Innovation has increased during the digital age, but not success. That hasn't changed since the time of Leonardo da Vinci, says Dave Richards, whose new book explains why.
Dave Richards says that there's "a great deal of confusion about the definition of innovation". He should know: he's an internationally recognised expert on the subject, with a particular interest in the intersection of what are increasingly becoming known as the 'soft stuff' and the 'hard stuff'. Once, skills and expertise in 'soft' areas such as people, psychology and culture were the poor relations of the harder strategy, innovation and leadership. But today they form a powerful and important matrix of things that have to be got right if you want to succeed.
In his new book 'The Seven Sins of Innovation', Richards says that one of the key strategic ways of thinking about innovation that is missing "is a coherent model that more clearly relates soft and hard stuff. To do so requires much greater clarity of definitions – understanding the elements of individual and group psychology, and in particular entrepreneurship and how they relate to elements of strategy. What's needed is a framework for developing and implementing strategy. We need a model that shows how to bridge between soft and hard stuff, between entrepreneurship and innovation".
One message that takes centre stage in the book is that there are low levels of innovation and entrepreneurship across industry. But is this limited to the science and technology sector? "The preponderance of research shows innovation success, measured in terms of return on investment, is extremely elusive. There's no evidence this is any less of an issue for technological or engineering innovations, or that there's been any improvement in the digital age. The pace of innovation has increased, but not the rate of success. The limiting human factors haven't changed since the days of Leonardo da Vinci."
These limiting factors are sevenfold, providing us with the 'seven sins' of the book's title. They make pretty grim reading: pointless purpose, hopeless vision, miscommunication, disengagement, ineffectual leadership, stifled creativity and tolerance of mediocrity. If you're operating within this portfolio of corporate malaise, then your ability to innovate and your potential for successful entrepreneurship is hampered.
But the news is worse than you may think because, as Richards points out, you're only as strong as your weakest link. No matter how well you have overcome six of these factors, if you fall down on one, you're going nowhere. You can re-frame your approach to innovation, but only by creating an entrepreneurial culture powerful enough to overcome your shortcomings. In other words, changing the way you think.
A significant obstacle to innovation is that no one seems capable or articulating what it really is. Richards says that he rejects the official 'Oslo Manual' definition accepted by academics and government to measure innovation activity across countries and industries. The manual, which comes from the Organisation for Economic Co-operation and Development, is called 'The Measurement of Scientific and Technological Activities, Proposed Guidelines for Collecting and Interpreting Technological Innovation Data'.
It offers an approach to collecting and using data for industrial innovation. The reason for the author's rejection is that "this and other definitions in terms of commercialisation fail to recognise user innovation. But more importantly, miss the broader point – that innovation is about value creation, and to understand and measure value requires a lens that looks beyond money. Value is a psychological experience that may or may not be mirrored by the exchange of cash".
Richards prefers to define innovation as "the creation of net new value". He measures innovation success in terms of return on investment (value created minus the value invested, divided by the value investment). This embraces all innovation – user, governmental and charity sectors, "regardless of how the innovators commercially manifest value in specific stakeholder relationships".
Richards tells me that most of his career has been spent in technology R&D, product and business line management, focused on innovation related to the Internet. "My experience as a co-founding member of the MIT Innovation Lab is something I enjoy sharing, and the 'Seven Sins of Innovation' offers a framework that makes sense of the great successes and failures we've seen in the Internet boom, bust and echo, and in other realms of innovation."
Further case studies in the book include an examination of the birth and evolution of the Internet, the rise and fall of Nortel Networks, Oracle's corporate social responsibility initiatives, innovation culture at Google and an analysis of 3M's innovation leadership. Drawing on this material Richards is able to offer 'prescriptions' that he believes will be of benefit to any leader, manager or organisation attempting to start, improve or grow ventures.
Surely boiling down our inability to maintain a high hit-rate in the field of innovation can't be reduced to seven keywords? This seems to have a publisher's thumbprints all over it. Publishers have historically said if you can express an idea in simple numbers then their books will sell well. And so it follows that models such as this are developed more to make life easy for the publishing marketers.
Richards is keen to stress that the numerical framework comes from his understanding of the issue: "There are seven core aspects of human psychology, which directly relate to seven key elements of enterprise strategy. Entrepreneurial success depends on effective psychology, and innovation success depends on effective strategy – as well as bridging entrepreneurial psychology and organisational cultures, and enterprise strategies to drive innovation.
"I'm not attempting to offer more data, but a framework. I've struggled for years to make sense of 'the data' – my experience at the leading and sometimes bleeding edge of innovation. My book offers practical suggestions for large and small enterprises, entrepreneurs, and anyone trying to innovate."
I ask Richards what is the most important factor in getting it right. How can a corporation recalibrate the way it thinks to produce genuine innovation where once there was lack of purpose, stifled leadership and bad management? He answers with one word: "Enterprise."
'The Seven Sins of Innovation' by Dave Richards is published by Palgrave Macmillan, £22.99