Firms are failing to innovate because they are coming up with too many ideas and do not have the focus or buy-in to make sure the best ones make it and start making money.
A Marketing and Innovation Forum held at last week’s Abta Travel Convention in Turkey heard from Dr David Lomas, a self-confessed geek who had previously worked on a project for the Post Office.
Now an engineer, innovator and educator at the virtual business school Pentacle, Lomas told delegates how, when faced with the potential threat from the web and firms like Amazon, the Post Office initially vowed to “close it down”.
However, he helped to create an innovation lab within the company to get people inspired by technology and it successfully had 3,000 people coming though it every year generating over one million ideas.
“We started looking at the impact we had on the business. It turned out we had practically no impact whatsoever,” Lomas said. “We had completely failed. The business was practically the same as it was before we started.”
Lomas claimed only one in 100,000 new ideas actually is still being used two years later and is making money and he urged delegates to think differently about how they innovate.
He said the traditional approach of funnelling hundreds of ideas through a process and filtering our those to focus on did not work.
“Organisations create this innovation funnel but find they can’t cope with the stuff coming out of the bottom so they start narrowing the funnel and put in breaks and barriers.
“What they have done is create an organisation that’s really, really efficient at killing ideas.”
Lomas said innovation fails on a number of fronts including failing to create the opportunity to innovate.
Then they find it hard to focus on the ideas that actually have the best chance of making them money and then they do not properly engage the fund holders to make this happen.
Lomas added innovation should by definition happen day to day but that firms often do not spend enough time to properly assess the risks involved in making sure it is successful.
“Making it happen is an area where sometimes people struggle,” he said.
The best inspiration for innovation comes from the people who are real advocates and those who are extreme opponents of a brand, he added.
Those in the middle should be used for verification of an idea and Lomas advised firms to “chunk” their projects into manageable units to get them off the ground.
“Chunking the project reduces the risk because at any one time you are not going to have to invest as much time and effort to get it going.
“It may mean doing certain things in a specific region or with a certain subset of consumers. Make the minimum to make sure the money starts flowing in.”