3 Essential Elements for Innovation | Pragmatic Institute (2024)

Innovation is a loaded word that means different things to different people. So for clarity, when we say “innovation,” what we mean is creative solutions to specific market problems that excite consumers.

Innovation isn’t just interesting new products. The litmus test is whether or not the idea can succeed in the marketplace.

For example, the $400 Juicero machine failed. This wifi-enabled juicer was interesting no doubt, but it wasn’t innovative simply because no one wanted to make a purchase. Why? Probably because there were cheaper and easier solutions already on the market.

Not to mention, the machine was unnecessary for their juice packs. You could simply hand-squeeze the contents of the package into a glass just as easily as allowing the machine to do it.

So how does your organization avoid these types of failures and be an industry leader?

The most innovative companies all have the following elements in common.

Element #1: Culture of Innovation

Culture is a mosaic composed of behaviors, artifacts and rules. All of those elements together define whether or not a company is truly innovative.

Culture comes in two forms. First, it is formal, which is the job descriptions and organizational charts. Second, it is informal, which is the social relationships inside and outside the office.

Also, there are methods for managing confrontation and communication and those contribute to the ease or difficulty a team will face when trying to implement new ideas.

So when we start to think about culture, it’s important that we understand the compilation of all these artifacts that we can point to and say, “These are tangible things that reinforce that we have a culture of innovation.”

If you don’t empower employees to innovate, then all the other strategies that can lead to creative solutions will fail.

Additionally, companies need to recognize that innovation doesn’t happen inside an office. Instead, it’s driven by the people the products will serve. Organizations must enable employees to get out of the office and encourage them to engage with customers and become wildly passionate about solving problems for them.

In fact, as an individual, the best thing you can do to influence an innovative culture is to conduct regular win/loss interviews. Make it a priority to spend several hours outside the office every week in the market.

Finally, a culture of innovation must have a tolerance for failure, which can be a rich learning opportunity. The velocity of change in the marketplace requires an agile methodology or some type of iterative process rather than a long innovative cycle with a big bet on success when the work is complete.

Element #2: Focus on Strategic Objectives

We waste too much time trying to be everything to everyone. We constantly say yes to every new idea without spending time thinking about the “why.” As a result, we find ourselves running in all sorts of directions.

What we might end up doing is chasing innovation that is responding to the actions of our competitors, the feedback from the biggest customers and directives from the highest-paid person in the room. In this situation, we’re not strategic, we’re reactive.

It’s like running around in an endless maze chasing the next big opportunity but not finding success.

Focus is the ability to say no.

You have a limited number of opportunities you can go after in the marketplace, and the most successful organizations know what is distracting and what is valuable.

You can keep existing customers happy and grow that base. You can go find new customers within your sweet spot, or you can go after completely brand new market opportunities.

The question starts to become where are you going to spend your time and energy?

The company can decide that in the next 12-18 months that 90% of the focus is going to be between existing customers and new customers, and then the remaining resources will be investing in those new ideas.

Now, that direction will provide a filter to decide what is worth the energy because there is a target.

If you find yourself, as a product manager or product marketer, responding to building every feature for every individual request, then your strategy might be reactive rather than focused.

In this situation, you have to say, “These are interesting, but how do they relate to bigger strategic objectives?”

Focus is the ability to have a specific answer to the question, “Who are you going to delight and what are you going to build to delight them?”

Element #3: Discipline to Follow Through

Let’s say that we did a great job of creating an innovative culture and we’re solving problems for real people in the marketplace. We’re also using data to give us focus, and we know when to say yes and no.

If we do all of that well, but don’t have the discipline to stay the course, then innovation will still fail.

Discipline is the ability to stay on track. Organizations that lack discipline run around in circles.

The velocity of change in the marketplace is hard to ignore. The agile methodology was created in response to this reality. It’s great because we can break innovation into tiny pieces. We fail early, rapidly prototype and learn quickly.

However, agile is an example of where discipline takes on heightened meaning.

There are so many activities to be successful in agile, whether it’s requirements, reviewing design or user validation testing. All of those touchpoints also represent opportunities to get derailed. Once everyone is back in the room for one of these tasks, it increases the chance someone will come to the table with new ideas.

There is one excellent approach to determining whether or not you’re on track. When you start a sprint or iteration, do you fully complete it through testing before you’ll even consider any new ideas or changes?

If you find yourself making changes before you’ve tested the original concept, then you might find yourself in a position where you’ll never finish the project.

What’s Next?

Culture, focus and discipline are critical elements for innovation success, but where do we find good ideas and how do we know where to focus?

At Pragmatic Institute, we offer two courses that’ll explore innovation in-depth.

Focus

This course shows you how to find opportunities in your market’s problems, score them objectively and identify where your company’s strengths intersect with market values.

Then, you’ll learn how to use that knowledge and market data to successfully and credibly sell your strategies internally.

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Design

This course teaches you how to take a human-centered approach to market problems, so you can partner with designers to create intuitive products the market will embrace.

Leverage the power of design throughout the product life cycle to ensure market adoption, improve customer ratings and increase competitive advantage.

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