Without entrepreneurship there can be no innovation

This interview was first published on www.innoboard.de.

There is no consistent definition of innovation. Every industry and every department perceives it differently. How do you define innovation? 

I define innovation as “new market value”. There is sometimes confusion around the difference between “invention” and “innovation”. While an “invention” is an idea that may be expressed as a patent, blueprint or prototype, it does not become an innovation until that invention provides some form of customer value that is new within that particular market.

That’s the basic definition of innovation. But innovation is much broader than that. It’s useful to define what type of innovation we are discussing. Is it product innovation that we are aiming for or are we taking a broader perspective looking for business model innovation? Are we content with incremental innovation or should we also invest into potentially disruptive or transformative innovations?

There are a number of frameworks that help us to guide our discussions regarding what type of innovation we are talking about and how to find a balance between them. For example the three horizons framework by McKinsey, the 10 types of innovation framework by Doblin or core-adjacent-transformational innovation by Naghi and Tuff.

Although there are many more frameworks like these, the key is to understand the underlying principles of innovation and then choose the tool that works best for the moment. Using several tools can provide slightly different perspectives, which may be helpful in the early stages. Sometimes we like to design our own variations or mashups of existing tools or create entirely new ones when we see a need for this, for example, The Customer Happiness Canvas.

How important is it to make mistakes during the innovation process? 

I would say making mistakes is integral to the innovation process. If you’re not making any mistakes you’re probably not working on anything new and untested.

Let’s say you have two innovation teams doing sprints in parallel, one team may be hitting their targets all the time – or to say it differently – they never fail, and the other team is failing about 50% of the time. Which one do you think is doing a better job?

Probably the team that’s failing 50% of the time. The other team was just lowballing their targets, setting fail criteria that they were sure they would reach. Or they weren’t trying to validate something that is risky. That’s not the way to do it. Metrics have to hurt and the point of the experiment is to learn about things you know little about but that may have a large impact on the business model that you are trying to build.

Nevertheless, the mistakes that we do make must be grounded in some form of learning. Failing without learning from our failures is not very helpful if you’re trying to build an effective innovation process. As such, it's better if we can talk about “failing smart” or “failing forward”.

Having said that, innovation teams should not be interested in learning just for the sake of learning. At the end of the day, we are trying to develop a scalable and repeatable business model. As we are searching for the holy grail of entrepreneurship we need to make sure that our learnings are related to that goal.

Why is it important to leave the comfort zone to successfully innovate? How do you challenge yourself to leave your comfort zone again and again? 

Leaving our comfort zone is directly related to learning about the unknown, which is key to innovation. If we’re not willing to venture into the “wild” or to go where no-one has gone before, we will forever be dabbling in incremental innovation, which in today’s competitive environment is not enough to stay relevant in the long-run.

“If the change on the outside is greater than the change on the inside, the end is near”. Jack Welch, former CEO of GE.

The ironic thing is that this is exactly what seems to be happening to GE right now. But let’s see, maybe they will be able to turn the ship around. I know Eric Ries has helped tremendously in launching their FastWorks program, which is essentially introducing Lean Startup mindsets and techniques to thousands of employees. It’s a massive program. The big question is what will happen to FastWorks now that Jeff Immelt has been replaced by John Flannery.

People who possess growth mindsets, a term coined by Carol Dweck, are naturally inclined to explore the unknown. That’s why it becomes imperative for companies who want to strengthen their innovation capabilities to actively search for and recruit people with growth rather than fixed mindsets.

Make it a point to accept opportunities that you find challenging, perhaps even a bit scary, to give yourself a chance to try and… yes perhaps fail.

The alternative is to play it safe and never find out what you’re truly capable of. One way to start challenging yourself is by taking small steps. Every year go someplace new, read different magazines, books, watch movies you normally wouldn’t, spend time with people you normally wouldn’t, begin to ask “why” a lot, and so on.

All in an effort to stretch your mind and allow yourself to see new opportunities. These new and diverse inputs are potential triggers for new ideas, which is the starting point of any innovation journey.

In your opinion, what role does entrepreneurship play in the context of innovation? Why is it important? 

The word entrepreneur was coined by the French economist Jean-Baptiste Say in the early 19th Century and refers to someone who is taking a risk in pursuit of profits. Entrepreneurship encompasses all the actions taken by entrepreneurs in pursuit of their vision, for example, “bootstrapping”, “ideating”, “asking why”, “experimenting”, “testing”, “searching”, “failing smart”, etc.

As such, without entrepreneurship, there can be no innovation.

What are your goals regarding innovation for the next 12 months?

My primary goal is to continue to help my clients to further strengthen their innovation capabilities. I do this by taking a holistic perspective on innovation that stretches all the way from designing measurable innovation strategies down to the nitty-gritty of how to actually do it in practice.

I employ methods such as Design Thinking, Lean Startup, and Jobs-To-Be-Done wrapped inside a battle-tested intrapreneurship program that helps leadership to identify their intrapreneurs and guides them through the journey from idea to market.

My secondary goal is to digitize, automize and scale what I do. Right now we’re looking for developers in Stockholm, Sweden to come and work with us to make this happen.

About the interviewee:

Andy Cars is the founder of the innovation strategy firm Lean Ventures and a serial entrepreneur turned advisor.

Andy works with large companies to strengthen their innovation capabilities. His focus is on innovation strategy, innovation accounting, lean startup, business modeling and creating strong connections with the startup community.

By drawing on the experience of working with hundreds of startup teams Andy provides unique insights into what it takes to successfully innovate.

Andy has also been involved in designing startup accelerator programs and advising on how to create and grow startup ecosystems both locally and internationally.