TEN BIGGEST MISTAKES I SEE MY CLIENTS MAKING* 03. TOO MUCH LOVE FOR ALL THINGS SHINY.

“Management knows it and so does Wall Street: The year-to-year viability of a company depends on its ability to innovate.” (Nagji and Tuff, Harvard Business Review, 2012).

Who doesn’t love a bit of innovation, eh? A new idea? A new project? A new market? (I see you: entrepreneurs, yellow visionaries, and PR-peeps.)

Innovation – big and small, is necessary. Just ask Blockbuster and The Yellow Pages. But an ad-hoc-love-for-all-things-shiny approach can result in loss of momentum, lost revenue, product (and even, brand) proliferation and/or cannibalisation, and resentful teams.

TL:DR: Innovation – good. Innovation at expense of core business -  bad. Proper innovation strategy – good. Sporadic, distracting change – bad. New ideas – good. Addiction to new, shiny grenades – bad.

The best way I’ve been able to explain how to make good innovation, is by leaning on Nagji and Tuff’s research, published in HBR. They discovered that companies who had outperformed the S&P500, had leaders who shared the following pattern of innovation investment:

 Some examples:

• CORE: method now selling clever little concentrates

• ADJACENT (think remix: existing product, new audience; existing audience, new product): AWS, Uber Eats, Airbnb Experiences

• TRANSFORMATIONAL (i.e., the headline makers): Spotify, Bitcoin, iPhone, Netflix, Uber…  

Some caveats:

1.  Different industry: people like new tech, so tech brands need to up the ADJACENT and TRANSFORMATIONAL. Conversely, in FMCG, the win is in increment innovation: CORE and ADJACENT.

2.  Different competitive positioning: if you feel you are dying a slow death, a high-risk TRANSFORMATIONAL innovation may offer the disruption you’re looking for. If you cruising on first-mover advantage, CORE is your friend.

3.   Different development stage: early-stage enterprises need to make more noise to be noticed.

4. It’s (very) hard to be good at all three, especially transformational: mature companies attempting to enter new businesses fail 99% of the time. Don’t beat yourself up if you’re just trying to make CORE work - but don’t drop ADJACENT if you can help it.

5.  Recruiting the right talent. The skills needed for each are different. TRANSFORMATIONAL are more conceptual: social needs, customer perspectives, underlying market trends, and technological developments. Think: cultural anthropologists, designers, and strategists (cough).

6. To integrate, or not to integrate: short answer, do not build an innovation silo.

7. Investment: Have a separate innovation fund that sits outside of team budget allocations.

8. Measuring ROI: traditional financial metrics are standard. Also consider: team/culture benefits, complimentary product sales, and brand salience and awareness.

Finally, be an INNOVATION ATHLETE: Align innovation with core goals. Take that innovation and apply a marketing lens. use it for press releases, social content, conversations. Show you are interested in trends, times, and change. Innovation can be external (product or pricing) or internal (people).

Hope you found this helpful. I’d love to hear your thoughts.

*A ten-part, snappy 500-word series to help identify the ten biggest mistakes I see MDs, Founders, and CEOs of SMEs making when it comes to strategic brand and marketing.