Innovation interview: Michael Schrage

This week’s innovation guest blogger is Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business and Harvard Business Review blogger. He is the author of “Serious Play” and the forthcoming “Getting Beyond Ideas: The Future of Rapid Innovation.”

1. Companies launching an innovation platform for the first time often turn immediately to their employees. But you put a lot of weight on customers’ role in innovation, and you’ve written, “Just as you don’t have a performance without an audience, you can’t have innovation without customers.” What is in the DNA of the “best” customer when talking about innovation, and how can a company cultivate these customers?

For the record, I don’t like the “DNA” metaphor much for this because I’d observe that innovation is more a cultural and social value than an “inherent” or “intrinsic” trait.

For most firms, you correctly observe that I put a lot of “weight” on the customer/client side of the equation. Indeed, my view is that innovative firms require innovative customers – no matter how innovative you, your company, your employees and your offerings may be, if your customers and clients aren't open to innovation and the disruptions it may bring, it’s all for naught.

Before looking out for innovative customers, you have to look inside yourself and ask:

  • What does innovation mean in your organization?
  • Innovation is a means to what end?
  • Is innovation a spice, an ingredient or the whole meal when it comes to the value propositions you bring to the market?
  • Instead of asking, “What is our brand?” ask, “What is our innovation brand?”
  • What’s unique to the way you perceive, create and present innovation?
  • When you present or discuss your innovation efforts, who responds? Why? How?

It is in the nature of the responses – and non-responses – that you find not the “best” customers but the ones who are most appropriate and compatible with your style, substance and brand of innovation. How do you learn from these organizations? How do you leverage what you learn in your efforts to enhance and iteratively improve your innovations? Cultivation matters less than collaboration.

2. What are the most common “best practice” innovation clichés? Can they be avoided, and should they be?

The two clichés I beg people to avoid like the cognitive plagues they are:

Good ideas are key to good innovation.

Good ideas are the enemies of innovation, not their enablers. Good Ideas are bad. Innovation isn’t about analysis; it’s about interaction.

The other cliché that should be rubbed out is “Listening to one’s customers.” Of course you should “listen” but what people do always matters more than what people say. Unfortunately, many MBAs – particularly the ones from Harvard – tend to forget that.

3. What is your definition of breakthrough innovation, and how does it differ from one-off, incremental innovation? Is one more valuable than the other for an organization?

It’s a false dichotomy. Breakthroughs  –  like incrementalism  –  are in the mind and eyes of the beholder. People over the age of 50 find texting and Facebook to be breakthroughs. Adolescents take them for granted. These are issues of segmentation and differentiation, not innovation.

4. In “Serious Play,” you explore business’ ability to plunge into uncertainty and come out of it with improved innovation, provided that they can align that improvement with multiple audiences and keep it cost effective. The cost-effective part is key, so where and how do companies draw that line between exploration and wasted resources?

There is a simple Economics 101 answer to that question: When the company finds itself hitting “diminishing returns” on its iterative innovation efforts. That is, when the costs and complexities of producing improvements and enhancements generate ennui and annoyance from customers instead of energy and excitement.

5. Where do you see businesses deriving value from the Web 2.0 and 3.0 landscapes in 2011 and beyond?

There are multiple multimedia answers to that question, but I’ll offer one genre where innovation has just scratched the cloudy surface: Recommendation engines. We will see an order of magnitude improvement in specificity, sensitivity and creativity from Netflix/Amazon-type recommendation engines in the E-commerce and “social graph” environments.

Want to read more perspectives from other innovation experts? Visit the "Guest Blogger Series" category at right.

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