"Our company has, indeed, stumbled onto some of its new products. But never forget that you can only stumble if you're moving." Richard P. Carlton, Former CEO, 3M Corporation, 1950
Great wisdom shared by two great business leaders.
"Purposeful Accidents"
Jim Collins and Jerry I. Porras, authors of the bestseller "Built to Last", discuss the role of Creativity and Innovation that drives some of the successful habits of Visionary companies. They observe that "some of their (visionary companies) best moves were not by detailed strategic planning, but rather by experimentation, trial and error, opportunism, and--quite literally--accident." But they were no ordinary accidents. Rather "purposeful accidents" according to the authors.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
Opportunistic or Planned Innovations
The authors give several examples of visionary companies including Johnson & Johnson's accidental move into Consumer Products with discovery of "Johnson's Toilet and Baby Powder" and "Band-Aid", Marriot's opportunistic step into Airport Services from providing meals in the airports to inside the airplanes, American Express's unintended evolution into Financial and Travel Services with the introduction of "American Express Travelers Cheque" and then Tourism and Travel, HP's unplanned move into computer business (when it designed its first small computer simply to add power to its line of instruments products) and more. These innovations were neither aberrations, nor they represented random luck--the authors discovered there was more to these innovations than what appeared on the surface--something bigger at work.
Darwin and the Evolutionary Progress
The authors label this type of progress by visionary companies as "evolutionary progress". Because evolutionary progress is unplanned progress, beginning with "small incremental steps or mutations, often in the form of quickly seizing unexpected opportunities that eventually grow into major--and often unanticipated--strategic shifts." Authors believe this is comparable to Darwin's theory of Evolution--species evolving by a process of undirected variation and natural selection--the survival of the fittest. Of course the difference with visionary companies being that there is a plan in place that stimulates these experiments and variations, and ultimately creates the meaningful inventions.
Johnson and Johnson - Failures to Innovations
Johnson & Johnson, one of the visionary companies in the book, has never in its 107-year history, posted a loss. It has had many failed ventures such as a foray into Kola stimulants, colored casts for children, heart valves, kidney dialysis, and ibuprofen pain relievers - the list is quite big. The failures result at J & J from the fact that the company emphasizes placing bets on many potential opportunities--most opportunities possibly fail, but the ones that do succeed, they succeed big. The bets, or the experimentation, are an essential price to pay for successful Innovation and Long-term growth. At General Electric, Jack Welch the then CEO, called this "planful opportunism"--directing a business by setting only a few clear, overarching goals and letting the people seize any opportunities they saw to further these goals.
3M - Accidents to Innovation Machine
What about 3M, quite possibly the most innovative company of our times that even CEOs of other visionary companies admire? 3M is best known for its household brands such as Post-It note, Masking tape, Scotch tape, and many more. 3M initially failed in its mining business, and eventually stumbled onto most of the successful innovations that we know 3M for, including Post-It, Masking and Scotch tape. According to the authors, "Although the invention of the Post-it note might have been somewhat accidental, the creation of the 3M environment that allowed it was anything but an accident." 3M institutionalized such mechanisms to drive Innovation as the "15 percent rule" - technical people spend up to 15 percent of their time on projects of their own choosing or initiative, "25 percent rule" - each division should produce 25 percent of annual sales from new products and services introduced in the previous five years, "Golden Step" award - given to those creating successful new business ventures originated within 3M. More mechanisms were created to stimulate internal entrepreneurship, test new ideas, create unplanned experimentation, share new ideas, develop new innovation, cross-fertilize technology, ideas and innovation, stimulate innovation via customer problems, speed product development and market introduction cycles, provide profit sharing, and promote "a small company within a big company feel" by creating small autonomous business units and product divisions - in early 1990 3M had over sixty thousand products and over forty separate product divisions.
Norton - Lessons Learned
The authors argue that whereas 3M created the mechanisms and management practices to encourage individual initiatives and experimentation, Norton was the exact opposite. 3M took the approach of "try a lot of stuff and keep what works", whereas Norton was centralized, bureaucratic and stagnant. Not only that, the authors discovered that Norton had explicit policies discouraging entrepreneurship; there were no incentives for creativity and towards looking outside for new opportunities beyond the traditional products and businesses. Norton emphasized too much planning from the top down, and made it a way of life. Norton eventually tried to innovate and expand with acquisitions, but it was too little, too late. Norton, a company that at one time was ten times the size of 3M, ceased to exist (was acquired on its way down in the nineties).
Five takeaways stimulating Innovation
The authors summarize their findings from 3M and provide five takeaways to drive Innovation at any business:
1. "Give it a try--and quick!" - Essentially echoing on having a process to try out a lot of stuff, and keeping what really works. The key here is to do something. Keep on trying something new.
2. "Accept that mistakes will be made." - Learn from the mistakes quickly, and move on. Failures are part and parcel of what creates new innovation. Don't repeat the same mistakes.
3. "Take small steps." - Experiment, but on a small scale. When something looks promising, go all out and seize the opportunity. This way one can do plenty of inexpensive experiments that create a funnel of would-be innovations.
4. "Give people the room they need." - Without entrepreneurship, there is no experiment. Without experiment there is no success or failure. People need some time and room to experiment.
5. "Mechanisms - build that ticking clock!" - How do you harness creativity and build innovation? It cannot happen simply by chance. Companies need to create practices and tangible mechanisms to experiment, try out new ideas and innovate.
The authors give several examples of visionary companies including Johnson & Johnson's accidental move into Consumer Products with discovery of "Johnson's Toilet and Baby Powder" and "Band-Aid", Marriot's opportunistic step into Airport Services from providing meals in the airports to inside the airplanes, American Express's unintended evolution into Financial and Travel Services with the introduction of "American Express Travelers Cheque" and then Tourism and Travel, HP's unplanned move into computer business (when it designed its first small computer simply to add power to its line of instruments products) and more. These innovations were neither aberrations, nor they represented random luck--the authors discovered there was more to these innovations than what appeared on the surface--something bigger at work.
Darwin and the Evolutionary Progress
The authors label this type of progress by visionary companies as "evolutionary progress". Because evolutionary progress is unplanned progress, beginning with "small incremental steps or mutations, often in the form of quickly seizing unexpected opportunities that eventually grow into major--and often unanticipated--strategic shifts." Authors believe this is comparable to Darwin's theory of Evolution--species evolving by a process of undirected variation and natural selection--the survival of the fittest. Of course the difference with visionary companies being that there is a plan in place that stimulates these experiments and variations, and ultimately creates the meaningful inventions.
Johnson and Johnson - Failures to Innovations
Johnson & Johnson, one of the visionary companies in the book, has never in its 107-year history, posted a loss. It has had many failed ventures such as a foray into Kola stimulants, colored casts for children, heart valves, kidney dialysis, and ibuprofen pain relievers - the list is quite big. The failures result at J & J from the fact that the company emphasizes placing bets on many potential opportunities--most opportunities possibly fail, but the ones that do succeed, they succeed big. The bets, or the experimentation, are an essential price to pay for successful Innovation and Long-term growth. At General Electric, Jack Welch the then CEO, called this "planful opportunism"--directing a business by setting only a few clear, overarching goals and letting the people seize any opportunities they saw to further these goals.
3M - Accidents to Innovation Machine
What about 3M, quite possibly the most innovative company of our times that even CEOs of other visionary companies admire? 3M is best known for its household brands such as Post-It note, Masking tape, Scotch tape, and many more. 3M initially failed in its mining business, and eventually stumbled onto most of the successful innovations that we know 3M for, including Post-It, Masking and Scotch tape. According to the authors, "Although the invention of the Post-it note might have been somewhat accidental, the creation of the 3M environment that allowed it was anything but an accident." 3M institutionalized such mechanisms to drive Innovation as the "15 percent rule" - technical people spend up to 15 percent of their time on projects of their own choosing or initiative, "25 percent rule" - each division should produce 25 percent of annual sales from new products and services introduced in the previous five years, "Golden Step" award - given to those creating successful new business ventures originated within 3M. More mechanisms were created to stimulate internal entrepreneurship, test new ideas, create unplanned experimentation, share new ideas, develop new innovation, cross-fertilize technology, ideas and innovation, stimulate innovation via customer problems, speed product development and market introduction cycles, provide profit sharing, and promote "a small company within a big company feel" by creating small autonomous business units and product divisions - in early 1990 3M had over sixty thousand products and over forty separate product divisions.
Norton - Lessons Learned
The authors argue that whereas 3M created the mechanisms and management practices to encourage individual initiatives and experimentation, Norton was the exact opposite. 3M took the approach of "try a lot of stuff and keep what works", whereas Norton was centralized, bureaucratic and stagnant. Not only that, the authors discovered that Norton had explicit policies discouraging entrepreneurship; there were no incentives for creativity and towards looking outside for new opportunities beyond the traditional products and businesses. Norton emphasized too much planning from the top down, and made it a way of life. Norton eventually tried to innovate and expand with acquisitions, but it was too little, too late. Norton, a company that at one time was ten times the size of 3M, ceased to exist (was acquired on its way down in the nineties).
Five takeaways stimulating Innovation
The authors summarize their findings from 3M and provide five takeaways to drive Innovation at any business:
1. "Give it a try--and quick!" - Essentially echoing on having a process to try out a lot of stuff, and keeping what really works. The key here is to do something. Keep on trying something new.
2. "Accept that mistakes will be made." - Learn from the mistakes quickly, and move on. Failures are part and parcel of what creates new innovation. Don't repeat the same mistakes.
3. "Take small steps." - Experiment, but on a small scale. When something looks promising, go all out and seize the opportunity. This way one can do plenty of inexpensive experiments that create a funnel of would-be innovations.
4. "Give people the room they need." - Without entrepreneurship, there is no experiment. Without experiment there is no success or failure. People need some time and room to experiment.
5. "Mechanisms - build that ticking clock!" - How do you harness creativity and build innovation? It cannot happen simply by chance. Companies need to create practices and tangible mechanisms to experiment, try out new ideas and innovate.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
If you enjoyed reading this Creativity and Innovation best practice, I recommend the complete list of Creativity Innovation Best Practices.
Acknowledgements:
Jim Collins and Jerry I. Porras - Built to Last - Successful Habits of Visionary Companies
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