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Einstein had his E=MC2. What’s your formula for innovation?

I recently gave a presentation on innovation to an east coast utility executive team, known for being leaders in innovation. What could I offer this team that was fresh, insightful, and would make a difference with their next gen innovation programs? I turned to the historic figure I’d most like to sit down to dinner, Albert Einstein, for inspiration…

Einstein was famous for many things, and chief among them, his formula E=MC2, part of his theory of special relativity. He postulated years ago and physicists since have proven through precise experiments the relationship between energy and mass. Of course we now understand the immense amount of energy that can be released from certain elements when organized in a certain way and it was the leverage implicit in Einstein’s famous formula that inspired me to stand on his shoulders and create a simple and compelling formula for innovation.

Now, please know, I’m no Einstein (as my wife and adult children remind me constantly of this fact despite my academic degrees and life experience)! Still, after years of leading successful business and technology programs for IBM, Boeing, Wall Data, and now Capgemini Consulting and our clients, I have developed a few insights on how to combine certain elements in innovative ways to accelerate business outcomes.

So after much reflection and distillation, I finally wrote down and then shared with the east coast utility and now with you, the following formula for innovation: B = LIMC2.

Similar to the “E” for Energy in Einstein’s formula is “B” which stands for Business (Accelerated Business Outcomes). Every CTO and CIO I speak with is interested in new ideas to assist their C-Suite colleagues and their entire company in accelerating business outcomes, be it shareholder value, top line revenue, operational efficiency, customer satisfaction, or the myriad other Key Performance Indicators (KPI’s) that the business world measures.

And similar to the “M” for Mass and “C” for the Speed of Light, which are the critical elements in releasing energy, my formula for innovation, too, has its critical elements to accelerate business outcomes. Next, I’ll briefly define these critical elements.

“L” is for Leadership

Over the years, I’ve seen many innovative ideas bubble up from individual contributors, middle managers, even customers and suppliers. I was one of those young, ambitious, “wanting to change the world” employees at IBM who came up with an idea to unbundle our technical Systems Engineering training from the sale of hardware and software to unlock its value and create a new services business. It was leadership at the Branch and Regional level who created the environment for that idea to flourish. I needed permission to interview people and create the business case during work hours. I needed management support to develop and pilot my first Systems Engineer Instructor training program that I had developed on nights and weekends while teaching for IBM and applying what I learned during my M.Ed. at the University of Washington. And it was leadership of Gifford Pinchot, through his book, Intrapreneurship, that I read and was so inspired to apply to my fledgling venture inside the behemoth IBM. Leadership matters and so I’ve placed it in the first position of my formula for innovation.

“I” is for Ideas

Ah….ideas. The stuff from which new products and services are created, great businesses are made, inspiring art and music are created, and revolutions are born.
“Nothing is more powerful than an idea whose time has come.” Victor Hugo

We all have them…many of us have thousands of ideas a day. Serial entrepreneurs create more than one company, because they have so many ideas to address “pain in the market”. The challenge is how to filter the “signal from the noise”? How do you pick the best idea to solve a “burning platform” issue or capitalize on a compelling future opportunity based on the available information about any one idea relative to all the other possible ideas you could select to solve the problem or seize the opportunity? More on that subject in a later blog posting. So ideas also matter, but an idea whose time has come really matters and so deserves the second position in my formula for innovation.

“M” is for Momentum

Remember the phrase “a body in motion stays in motion?” If you were raised by an Aeronautical Engineering father and a Pure Math and Physics mother as I was, then you probably heard this phrase a lot when you were a teenager wanting to sleep in until noon on Saturday after Friday’s High School dance. Homework and chores were not going to be completed by a motionless body. Parents, like Sir Isaac Newton, know that once you get a body moving you are likely to keep it moving. Similarly, with innovation, you need to get an idea moving and keep it moving despite obstacles of resources, budget, and the important “corporate immune system” that tries to keep foreign bodies er ideas from being born and moving forward. Again, I’ll pick this topic up again in more detail in a later blog. So leadership, an idea whose time has come and enough momentum to keep that great idea moving forward despite obstacles all matter. And yet…they are not sufficient without the biggest lever of all, culture.

“C” is for Culture

Culture is a way of thinking, behaving or working in a place (a state or country) or organization (a business). In a business setting, the culture is often so ingrained in the organization that those inside it often conform to the mind sets, the beliefs, and norms without question. In my work with clients, I see four levels of innovative cultures:

  1. When the dominant culture is supportive of developing and implementing new ideas to help the organization work better with customers, employees, and partners to create continuous improvement, then an organization is at the first level of an innovative culture. Continuous improvement initiatives such as Total Quality Management, Six Sigma, and Kaizen are now merely “table stakes” for organizations to remain competitive in most industries.
  2. The next level of an innovative culture is “market matching”, which means the organization is continuously looking at its peer group for leading edge thinking and innovative ideas and implementing what works for its industry leaders. Most companies fall into this level of an innovative culture and it generally supports the creation of solid business outcomes…except when it doesn’t.
  3. The next level of an innovative culture is “transformational”. What I mean by “except when it doesn’t” relates to what has been happening the last few years in hyper competitive, global industries like financial services, retail, consumer products, and technology. Organizations in these and other industries have been experimenting for years and are now implementing disruptive technologies such as SMAC (Social, Mobile, Analytics, and Cloud). Organizations in these competitive industries who merely “market match” will likely not remain as successful as their competitors, such as Burberry, Disney, Whataburger, and others who continuously seek out and leverage digital technology to accelerate their business outcomes and create sustainable competitive advantage. Digitally innovative companies like Google and GE are crossing over to other industries. Ubiquitous e-tailers such as Amazon and Apple are making their customer experiences more connected, frictionless, and personalized, and resetting our expectations about what a great customer experience is. Together these competitive forces are prompting organizations in conservative industries such as manufacturing, energy, and utilities to become more digitally innovative or risk becoming irrelevant.
  4. The fourth and final level of an innovative culture is “paradigm shifting”. In research done by MIT and Capgemini Consulting and written up in articles and in a best-selling book, Leading Digital, companies such as Amazon, Apple, Burberry, Codelco, Google, Starbucks, and others who balance the dimensions of digital capability and leadership capability have become digital masters and, as a group, enjoy 26% higher profitability, 9% higher revenue efficiency, and 12% higher market valuations.

So culture really matters, which is why I’ve “squared it” in my formula for innovation.

Based on my experience in accelerating business outcomes at IBM, Boeing, Wall Data, and Capgemini and its clients, I believe that the formula B=LIMC2 points the way to creating an innovation engine for any organization.

In future blogs, I intend to dive deeper into the topics of innovative leadership, ideas, momentum, and culture and share more stories about works and doesn’t work to accelerate business outcomes through applied digital innovation.

As I seek to create a community that cares about delivering sustainable results for organizations in a disruptive world, I look forward to your comments, constructive criticisms, and stories.