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A Consultant's View

Prairie Trail Software, Inc. ............................................................. June 2012

How to Get More Innovation?

Politicians and corporate leaders have been making the case that we need more "STEM" education and innovation ("STEM" meaning Science, Technology, Engineering, and Mathematics). Yet, only 4% of current technical innovation makes it to the market and even less is successful there. That really doesn't sound like we need more "STEM" innovation.

Instead, the real need is business innovation. eBay was not a technical innovation, but a business innovation. Dell Computers was not a technical innovation, but a business innovation.

So, how do we get more business innovation?

In order to have business innovation, we need a climate of acceptance of new business ideas. When we look around the country, we can see that certain areas are far more accepting of new business ideas than other areas. More importantly, there are certain companies that are getting a reputation for innovation.

Two companies stand out in the breadth of innovation that happens in them. Both 3M and Google support employees taking significant amounts of time for personal projects and support those projects becoming new business lines. A large number of new product lines at each company have come from those personal projects ranging from Post-It-Notes at 3M to Gmail at Google.

Many companies have tried to emulate this but very few have had good results. There is a big difference between "pet projects" being permitted and them being encouraged. For example, the joke is that many other companies have the equivalent of Google's 20% time; they call it "Saturday". A number of companies have had research labs and some have hired people to be "research fellows". Yet, while these labs have generated research papers, rarely have they generated new business lines.

Microsoft is working to have a different model than just handing out 20% time. Currently, they are using a "Science Fair" model connected to a "garage". The first part is the "garage" which is an area that anyone can come in with an idea and get help figuring out how to make that idea happen. People go in there on their own time. An idea needs to be strong enough to attract people to donate their time to it. Then, by having a date to show everyone, there is a hard time line on the efforts. By using a "Science Fair" format, everyone gets to see the idea and judge if it has a market and merits further investigation and actual investment by the company. Quite a number of these projects have been included in official products.

One problem with most corporate attempts at innovation is that they often put the bar too high. Managers want to purchase a fully developed and market proven concept. However, innovation often starts with just a yearning for something. It takes time, investment, and commitment in people to get innovation.