When being innovative isn’t enough

One of the harshest lessons for new businesses is that virtue may be the only reward an innovator gains. It is over a century and a half since Ralph Waldo Emerson claimed the world would beat a path to the door of anyone whose products were better than anyone else’s. Yet 150 years’ experience has shown again and again that he may have been seriously mistaken.

The fact is that new discoveries frequently remain undeveloped. Patents routinely expire. Often all that’s left is the cliché “the time wasn’t right”. Even when there’s a legitimate appetite for innovation, the best technology doesn’t always win out.

The rivalry between Betamax and VHS offers a classic illustration. That both are now in the dustbin of innovation history shouldn’t disguise that Betamax bombed and VHS more than amply repaid its investors. In spite of the consensus that Betamax had an edge in all sorts of technical areas, the better product lost out to its more commercial rival.

Many inventors and developers who are wedded to the concept of technical superiority struggle to accept such cruel injustices. Rationally trained scientists and engineers are perhaps most stubborn in this regard. They tend to assume that their innovations, once launched, will proceed downstream in a more or less orderly manner – even though experience once again suggests the truth is rarely so simple.

It isn’t until a product reaches its would-be customers that we really learn what kind of reception it will get. We can turn to market research, focus groups and suchlike in attempting to prepare for this moment, but as advertising tycoon David Ogilvy once said of consumers: “They do not behave as they say, they do not say what they think, and they do not think what they feel.”

The result is often that strategies that might have been formulated in anticipation don’t survive “first contact”. As Mike Tyson so sagely remarked: “Everyone has a plan until they get punched in the mouth.” It’s the initial blow that sees many an innovation counted out in round one.

What is required is a much more flexible strategy. What we need is an outlook that accepts that maybe none of us – inventors, developers, consumers – sincerely understands what the future holds. This approach has become popularised as the lean start-up: build a minimum viable product (MVP), engage your customers – who will tell you what’s right and wrong about it – and co-create success.

A major proviso of this method is that customers genuinely prove their interest only when they get their cash out. Repeat sales are the sole authentic validation. Also, the lean start-up still implies linear progress, which could be interpreted oversimplistically.

Let’s take another look at the well-worn notion of the time being right. Could it be that the success of some inferior products and the failure of some superior ones stem from the sheer unpredictability and complexity of the customer decision-making process?

This process is partly rational – which product is technically better? It’s partly emotional – how does the customer feel? Crucially, it’s also a landscape of interconnectivity, with various “tides” pulling customers one way and the other and influencing their decisions.

Selling is a prime example. It can take years to understand the interconnections. The lessons are hard-won, fiercely guarded and often specific to an individual product category, which is why many salespeople stay in the same industry.

This raises an interesting thought. There’s generally an increasing awareness of the assorted hard and soft skills required for a successful enterprise, and attempts have even been made to measure them – witness IQ, EQ and several more. What about a connectivity quotient?

Such a metric would acknowledge all the different factors that might have to be called upon. It could encourage the lean start-up approach to proceed in several different directions and dimensions at once. And it might go a long way towards helping innovators and potential backers alike assess a project’s longer-term resilience.

How best to devise a quotient of this type is a moot point, but it’s worth noting that investors and serial entrepreneurs tend to be especially familiar with the interconnections at play and the complexity they bring. They have a grasp of the trade-offs, how large they are and where the nearest optimums might be found – all against a disruptive background.

That’s why these individuals have succeeded repeatedly – because of the skills and experience they bring to bear and the processes they apply. Their accomplishments are built on an ability to evaluate ideas, frame prospects, articulate propositions, minimise risks and maximise opportunities.

Such skills tend to be among the most underappreciated and misunderstood in the field of innovation – and maybe this, too, is a big part of the problem. Not least in a world where superiority alone is no guarantee of success, they’re skills that every entrepreneur determined to avoid the caprices of the market would do well to seek out and make the greatest possible use of – and, in the fullness of time, to learn, develop and deploy for themselves.

Paul Kirkham is a researcher in the field of entrepreneurial creativity at Nottingham University Business School and co-deviser of the Ingenuity problem-solving process taught to students at its Haydn Green Institute for Innovation and Entrepreneurship (HGIIE). David Falzani is an Honorary Professor at Nottingham University Business School and president of the Sainsbury Management Fellowship.