Today, I’m posting an interview with Scott D. Anthony. Scott is President of Innosight, an innovation consultancy based in Watertown, Massachusetts (right near my hometown). The interview is part of Idea Sandbox’s Post2Post Virtual Book Tour.
Scott is the lead author of a new book, The Innovator’s Guide to Growth, which takes the idea of disruptive innovation (made famous by Clayton Christensen’s 1997 book The Innovator’s Dillema) and outlines the implementation/execution piece of the puzzle.
First, a little bit about the book. I’ll start of by saying that this is a must-read for anyone who’s looking to move innovation forward in their organization. The book is full of case studies and anecdotes about how great companies have made innovation a sustainable, manageable business practice. Scott, along with his co-authors, outline clear steps for how to build a program that supports disruptive innovation.
What is disruptive innovation, you ask? To put it simply, disruptive innovations are those that either create entirely new markets or that gain popularity and success among an incumbent company’s “worst” customers. The theory of disruptive innovation is based on the fact that most companies focus their innovation efforts on their best customers—those that represent the highest profit margins today. The problem with innovating for these customers is that a company’s offerings become too sophisticated and feature-intensive for the average customer, leaving a large swath of the market dissatisfied. Examples of disruptive innovation include the iPod (a simple portable digital media player) and the Intel Celeron Processor (which has “good-enough” performance for the average user at a low cost).
The theory of disruptive innovation is all fine and well, and Clayton Chritstensen has built an admirable consulting practice and academic career on it, but The Innovator’s Guide to Growth picks up where Christensen left off by focusing on how companies accomplish disruptive innovation in a managed, methodical, repeatable way.
I’ll post an audio interview with Scott along with more on the book in part two of this interview next week. In the meantime, here’s part one. We had Scott answer some of the questions from out Innovator’s Interview series to see his perspective on ideas and innovation. Enjoy.
Is there such a thing as a bad idea? There are in fact bad ideas. Ideas that if pursued would end up wasting a lot of time and money. The problem is that it isn’t always obvious that a bad idea is a bad idea. Some good ideas spring from bad ideas. Or some ideas that look like good ideas end up being bad ideas. So from my perspective it ends up being critical to have a mental model that gives you greater certainty that there’s something good in an idea and a way to figure out as quickly as possible whether you are right or not.
Where do the best ideas come from? In my experience, the best ideas come from really framing a problem precisely. If you understand the problem you are tying to solve, sometimes the answer is self evident. And the best way to understand high-potential problems to solve is to spend a lot of time in the field paying careful attention to what people say and what people do. Then the best way to come up with a novel solution is to try to step out of your normal paradigm and ask how someone outside of your industry or circumstance would solve the problem. What would Apple do? What would Procter & Gamble do? What would a doctor do? Innovation almost always comes at the intersections of disciplines, so forcing those intersections is a good thing.
How do you generate new ideas? Personally I think I am better at recognizing good ideas than generating the ideas myself. So I try to stick around smart, creative people who are perpetually problem solving so I can watch what they do and hear what they think. I also try to stay actively involved in lots of different industries so I can see how people are addressing problems from different perspectives.
Where do you go to get inspired? Not my desk, that’s for sure. I find that I get the best inspiration when I break from the routine in some way. Sometimes that’s having a seemingly rambling discussion with clients or colleagues, sometimes it is going somewhere I’ve never gone before to just see where my brain takes me.
How do you define innovation? Pretty simply: Something different that has impact. The impact portion of the statement is important, because if it doesn’t have impact it might be creative, or inventive, but I don’t view it as innovative. The word “something” is intentionally vague, because innovation can be technology, it can be a different process, a different way of communicating, a different way of financing, and so on.
How do you choose new ideas to move forward with? There are three big questions in my mind, always. First, does this fit a well-established pattern that leads me to believe there is a chance that the idea is a blockbuster? Second, have I identified the most critical assumptions and risks behind success? Third, is there a way to address those assumptions and risks without spending a huge amount of time and money? For example, a few years ago a small consulting company approached us about doing a joint client study. The potential was clear. If we could make it work it was a multi-million dollar venture. But there were clear risks as well. So we set a very clear test: we’d invite 15 people who we thought were the best prospects, and if we didn’t get more than five people to express interest, we’d stop. We got three signups, so we pulled the plug. And that was fine. Instead of investing a lot to at best break even, we were able to quickly and cheaply move on to other things.
Do you set business goals for creative ideas, or do you run with creative ideas and see what sticks? We set very clear objectives for any idea. Consistent with some of the research of our co-founder Clayton Christensen, our targets tend not to be related to early revenue. Rather, they are learning-based or profit-based targets. Sometimes we will be a bit more exploratory if we don’t have to spend much money on the exploration!
On a scale of 1-10 – 1 being low, 10 being high – what is your appetite for risk? I’d say about a 3. I don’t seek out risk. I don’t think most people seek out risk, actually. Our mission in fact is to seek out smart ways to reduce risk, or offload risk to people who are in the best position to bear that risk. One of my colleagues likes to say, “A good entrepreneur doesn’t take risks. A good entrepreneur smartly manages risk.”
What do you think makes an individual “good” at innovation? Going back to the notion that innovation often comes at the intersections, I think people who are good at innovation are good at looking at the world from different perspectives. They intentionally complicate their lives by having diverse interests that expose them to different stimuli. They constantly ask questions. There’s actually been research on the “innovator’s DNA” by Jeffrey Dyer at BYU and Hal Gregersen at INSEAD that corroborates this view.
What advice do you have for companies-both big and small-who are trying to move an innovative idea forward? Too much to put in a sentence! If I were to boil it down to two pieces of advice, I would say that innovation is a process that can be managed, and innovation simply can’t happen without dedicated resources. So companies should be strategic about their innovation objectives, be systematic about their innovation approach, and ensure they have allocated the right financial and human resources to make it happen.
What are the “barriers to innovation” for a larger organization? Are these different from the barriers facing smaller companies? There are many barriers to innovation within large organizations. One is the curse of success. That is, a large company has become a large company because it does a certain thing well. Doing something different can then end up being difficult because it goes against the “way things are done around here.” Further, large companies need ideas to be bigger to be meaningful, but many great ideas start relatively small. Large companies do often have the ability to allocate more resources to innovation, but they have to be careful that those resources don’t succumb to the “sucking sound of the core.”
What do you think is your greatest strength as an innovator? The ability to simplify and identify the one or two critical questions that matter most for an idea.
Your greatest weakness? The “bright shiny object” problem. There are so many interesting ideas out there.
If someone gave you $100 Million to run with and grow your business, what would you do with your company? I would turn it down. Too much money would take us away from our mission. I’d use a smaller investment to continue our efforts to make our tools and work processes self-administering, and do focused research in the areas where I know there are still knowledge gaps. That said, I find the most valuable research is that done alongside a client that cares enough about a problem to invest their own time and money in solving it.
Where do you see your company in the year 2020? We currently have two arms. A consulting and executive training arm, and a ventures arm. We also have a number of strategic experiments related to publishing, investing, training, and other areas. I expect in 2020 our consulting arm will be larger and more geographically diverse than today’s operations. I expect the ventures arm to be a thriving business that has created a number of booming businesses. And I expect there will be a third business unit that is growing. What it is, we don’t know quite yet. I also expect the world of innovation to be much difference. People will recognize that there is a discipline related to the creation of new growth, and will be seeking to emulate the success of Procter & Gamble, Johnson & Johnson, General Electric, Cisco, and other companies that already are approaching innovation as a discipline.
Be sure to check out Idea Sandbox for links to the other Post2Post Interviews with Scott. On Monday, Gordon Graham of Broken Bulbs posted his interview with Scott. Yesterday Greg Daines of Ideanomics posted his interview with Mark Johnson, one of the book’s co-authors. Greg also posted a video of his chat with Mark today, so click on over.