he other day, one of my colleagues asked me, “What exactly do you mean when you use the word ‘innovation?'” Answering the question led to a productive discussion about what really inhibits innovation inside large organizations.
When I use the word innovation, I think of three interlocking components:
Insight or inspiration suggesting an opportunity to do something different to create value
An idea or plan to build an offering based on that insight or inspiration
The translation of that plan into a successful business (in simple terms, commercialization)
Obviously, each of these components carries significant complexity, but more often than not, they cover the basics of innovation.
my field experience suggests that it’s this third component, not the first two, that actually blocks innovation.
Most companies are drowning in insight — although they don’t always know it. You can almost always find compelling ideas and well-developed plans.
A plan almost always changes a few times before a truly viable business emerges.
The hard part is in the doing, in taking the requisite steps to translate an idea that looks great on paper into profits. I call this the “First Mile” problem.
What’s the “First Mile” problem then? Earning the first dollar, euro, or rupee of revenue for what looks like a new business to the company. You give most companies a $50 million business and ask them to scale it, and many can do it without batting an eye. You ask them to take a good product and make it better, and they rise to the challenge. But starting something, getting through that first mile is is just punishingly difficult.
I don’t mean to diminish the importance of gathering insight, seeking inspiration, or developing compelling business plans. Good solid work in these areas is absolutely critical to innovation. But companies seeking to enjoy the fruits of innovation need to spend significantly more time working on how they will pave that First Mile of growth.