INTEVIEW: The Emergence of New Innovation Disciplines Larry Keeley

As an obsessive investigator into the causes of innovation failure, Larry Keeley contends that, "Almost everything about the way innovation is taught and practiced and asserted is wrong." Larry is the co-founder and president of the 24-year old innovation and strategy consulting company Doblin Inc. He shares his intimate understanding of innovation in his classes at the Institute of Design, the Kellogg Graduate School of Management, the University of Chicago, numerous executive education programs, and in an upcoming book to be published by Harvard Business School Press.

Brandon Schauer: Your soon-to-be published book, Taming of the New, is billed as a guide to the new disciplines of innovation. What are these disciplines you speak of, who are the practitioners, and why should we consider them new?

Larry Keeley: There are several different questions overlapping here. Let's start in a slightly different place. Let's start by recognizing that almost everybody has decided that this is a time when they need to innovate effectively if they run an enterprise. A growing number of business leaders and a growing number of government leaders have come off of two decades of trying to find greater efficiencies in new forms of business process reengineering to do the old things we used to do much more effectively, much more efficiently, and to get massive improvements in productivity. And the evidence is overwhelming that that has worked. But I think it's equally clear to good leaders that they can't continue to expect in the next period massive improvements in efficiency each and every year. We've gone through a couple of recessions and a couple of wars, and during all of that period well-run businesses were trying to do more with less. Now most good leaders are saying, "I've got to figure out a way to get to organic growth; I've got to figure out a way to do something powerful and new — because the world is impatient, because the world engages in very careful scrutiny — unless the new things I do are successful, and unless they're newsworthy, and unless they're startling, and unless they really compel customers, they tend to fail." So that's what's sort of the background behind a greater demand for methods that ensure innovation effectiveness. And that's been the focus of my work for two decades and the focus of my writing intensively for the last five years.

Another part of your question is what are these new disciplines. To a startling degree they consist of abandoning long-held beliefs that I would prefer to call "myths" about what innovation is, how it works, and how you get it to succeed. For instance, it's commonly believed that innovation is fundamentally about the search for a new product, when in fact evidence shows clearly that new products, while important, are incredibly swiftly copied these days and rarely get a sustained advance that contributes to high value growth of an enterprise. New products, thought to be the core of innovation, turn out to be, if anything, a mistake — an overly emphasized, not-very-important basis for innovation. And that one myth is so pervasive that it's captured in lots of cliches: "the greatest thing since sliced bread," or "build a better mousetrap and the world will beat a path to your door." Our research suggests that many other types of innovations — changes to channels or brands or customer experience, changes in your processes or in your service systems or in your business model or in your relationship to other suppliers — are vastly more likely to give you sustained advantage.

There are many, many other mistaken beliefs, myths if you will, about innovation such as that it is fundamentally about creativity. Again, our cliches are revealing. We say it's time to "think out of the box," when people are trying to innovate. This turns out to be extremely inefficient. Starting innovation with brainstorming — as virtually everyone does — mostly is a force of chaos, and it tends to distract a company and to give them the vague sense that they are innovating when in fact all they are doing is being random. Good companies need to begin someplace else, and to then use the right methods in more or less the right order and in more or less the right proportion to innovate effectively.

Another part of your question is what specifically are those methods. Any good innovation exercise should begin with diagnostics. Not with thinking out of the box, but with a specific attempt to identify the emerging market needs, the new sources of value that might come from technologies, the errors of omission by our own firm or specifically by our competitors in a field. These are the things that give you the insights that you need to concentrate the time, energy, and talent of a team inside of an enterprise and to get it to have some chance of producing something that is (a) needed by customers, (b) overlooked by competitors, and (c) reasonably possible inside the corporation itself. And that's how you get to innovations that start to make a big difference.

Brandon Schauer: So we should examine our language and cliches as the trailing indicators of how we think of innovation?

Larry Keeley: Think of them this way. Language always — not just in innovation but in any field — reveals the underlying structures we have in our heads about what to do and how to do it. The language that exists around innovation is both imprecise and implausible. So if you go ask people "What is innovation?" they don't know. They can't define the term. If you go ask them how to pursue innovation, they start listing the oft-repeated but frankly dysfunctional approaches to generating more ideas that enterprises have used for hundreds of years.

So the question is what will it take for this to become a discipline? What will it take for it to be another arena of management science that can be taught in say, for instance, business schools or design schools so that people can do it routinely and reliably. Designers have no trouble trying to help someone understand legibility in a sign, for instance, or usability in an artifact, for instance. Meanwhile, business schools have no trouble telling you how to do effective budgeting or effective auditing or good HR practices. But bring the topic up a level of abstraction to the loose goal of innovation and suddenly it's anything goes. Suddenly it's go nuts, don't hold back, think out of the box, the crazier the better. This is naïve, it's silly, it's wasteful, and it doesn't work. In fact one of Doblin's discoveries is that 95.5% of the innovation initiatives pursued around the world by different enterprises fail — by their own measures! — by the measures of sponsoring companies 95.5% of those initiatives fail. It's when we got to that salient fact that we started to say, "Uh-oh, maybe everything about the way innovation is taught and practiced and asserted is wrong." And it turns out that almost everything is wrong.

The world that I see just a few years down the road is a world where innovation will be just another part of management discipline that is well understood, thoroughly analyzed, shared, and taught. And some people, many of them designers, think that that's a depressing point of view. That somehow or another we can do innovation by the numbers. I don't quite think of it that way. I think of it as cracking the genetic code of innovation so that regular Joes and Josephines, not just geniuses and crackpots and gadflies and tinkers, can do innovation. It's what the world needs, it's what the time demands. That's what will cause us to enter a new renaissance, a time when a great many, many more organization and individuals can be effective at creating something new and noteworthy and workable.

Brandon Schauer: You can look at a discipline as being positioned on a spectrum that stretches from being an art, to being a craft, to being a science. For example, manufacturing of products such as silicon chips has progressed from the craft of engineering to the science of chemistry. At this chemistry level there's a high degree of certainty and prediction, substantially increasing manufacturing yields. What do you see as the underpinning of the discipline of innovation that will take us to these higher yields? I'm guessing it's not going to be chemistry?

Larry Keeley: Well, there is a chemistry component when you put together a team. If the chemistry's not right and they don't trust each other and they don't like each other, as everybody knows, that's an obstacle to innovation.

But, underneath your question, the central thesis is correct. It is possible to crack a general process at a very high level of what now needs to be done if you want innovation to succeed more often than it fails. If you want it to succeed let's say 50% of the time or more. It starts, as I said earlier, with diagnostics, so that you have a sense of where to concentrate your innovation talent and skills. That part you can do reasonably objectively. You can get a sense of patterns of ideas that are emerging around an industry. You can get a sense of the comparative strengths and weaknesses of an individual firm or teams within that firm against others in the industry against whom it competes. You can get a sense of intellectual property and other degrees to which an industry is participating in an arena where either more or fewer ideas are emerging that are new and getting some form of legal recognition and protection. So there's a part of it at the very beginning, a preparatory part, which is reasonably objective.

What I think comes next is also very disciplined and has little or nothing to do with creativity. It's assembling the innovation components, the innovation pre-work in a way that the average person — not a genius, not a brilliant scientist or a brilliant engineer — can actually participate with productively. And that's where you assemble the combination of the customer needs, most of them unmet and many of them subtle, often developed by anthropologists; the competitive patterns, the actions being taken by the players in an industry; and the company's own capabilities, which sounds like it ought be self-evident but my experience is that most organizations larger than a thousand people don't know what they're good at anymore. And giving them a clear and definitive catalog of the things that they are really quite skilled at can double or triple innovation successes — just that one phenomenon. Good diagnostics may also double or triple your success rate. Good customer insights can easily double or triple your rates of success. So you compound all those things and you combine them with good step-by-step protocols, and you help people to innovate in a way that makes it a routine activity. The kind of thing that anybody should be able to participate in and anybody should be able to succeed in. That's what we mean by an emerging discipline.

Brandon, one of the things you asked is why is this important, why now? I think it's pretty obvious that we live in one of the most intense times of change in the history of our species. I think it's even possible to assert that part of the reason why there is a rising amount of terrorism around the world is because there is a sense, maybe not really consciously understood, but more unconsciously sensed, that there's a fast moving bus — call it the bus of human progress — and there's a bunch of people who are on the bus and a bunch of other people who aren't on the bus. And I guess, for some of the people not on the bus, there is a thought that if you just bomb the other folks back to the vague and dubious charms of the fourteenth century that somehow or other we'll all be equal and the world will be better.

That's not the most attractive future we could have. It's a really sad and pathetic one. A better future, one that's more encouraging, I think, for everybody, is to sense that we could all learn to deal with this time of change and that we could all become successful at innovating better, and faster, and more reliably. That we could have a few bold ideas pertinent to the times we live in and the challenges we face and give each other the confidence we need to take action on those bold ideas. What appeals to me as an innovation leader is the sense that we could crack innovation enough so that everybody that wants to can feel like they can participate in this time of intense change, and that they can help to author a future that they will love and a world that they can live in and enjoy. So I've devoted my career to the topic of innovation largely because I think its the greatest gift we can give each other as a species in a time of change — a way to author a future that we want to live in.

Larry has worked with a wide variety of pioneering enterprises since 1979, among them firms like Aetna, Apple, Citigroup, ExxonMobil, Hallmark, McDonald's, Motorola, Pfizer, Steelcase, Texas Instruments, and Zurich Financial Services. He is a board member for the Institute of Design as well as WBEZ-FM, a public radio station in Chicago.