must step up the stairs.” (Dr. Vance Havner)