Wednesday, 3 February 2016

The simple rules of disciplined innovation

Constraints aren’t the enemy of creativity—they make it more effective.

When it comes to innovation, the single most common piece of advice may be to “think outside the box.” Constraints, according to this view, are the enemy of creativity because they sap intrinsic motivation and limit possibilities.

Sophisticated innovators, however, have long recognized that constraints spur and guide innovation. Attempting to innovate without boundaries overwhelms people with options and ignores established practices, such as agile programming, that have been shown to enhance innovation. Without guidelines to structure the interactions, members of a complex organization or ecosystem struggle to coordinate their innovative activities.

How, then, can organizations embrace a more disciplined approach to innovation? One productive approach is to apply a few simple rules to key steps in the innovation process. Simple rules add just enough structure to help organizations avoid the stifling bureaucracy of too many rules and the chaos of none at all. By imposing constraints on themselves, individuals, teams, and organizations can spark creativity and channel it along the desired trajectory. Instead of trying to think outside the wrong box, you can use simple rules to draw the right box and innovate within it.

Simple rules cannot, of course, guarantee successful innovation—no tool can. Innovation creates novel products, processes, or business models that generate economic value. Trying anything new inevitably entails experimentation and failure. Simple rules, however, add discipline to the process to boost efficiency and increase the odds that the resulting innovations will create value.

Simple rules are most commonly applied to the sustaining kind of innovation, often viewed as less important than major breakthroughs. The current fascination with disruption obscures an important reality. For many established companies, incremental product improvements, advances in existing business models, and moves into adjacent markets remain critical sources of value-creating innovation. The turnaround of Danish toymaker LEGO over the past decade, for example, has depended at least as much on rejuvenating the core business through the injection of discipline into the company’s new-product development engine as it has on radical innovation.

Simple rules can also be used to guide a company’s major innovations. In the early 2000s, for example, Corning set out to double the number of major new businesses it launched each decade. A team evaluated the company’s historical breakthrough products, including the television tube, optical fiber, and substrates for catalytic converters. By identifying the commonalities across these past advances, the team articulated a set of simple rules to evaluate major innovations: they should address new markets with more than $500 million in potential revenue, leverage the company’s expertise in materials science, represent a critical component in a complex system, and be protected from competition by patents and proprietary process expertise.

Read the article from McKinsey Quarterly

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