Even the best ideas can fail if customers don’t understand the value.

Creating innovative products that disrupt an industry is tricky business. Companies that are too risk averse never achieve more than incremental innovations that only deliver a slightly better version of what they already had. But if a company is too ambitious — or their innovation doesn’t align with business needs — they risk creating a product that is so unusual, customers don’t know what to do with it.

Before Its Time

Fifteen years ago I worked with a consumer packaged goods manufacturer that made lids and closures for various products. The company’s product engineers had a brilliant idea to use the heart’s mitral valve (that lets blood flow from one chamber of the heart to another) as a model for bottle closures that created a seal which could pull liquid back into the bottle when it closed. The design prevented sauces from gumming up the cap, and meant the bottles could be stored upside down without making a mess.

It’s a problem that most consumers can relate to, but this company didn’t market to consumers. Their customer base were all B2B product manufacturers, who didn’t recognize what a truly innovative solution it was.

It had not yet occurred to them to label their products for inverted storage, and because their customers never complained about the inability to store products upside down, they didn’t see the value. The solution was just too foreign to capture their interest.

Despite the fact that it was a genius idea — and did eventually revolutionize product seals — the closure company was forced to backtrack and create a series of dumbed down versions of this design that offered incrementally better seals, eventually creating a path to the inverted seal closures that we know today.

The lesson from this story is that business leaders can’t just say “we need to be innovative” and wait for disruption to happen. They have to define how much innovation they can tolerate, and to be sure their project teams are targeting the right customers and the right problems to solve. In the case of this packaging company, they created a great solution for problem and customer base that didn’t exist.

Everyone is on The Innovation Spectrum

To find the right balance of innovation, companies first need to understand how innovative they really want to be, and what changes they are willing to make to get there. All innovation happens on a spectrum. At one end are the incremental innovations that make slight improvements to existing products, and is the price of doing business in most industries. These innovations require little change and can often be done rapidly.

In the middle are additive innovations that substantially enhance existing products to enrich the user experience. Additive innovations are where we apply technology or a step change in process in order to deliver more value to the same audience/user group (usually at a lower cost or with a higher margin). Think of it in terms of a new year model release for a car going from 2018 to 2019 or a new version of software going from Version 1.0 to 2.0. These innovations require a shift in how ideas are vetted, and the types of projects that get funding and support.

And at the other end are disruptive innovations that transform a product category (or even markets and industries) entirely, and require radical changes to the product development process, funding strategies, and supply chain and sales processes. These innovations can be transformative, but they only work if executives are willing to change the way they do business.

Are You Really Ready for This Much Change?

The further companies move along the spectrum, the more change is needed, and the more time, money and resources may be required. For companies that aren’t inherently innovative, getting to the far end of the spectrum can be painful. They will have to give up things, behaviors, processes, or even products and services, in order to gain the benefit of the new.

It requires them to break apart ingrained habits to make room for new ways of doing things. For example, many companies require project teams to submit a business plan for every new product idea with projected sales based on trends in the existing market. If you are trying to create something that has never been done before, that data won’t exist. Unless you tear down that step in the process, innovative ideas will get nixed at the starting gate.

This is just one of many changes that companies need to make to be truly innovative — and that kind of change makes a lot of people uncomfortable and uncertain. Before making any proclamations about the need for innovations, companies leaders must be invested in change and have the will to make it work.

Three-Tens

Before you decide to transform your organization through an innovation mandate, determine whether you meet the rule of “three-tens.” The idea behind the rule is that in order to achieve the change necessary for disruptive innovation, organization leaders must be willing to take each of the three steps below. As you can see the commitment to act at each level becomes exponentially lower when:

• 1 in 10 senior leaders must agree that the company needs to be more innovative

• 1 in 10 of that group proves their commitment to becoming more innovative by supporting an innovation workshop, seminar or other event that exposes the company to innovative thinking, we’re talking one in a hundred

• 1 in 10 of that group has to publicly acknowledge that the only way the company can be disruptive is if through a major culture change, now we’re working with one in a thousand.

A recognition of the need to act. A commitment to make innovation a valued part of the the organization. And a focus on prioritizing resources to tackle the status quo. All three are vital to your long term innovation success. Whether you have 300 leaders or 3,000, the rule of three-tens applies. If you can honestly say you meet these three criteria you are ready to become an innovative company.

Drew Marshall, Founder and Principal at Primed Consulting, LLC. Drew helps clients’ leadership, innovation, design, product development, and program management teams frame and respond to challenges so they can deliver value to their customers as quickly as possible. With a Bachelor of Arts degree and a Graduate Diploma of Education from the University of Western Sydney in Sydney Australia, and a Master of Arts in Whole Systems Design from Antioch University in Seattle, Washington, Drew is also a certified Project Management Professional. He was the past Chair of the PMI Consulting SIG and has presented widely on project management, human resources management, and innovation issues. He is also a master facilitator and associate consultant with ExperiencePoint.