Kathy Gibson at Saphila 2014 – Anyone can create innovative ideas and make them happen. This is the word from Frans Johansson, author of The Click Moment, who says that life taught him that when he was able to combine concepts from different areas, he was able to break new ground.
He says people have more chance of coming up with ground breaking innovation when different concepts are combined.
“Used to be that if your company made it on to the S&P 500 it would stay there for 20 years. Today the average is five years, and there are new companies coming up every day.”
But why is it so difficult for us to innovate, to come up with brilliant strategies, he asks.
The problem is that it isn’t so easy to understand what a brilliant strategy is.
Johansson tells the story of Microsoft. It was a very successful software company in the 1980s; but become a massive behemoth in the 1990s. Windows changed the game for Microsoft; let them build a platform and applications – and then they built on that.
“In the 1980s there were just three people working on Windows – they were going to shut it down,” he says. “At this stage, Microsoft was collaborating with IBM on the development of OS/2.”
Then one of the developers came across a debugging system that would fix the problem that was preventing Windows from accessing more than just a small amount of memory.
Following that, Microsoft grew on Windows, side-lining OS/2.
“The click moment was when the developer met his friend with a good debugger,” Johansson says.
Part of the reason we fail to innovate is that people use logic in trying to reach success – but everyone has access to logic. What happens is that competitors start to look exactly like one another; they will all end up in the same place, the logical place.
“We believe the true differentiator is about how good we are at something – our expertise,” Johansson adds. Lots of practice will lead to success. But it’s not the only way to be successful.
“How many hours of practice do you think Elon Musk had in car manufacturing before he formed Tesla?” he asks.
So the rule of practicing doesn’t seem to work for business – because the rules in business don’t stay the same.
He cites the example of Nokia, which was the cellular phone leader. “They knew the world of the mobile world cold,” says Johansson. “They were about colours, ring tones and shape.”
When the rules changed, Nokia failed to keep up. Today, mobile phones are all about apps and the other things are no longer important.
Johansson points out that people were sceptical when the iPhone first launched, with most analysts predicting that it would fail. Even the experts failed to predict what the next move would be.
“The unexpected is what makes us stand apart, what allows us to escape the logic trap.”
YouTube, for instance, started off as a dating site. “That was an awful idea,” Johansson says. The founders moved into the uploading and sharing of videos almost by serendipity, and then sold to Google 18 months later.
“Those things you take for granted today will be put under huge pressure in the future – by unknown entities.”
For instance, the cloud is tipped to be big; and it could spur interest in the BitTorrent protocol which lets you store data in many different places.
Does this mean the strategy and planning is completely useless? Johansson says sometimes randomness if the best move – although this is difficult to position in a business environment.
“Because as human beings we need purpose in our loves; we need intent in our actions; we need some sort of rationale in what we do.”
This could be from a structured source; or it could be from a gut instinct; or we just want to follow someone we respect, he says.
“The purpose of strategy is not to figure out the right answer. It is to convince yourself to act. You have to get something on the page, move in some direction.
“We need to feel we know what we are doing while still introducing the unexpected into our actions.”
But to do this, we need to understand what innovation is. “Diversity drives innovation,” says Johansson. It is at the intersection of different interests where innovation happens.
The reason diversity is so powerful, he adds, is that all new ideas are really combinations of existing ideas.
“But not all idea combinations are created equal. Some ideas are better than others – and many ideas have been done before.
“And the truth is that almost all innovative ideas appear obvious after the fact.”
How can companies use this to their advantage?
“Find inspiration from industries and cultures other than your own. Take your own wisdom and connect with something from another field or culture.”
Johansson points out that we sometimes think innovation means we have to be the best at what we do. “But only one can be number one. But if you take your assets and connect with something else, and are successful, you will have created something new.”
It’s easy to be inspired by people different to yourself if you are surrounded by people different to yourself, and this is where companies need to think about staffing for innovation.
Once a company has come up with ideas, it’s important to implement them. “And it all comes down to execution. Once you have a great idea you have to make it happen.”
Failure is an important part of innovation, Johansson says. “You are going to make mistakes because you can’t predict what’s going to work.”
Teams typically come up with a massive goal, but along the way they use up all their resources – money and reputation, but also the fact that some of their assumptions are not necessarily true. Sometimes it becomes apparent that a different goal is where you should be aiming.
There is no fairy tale storyline, Johansson says. Almost every ground-breaking idea has false starts and will go through several iterations before it becomes successful.
“The smallest executable step is your smallest innovative idea, that you can take; and that will help you understand what will work. It will allow you to escape the logic trap and be innovative.”
This could take many steps, but the innovator needs to take the first step and then be prepared to change.
“Execution of innovative ideas means you have to cognisant, 100% aware of the fact that it is not going to work – because if it did anyone could do it.”
Importantly, Johansson says you can’t rely on return on investment (ROI) when deciding to continue to innovate and change.
For instance, Google’s founders tried to sell the service to Yahoo for $1-million – and were turned down because Yahoo couldn’t see the potential ROI.
“Pay attention to anything that surprises you – it means something has happened that you didn’t expect,” Johansson says. “Often people brush the surprise away. But these are the events we should be focusing on.
“Use diversity at all times to find unexpected connections.”
