You Never Fail Until You Stop Trying

26/01/2016

You Never Fail Until You Stop Trying

Gijs van Wulfen

Overcoming resistance and managing uncertainty is determining innovation outcomes. Those were Joseph Schumpeter’s, the famous economist, words in 1928. He also said, “Successful innovation is a feat not of intellect but of will” (1). I could not agree more with him! That’s why being persistent, is the quality that makes you deliver results, taking an idea from scratch to it’s market success. I like to share with you three examples of Dyson, IKEA and AIRBNB in which persistency has played a leading role.

First of all, did you know that the inventor James Dyson had made 5,127 prototypes of his famous Dual Cyclone bagless vacuum cleaner before settling on the model that would make him a billionaire (2)? It’s surely an amazing example of the perseverance of a true innovator, convinced of his new technology to create value.

A second example of great persistence is Ingvar Kamprad, the founder of IKEA, the Swedish furniture retailer. Malcolm Gladwell mentions in his book David & Goliath (3) the story of how he got started: “His great innovation was to realize that much of the cost of furniture was tied up in its assembly: putting the legs on the table not only costs money but also makes shipping the table really expensive. So he sold furniture that hadn’t been assembled, shipped it cheaply in flat boxes, and undersold all his competitors. In the mid-1950s however, Kamprad ran into trouble. Swedish furniture manufacturers launched a boycott against IKEA. They were angry about his low prices, and they stopped filling his orders. IKEA faced ruin. Desperate for a solution, Kamprad looked south and realized just across the Baltic Sea from Sweden was Poland, a country with much cheaper labor and plenty of wood. That’s Kamprad’s openness: few companies were outsourcing like that in the early 1960s. Then Kamprad focused his attention on making the Polish connection work. It wasn’t easy. Poland in the 1960s was a mess. It was a communist country. It had none of the infrastructure or machinery or trained workforce or legal protections of a Western country. But Kamprad pulled it off. “He is a micromanager,” says Anders Aslund, a fellow at the Peterson Institute for International Economics. “That’s why he succeeded where others failed. He went out to these unpleasant places, and made sure things worked. He’s this extremely stubborn character. That’s conscientiousness. But what was the most striking fact about Kamprad’s decision? It’s the year he went to Poland: 1961. The Berlin Wall was going up. The Cold War was at its peak. Within a year, East and West would come to the brink of nuclear war during the Cuban Missile Crisis. The equivalent today would be Walmart setting up shop in North Korea. Most people wouldn’t even think of doing business in the land of the enemy for fear of being branded a traitor. Not Kamprad. He didn’t care a whit for what others thought of him. That’s disagreeableness.”

Successful innovation is a feat not of intellect but of will.

A third and recent example of a startup with persistency is AIRBNB. Two years after graduating from the Rhode Island School of Design in 2005, Brian Chesky and Joe Gebbia moved to San Francisco where they shared a three-bedroom apartment. When a major design conference came to town in 2007, they saw an opportunity to earn some extra cash by renting out their spare floor space. In no time they had put together a website advertising lodging for overnight guests. Later on, Chesky and Gebbia approached Joe’s former roommate, Nathan Blecharczyk, about handling the technical side of the “Airbed and Breakfast” website, as something of a side gig. As they explain, their concept had quite a casual character from the start, “We were offering full bed and breakfast service, but we didn’t have any beds, so we called it Airbed and breakfast.” In August 2008 an improved Airbed and Breakfast website was introduced and was marketed towards business travelers as a more affordable alternative to hotels. Airbed and Breakfast got a lot of media coverage and even caught the attention of The Wall Street Journal. In their business model they charged the guest a service fee of 6 to 12 percent for a reservation, and the host a 3 percent commission fee. The next trial run took place in Denver during the week of the Democratic National Convention. Convention delegates had access to 900 lodging options via the Airbed and Breakfast website. The start-up site ultimately booked 50 accepted reservations during the convention. Without any additional special events, Airbed and Breakfast’s weekly revenue amounted to roughly $200 in the fourth quarter of 2008. Discouraged, the founders questioned whether it was time to just throw in the towel. However, it was anticipated that the upcoming presidential inauguration would draw millions of visitors to the Washington D.C. area. This was the next real opportunity for Airbed and Breakfast. They were able to generate free publicity on the site and successfully generated 150 bookings. Nevertheless, once the event ended, the company’s prospects remained bleak. As the number of bookings staggered, the Airbed and Breakfast website was on the brink of being shut down. Instead, they persisted and decided to join in 2009 Y-Combinator, a start-up incubator program located in Mountain View, California, where they pivoted their concept again. Five years after the start, AirBnB was valued a $2.5 billion company with revenues of $250 million, with a presence in over 34,000 cities around the globe.

Innovation is a long and difficult journey. I like to encourage you, in moments of despair, to continue you efforts in realizing your big dream. When you’re experiencing another experiment which did not deliver the results you hoped for, I hope you will find strength in this wonderful quote of Albert Einstein:

You Never Fail Until You Stop Trying.

Keep Trying! Wishing you lots of success.

[picture: credits Jessica Gosling – Flickr.com]

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innovation

13/10/2015

10 Ways to Reduce your Failure Rate of Innovation

customer frictions, failure, innovation assignment, innovation success

Gijs van Wulfen

You are not able to stand still in this fast paced business environment, but most of the time innovation fails. Innovation process-expert Robert Cooper shows that of every seven new product/service projects, about four enter development, 1.5 are launched, and only one succeeds. Innovation is so difficult to master, indeed. I love to share with you five reasons why innovation goes wrong and give you ten ways to reduce your failure rate of innovation.

How innovation goes wrong

I encounter in practice so many people struggling with innovation. It’s has so many pitfalls. Here’s a list of five reasons why innovation goes wrong in daily practice at so many companies all over the world.

Our short-term mindset rules. Your company focuses on getting results next quarter, as your shareholders demand profits today. In this way money and resources are dedicated to sales & marketing, instead of innovation.
We cannot change our habits. Your company lacks the ability to invoke change, the ability to change their mindset. “My colleagues don’t think beyond what made our company successful thus far”.
We fear failure. Your past innovations were not successful and have cost a lot of money. “Managers were fired because their launches of new products failed”.
Our innovation process is chaos. When you lack a process and structure it’s really hard to get tangible results as it takes 18 -36 months on average to get an new idea to the market.
Customers reject our new products and services. A lot of our new products failed because customers did not wanted them. “We struggle to get inside the head of potential purchasers of the product or service”.

10 Ways to reduce the failure rate of innovation

Although there are no easy solutions, there are ways to improve the effectiveness of innovation in your company or for your clients. I love to share with you ten actions to reduce the failure rate of innovation.

1. Create momentum for your innovation project at the start. There must be urgency otherwise innovation is considered as playtime and nobody will be prepared to go outside the box. If this is not the case: stimulate other managers to explore your fast changing environment and wait until they get nervous and will prioritize innovation.

2. Start your innovation project with a clear and concrete innovation assignment. This forces the top management, from the start, to be concrete about the market/target group for which the innovations must be developed and which criteria these new concepts must meet. This forms a great guideline underway.

3. You can invent alone, but you can’t innovate alone. Use a team approach to get both better innovation results and internal supporters for the innovative outcomes. Invite people for whom the assignment is personally relevant. Invite both people for content as for decision-making reasons. Invite also a couple of outsiders as outside-the-box thinkers. Get a good mix between men and women, young & old, et cetera.

4. A lot of managers love to be in steering groups. Don’t let them! Innovation is a difficult and dirty job. It requires not only ‘young wild dogs’ but also ‘some grey hairs’. Let the internal top problem-owner (vice-president) and important influencersparticipate in the innovation team. Let them join your journey instead of observing it from a distance.

5. Use a structured approach. To think outside the box is a good start. But you have to come back with innovative concepts, which fit the ‘in the box’ reality of your organization, otherwise nothing will happen. A structured approach helps you to connect the dots. It will also help to create a common innovation language among your people.

6. When you ideate unprepared with the usual colleagues hardly anything new appears. That’s why it is essential to get fresh insights before you start creating ideas. Let all team members visit customers and others that serve as a source of inspiration for innovation opportunities. Great ideas emerge after being inspired. So go out there yourself in a search for inspiration.

7. Winning new concepts give potential customers a concrete reason to change. It will solve relevant problems of customers. If you want to create innovative products or services start with discovering relevant customer frictions to solve. There are several ways to discover them, like personal visits, focus groups, web searching and crowd sourcing,

8. The world is changing at a faster pace. Keep a high pace in your innovation project, otherwise it becomes long-winded and boring. It gets killed when it takes too long without any progress.

9. Use the voice of the customer. How attractive are the new product or service concepts really? That’s a legitimate question. Therefore you should check the strength of the new concepts and prototypes among potential customers at the front end of innovation. Use the voice of the customer internally to convince your peers that you’re on the right track.

10. Bring back business. So, draft mini new business cases instead of coming up with post-its or mood boards. And substantiate, in a businesslike and convincing manner, to what degree and for what reason the new concept can meet all essential financial criteria of your organization.

So, I hope these 10 ways will stimulate you to improve your own innovation processes in practice and your success rate!

pic credit: Garett LeSage -flickr.com