THE TRUTH

ABOUT

INNOVATION

MAX McKEOWN

“Find thecreativity inside”

Innovation rocks. Itrolls. Itmakesthe world go round. Ourlifestylesare the resultofother people’seffortsto improvethe human condition. Theymixed ideasand inventionstogether. Theyworked hard to create the must-have and often takenfor granted stuffthatsurroundsus.

You have evolution to thankfor your opposable thumbsand adorable bellybutton.And for your amazing brain, with more connectionsthan starsin the galaxy, thathasallowed millionsand now billionsofusto examine our world and seekto make itbetter. Thatisinnovation and itmatters.Our century’sgreatestinnovation willbe the method ofinnovation. We are beginningto understand how to increase our abilityto improve together. We are learning howto move from individualinvention to group innovation.Thisbooksharessome ofwhatwe have learned aboutinnovation, whatitis, how ithappens, and how itcan be increased. New insightsinto how our brainsworkcollectivelyprovide uswith the opportunityto create the equivalentofa bigger brain,capable ofdreaming and working together to make those dreamsreality.Everyone can help. Everykind ofintelligence and personalityplaysa part.Our need for innovation hasshifted power closer to the source ofthatpower ? Us. We are the future.

I N T R O D U C T I O N

You’ve seen the big picture, haven’tyou? The typicalbig companywantsbig products. Theywantbig ideas. Ifthey’re big shotswith big ballsthentheyplace big betson a big future. No one wantsthe smallproject. Or tobe the smallprojectmanager. Who wantsto do that?

Problem with the big betapproach isthatyou are limited to a smallnumber ofguesses. You are forced to choose too early. Judging win-nersand losersbefore the race begins. Putting allyour eggsin onebig basket. Or worse – putting allyour faith in one egg.Mostofusacceptthe common sense notion thatriskshould bespread. For some reason itishard for mostcompaniesto spread thatriskbysharing outthe ‘riskdollars’ between manysmallprojects.Some leadersseem to find iteasier to betbig on their own hunchesthan to beton their people.A few yearsago, Whirlpooldecided to make a big beton innovationbymaking hundredsoflittle bets. Instead ofinvesting halfa milliondollarseach on a few ideastheylearned how to take smaller calcu-lated risks. The choice wasno longer allor nothing. Itwas20 milliondollarsin 400 bite-size chunksof$25,000. Enough moneyto testideas, engage smallteamsofpeople and do enough learning toinform future funding decisions. The little betsnow bring in $1 billiona year.Betting big hasother, lessobvious, disadvantages:Mostofthe time, a big projectdevelopsa life ofitsown. No-onewantsto take the decision to write-offallthe moneywasted so far soitbecomesa zombie project- using up resourcesyearsafter itisunnecessaryor unwanted.Often bythe time a big projectiscompleted the advantagesofstarting itare no longer relevant. Competitor productshave overtaken the originalobjectivesso thateven ifthe big projectsucceedsitwillfail.Bizarrely, a big projectislesslikelyto have rigorouscriteria for investmentthan a smallproject. A big bossdoesnothave to justifyhisbig decisions. And, a big decision islessclearlydefined than a smalldecisionbecause there issimplymore ofitto define.Betting smallhelpsin a number ofways:The safestinvestmentsare those thatstartto payoffsoonest. Even better are those thatinform the nextroundofinvestmentdecisions. A smallprojectmaydevelop into a big projecthaving contributed to the successof the company.The smallbetallowsmore people to contribute. Itengagestheir talentsand goodwill. Itencouragesthem toexperimentwith comfortable levelsofresponsibility.Notallideasrequire huge amountsoffunding to take to market, or benefitfrom a large amountofmoneyinthe earlystagesofdevelopment. Theycan be ruined bythe weightofexpectation, and the rush to justifyexpenditure.Toyota believesin betting smallto win big. In one year, itsemployeessuggested over 750,000 ideasfor improvement. The companythen implemented over 80 percent! In isolation, mostsuggestionswere smallandincremental. The totalimpactofquarter ofa million improvementsisto strengthen their culture ofinnovation- getting better isa habitgained through repetition.Sony’ssuccesswith the Walkman showed another side ofbetting smallto win big. Itdid notknow which com-bination offeatureswould mostappealto customersso itdeveloped over two hundred differentmodelseach