Welcome to the Open Innovation planet

For quite some time now marketing & sales have been distancing itself from creativity and innovation, and rely more on brute force advertising and cold outreach. That trend is being reversed by the Coronavirus crisis.

For some time now companies and customers have been saturated with ads and calls that offer no real or new value. This sentiment has been building up. What else can we do with customers? how else can we use our partners? Open innovation, initially a nerdy idea created to connect high-tech companies to academics, seemed like a good alternative to expand the relationship from “buy from me” to “lets make something good together”. Recently it outgrew its initial idea filling in the creativity void created by programmatic and big customer data cold calling.

Coronavirus crisis drastically accelerated this change. Post-Coronavirus market will require innovation much more than before and open innovation will be its main driver. Understanding the market, understanding the customers, catching the new problems, understanding the new needs, making, marketing, and selling the products to solve them will be the major strategic goal of all successful companies.

Just pushing the old products down customer’s throats with tons of ads and cold LinkedIn messages will not work. Post-Coronavirus market will be like landing on a new planet – everything needs to be reinvented, and the best tool for that is asking questions.

We are openinnovation.me

Open innovation will be one of the most dominant growth strategies in the coming decade. Companies that adopt it will discover problems and solutions faster than those that do not. Our goal is to provide the best all inclusive tools for companies to openly innovate with customers, experts, partners, and employees.

For this reason we have rebranded our platform from BEMinnovate.com to openinnovation.me.

Company apps have been moved from BEMapps.com to apps.openinnovation.me.

Blog has been moved to blog.openinnovation.me.

For more information email Andrea Toniolo at andrea@openinnovation.me.

10 innovation ideas generated in 10 minutes

Outsourcing rebranded as remote work staffing.
There is no difference between outsourced and remote team members anymore. This means that outsourcing will have an accelerated growth. Companies can offer remote staff to other companies as an added service on top of their products and services. The ideological barrier of physical presence is removed which opens up many opportunities.

Remote work training
Training people remotely is not more difficult, but it is new and needs to be figured out. We had centuries to perfect how to train people in person. Now we have months to figure out how to train train pilots, bus drivers, crane operators, chemical engineers, police officers, and many others remotely.

Remote education of children
Educating children has been rapidly changed globally within months. Never before has such education reform been effected. Tools and methods used now are far from perfect and remote education innovation is just starting. Educating children should not only deal with learning but also with social and happiness aspects.

Non stop virtual rooms for companies
Current meeting tools such as Zoom and Skype are based on the concept of calls and meetings. Meetings require full presence and are an interruption. While these tools can be hacked and used as virtual work rooms, they are not actually made as such. There is a need of virtual rooms which allow constant communication and cooperation which is not based on meetings.

Integration of services and products
Access to services will be reduced by lack of physical presence and by increased number of failed service providers. Companies should keep adding services on top of their current offering to make sure that their products can be easily integrated and used.

Cross-industry collaborations
Access to new markets is not geographical but also industry based. New markets can be reached through cooperation with companies in other industries. Cross-industry collaborations and partnership offer an enormous potential in innovation and growth.

Specific domain search engines
Google is dominantly a consumer search engine catering to the needs of average individuals. Amazon, Alibaba, and others are search engines focused on specific products. While there are many portals and databases of products, there is still a huge need of easy to use search solutions for many specific domain names.

Home swapping
With remote work people might decide to exchange their homes with someone else in order to experience living in another area. Home swapping is simpler than renting out your home and renting a new home. It simplifies the exchange catering to the new nomad workforce.

Sustainable IT
IT is an often forgotten industry when it comes to sustainability, while in fact it can play a huge role. Company and personal IT are replaced too often, seldom repaired, but used by everyone. Reducing the need for constant purchasing of new IT products, repairing the current ones, can make IT companies more competitive.

Big data integration
Big data can make or break companies. Companies that do not use big data will definitely fail with increase of remote work. Big data is the main driver behind virtual sales. Offering big data for SMBs and niche industries will definitely be a valuable product in coming years – for companies which are prepared to use it.

Open innovation leadership style

Open innovation should be a whole company attitude which includes top and bottom. It should be reflected in all types of leadership. Here are the main qualities of the open innovation leadership style:

Leader wants to listen more, not to be listened to more
There are two types of leaders: those who are listening and providing a service to the team, and those who expect the team to provide a service to them. To apply open innovation, leaders should try to practice listening and doing what team and customers want. Belief in own superiority and lack of trust towards the team and customers will not create an open culture.

Leader focuses on customer centric goals, instead of internal ones
Nothing kills innovation faster than focusing on internal goals like finance, legal, IT management, human resources, etc. A leader must reach these goals as well, but must always remain focused on customers. Leadership which focuses on internal goals only without considering customers will make the company less open, more focused on itself, and less competitive.

Leader takes risks, and gets better at taking them
Open innovation is a risk taking strategy. Opening up means going outside safety boundaries established by decades of errors. A leader which takes less risks is actually taking the biggest risk – not being open and not innovating. Open innovation leader will take risks and learn how to manage the team and customers through errors.

Leading teams through open innovation requires listening, customer focus, and taking risks. These skills can be learned easily if the leader is motivated.

Remote work is not bad for innovation

“Home working had probably reduced his capacity for creative thought. Informal chats at work were often more useful than formal meetings.” are statements by Andy Haldane, Bank of England’s chief economist. He added that “creativity was important because it fostered innovation, which in turn fueled economic growth”. He is wrong to conclude that remote work is bad for innovation. Here is why:

1) Innovation is fueled by team creativity, but creativity is not fueled by physical presence. Big part of creativity, inventions, and innovation happens without physical presence. Scientific research is a good example.

2) Haldane is expressing his own limitation which does not reflect the real global trend. He holds a top banking position which unfortunately is not a position of high innovation and change, but of status quo. Reality is that during the pandemic, remote work and innovation have grown drastically together.

3) Innovation methods for remote teams have been available for decades and even centuries, with results far greater than any single bank produced. My favorites are early 20th century circular letters.

4) Lack of requirement for physical presence allows companies to engage talent which is not accessible physically. This makes the innovation process more inclusive and diverse. Limiting innovation to physically present talent is exclusive and closed.

Remote work is most likely to remain a lasting change after the Coronavirus crisis. Germany, for example, is already adopting remote work as a basic work right. Major companies have committed to remote work as a standard.

While adopting remote work companies must maintain competitiveness by innovating. To do so they must look beyond old and closed methods such as physical meetings, but must work to find new solutions. There is no better test for a company to show how innovative and adaptable it is, than how it handles remote work.

Increase the rate of innovation

Rate of innovation is the amount of innovation produced by a company. Innovation can be small or big, it can be in products, services, processes, content, marketing, and sales. Rate of innovation can be measured by how many positive changes are added to the customer experience. It is related to the amount of experimentation and research – the more tests, experiments, and research is done, the more new products, services, content, processes, marketing and sales methods will be created.

To increase the rate of innovation a company should:

1) Make it clear to the team that innovation does not include only products, but also other areas: services, processes, content, marketing, and sales. Products are hard to innovate and some industries can not change the products. On the other hand, everything else can be innovated, as long as it improves the customer experience. Content, marketing, and sales are also the main elements of innovation, and if they are not innovated innovation will be blocked.

2) If one area of innovation is slowing down, increase innovation in another area. For example, if funding for product research is lowered, then increase experiments in content and marketing, or adopt new sales methods.

3) Monitor experiments in all areas and evaluate which parameters are resulting in innovation. Without quantifying the innovation process it will be hard to understand if the rate of innovation is dropping or growing, and at which speed. Drop or slowdown in the rate of innovation is a good indicator that the revenue will drop few year later.

3 stages of innovation life: growth, peak, decline

Innovations are like athletes. Their life consists of 3 stages: growth, peak, and decline. Peak is the main event in the life of the innovation. It is the moment when innovation has the biggest market share. Growth is the increase in market share and decline is loss of market share.

It is hard to determine what is actually peak for an innovation. Looking at history it is clear that we have passed peak TV, peak radio, peak print newspapers, and we are in decline phase of those innovations. These innovations will never reach the market share and influence they had before. We are also close to peaks or have passed peaks in oil, coal, and internal combustion cars. We are far from peaks in digitalization, video games, and Internet, and very very far from a peak in space exploration. It is much harder to say when will VR, kitchen furniture, and industrial cinema peak. Hardest for me is to guess what is the peak of porcelain.

Companies must choose which innovation to invest in. In this decision it is important to understand how close is the innovation to its peak.

Is your company a one trick pony?

We live in a world which favors adaptation. Those who adapt and change are considered the best, both in nature and society. In business an opposite of adaptation is a “one trick pony” – a company which succeeded once, grew, but it refuses to change. A company which knows only one trick.

Radical changes like big innovations, new products, new processes, and new teams are radical but necessary for the survival of the company. The main reason why one trick pony companies avoid these changes is because they need to sacrifice their current revenue from old products, old processes, old teams. One trick pony companies are in a difficult position where to move forward they must sacrifice the present.

A new company can disrupt easily because it only needs to convince the customers and has no previous revenue to lose – it can only grow from zero revenue. An established company must first disrupt and change itself, it must say NO to revenue of millions of Euros in hope of long term growth. One trick ponies are simply not able to say NO to the established revenue and are just waiting to disappear.

Good example of one trick pony is any oil company which only signals without real internal disruption. Adaptable company example is Disney which managed to go though many market changes while maintaining its leader position.

Experts are assets - the more the better

Expert is a person who can complete a task better than most. Being an expert is relative to who is available – the more people you know, more and better experts you can find. Main goal of open innovation is to increase how many experts you can access.

Companies, especially SMEs, usually do not have more than few hundred people. Their experts are specialized in already established tasks, and have a hard time working on new tasks. Companies must continuously do new things, and finding new experts is difficult. Even if the pool of people is expanded to suppliers, consultants, and other professional services, this still might not be sufficient.

Open innovation expands the access of a company to experts by eliminating limitations, sharing company information, and engaging marketing and sales. Examples of experts not found in companies, but with open innovation:
– Cycling brand can learn most from professional cyclists,
– Kitchen appliances brand can learn from parents,
– Car brands can learn from urbanists and architects,
– Education organizations can learn from recruiters and company managers.

You can find and invite experts using openinnovation.me. Contact Andrea for help at andrea@openinnovation.me.

Informal, formal, and automated open innovation

Open innovation is any action which contributes to innovation which includes people outside the company (customers). All companies use some form of open innovation and get substantial benefits from it – revenue increase and higher competitiveness. However, open innovation is often informal, invisible, accidental, and spontaneous which makes it a risk. No source of revenue or competitiveness should remain informal and hidden.

Some companies try to formalize open innovation, but these projects depend on the initiative of an isolated team and are usually done as open calls. Other formalization attempts are collection of customer feedback through social media and web forms. These projects are short lived and sometimes more restricting than enabling because they are outside of the company culture.

Ideal approach is open innovation automation which constantly provides all teams with innovation suggestions, product improvements, connections to experts, and customer and competitor analysis, and is part of a culture instead of an informal or isolated project. In such a way revenue and competitiveness benefits from open innovation can be maximized and managed.

Open innovation - a tool for global and local

Globalization creates competition between global companies and local companies. Global companies are at an advantage because they are richer and can easily solve most challenges. Local companies have to prepare to eventually compete against global companies. Open innovation is an effective tool in this competition for both parties.

Open innovation collects feedback from local customers, analyzes it, and makes products which match that feedback. Local companies can use open innovation easily because they have better access and are more agile. Global companies have a harder time using open innovation locally – even with all the resources to collect all the feedback, they can not make or customize all the products.

Both global and local companies should use open innovation because it is an element of customer relationship which is quickly gaining traction. Global companies must prepare to customize products and be more valuable to customers in different localities. Local companies must use open innovation as a strong competitive advantage against global companies, but they also must make sure their customers recognize their effort.

Big 5 Personality Traits and innovation

Innovation is customer’s adoption of change. It can be very small or very big, but it always includes customer decision. Customer decision can be analyzed from the point of view of Big 5 Personality Traits – a standard theory in psychology which evaluates individuals by openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Ideal innovation customers should have high openness and agreeableness.
This is a holy grail of an innovation customer – they are creative, empathetic, and willing to support. Creative, open, and empathetic customers are not easy to discover in sufficient quantities to build a revenue. Customers which are not open, are disagreeable, and do not empathize, are not a good base for innovation growth.

Sales & marketing team selling innovation should have high openness.
If not, they will most likely not be motivated to take risks and will eventually choose a safer and more established career. Also, they need to attract the open customers, and if they are not open themselves, they will have a hard time attracting them.

Sales & marketing funnel should be designed for ideal customers.
All content and interactions should attract customers who are creative, open, and agreeable. Brand, content, and interactions must stimulate these traits in customer decision making process, and that the customer relationship should be based on openness and empathy. If it is based on other traits, such as discount, the relationship might not be stable enough to sustain innovation growth.

Conclusion is that products which create change can not be sold to people who do not want change, by people who do not understand change, with processes which have nothing to do with change. Sometimes the main factor in the success of innovation is to exclude the wrong people.

10 levels of innovation

I prefer to use 0/10 rating because it is not easy to use. The added friction makes people think a bit more and minimizes the impulsive decisions. I attempted to make a 0/10 rating scale for innovation assuming that innovation is an act of improving the lives of customers.

0 – No innovation or new value is created.

1 – A small closed group improved its own performance. Example: internally developed software.

2 – Localizing innovation from elsewhere. Example: distribution or retail.

3 – Combination of already existing values. Example: spa hotels.

4 – Innovation which works only locally. Example: irrigation in Africa.

5 – A new use for an existing product. Example: efficient design redefined as sustainability.

6 – A new product which enables other companies to innovate. Example: new manufacturing technology.

7 – Large part of customers have an improved choice. Example: new gaming consoles.

8 – Large part of customers have immediately purchased the product. Example: Tesla Model 3.

9 – Life of every individual is improved by forcing competition to copy it. Example: iPhone.

10 – Life of every individual is improved by completely eliminating a problem. Example: polio vaccine.

If you have questions or comments feel free to email me.

Innovation quiz - how innovative is your company?

If you are a top level manager – CEO or product design, marketing, sales, HR lead – rate your company by answering 13 questions below. You can invite other top managers to do it. The more top managers answer, the more precise the result will be. The quiz can be also answered by anyone else, but this might not affect the company score.

We are scoring companies by combining the top managers results. We will email reports to participants who leave their email addresses. We will not share your company information with anyone.

If you have any suggestions or questions email me.

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Open innovation is real innovation

Alone we can not do much, so we work in teams to make things that make our lives better. As we want to make bigger things, teams get bigger, but we also start to be inefficient. Inefficient means that we work a lot but make less. The bigger the team, the more inefficient it is. Both Apple and Chinese Communist Party become inefficient with size.

As teams grow, team members loose contact with people outside – customers. Even if they are in physical contact with customers, they do not depend on them. They focus on people who can actually reward them – their managers. And those managers have managers, who also have managers, who focus on shareholders. This is the essence of shareholder value ideology which dominates most big companies.

Such companies usually do not innovate products but focus on, what they call, internal innovation. Internal innovations aim to offset the inefficiencies of team size, and maximize the profit without greatly improving the products. I do not like to use the word innovation for such changes, but many do. Shareholder value with its internal innovation has created some of the biggest global problems – obesity, cancer, climate crisis – because customers were not really listened to.

Only real innovation is open innovation because it gives power to the customers. Without direct customer input, companies innovate to support their internal hierarchies, which in the long run hurts them as well. Open innovation balances the internal with customer needs, actually benefiting shareholders in the long run.

Innovation: doing vs signaling

“Innovation” is a very popular and powerful buzzword, but in spite of its overuse it is here to stay. Therefore we should be able to tell if a company is actually creating innovation and when it is just signaling it.

Innovation is difficult to achieve. Innovation is a real change in the majority of the market, a status quo disruption, a business word for revolution.

Signaling, on the other hand, is a content strategy which attracts customers without delivering value. A brand sends a signal that it is doing something good by publishing content about it. Customers believe it and buy the products, but the brand never delivers on the signal and products were never improved.

Examples of innovation signaling are:
– Slogans include the word “innovation”,
– Names of positions, departments, and buildings include the word “innovation”,
– Products are designed to increase shareholder value and not create customer change,
– Redesigns of packaging, communication, and offices without actually increasing customer value.

The first rule of innovation is that you never need to convince customers that you are innovative. Innovation simply makes previous options obsolete and disrupts the status quo. The more you signal it and pretend it is there, the less you are able to innovate. People who need to innovate, managers and customers, are distracted and stop fighting for change.

Exit the bubble to stay young

Big risk for any company is that it appears old to customers. Old means irrelevant. Its products can work, prices can be fine, but it just seems out of date, from another time, not contemporary, not beneficial to whatever is a current ambition. This customer perception is a strong negative factor in their buying decision.

Competitive companies are always playing catch up with the latest trends. During Coronavirus crisis this catch up has drastically accelerated. As we are still in the Chaos phase of the crisis, no one knows what the new rules will be, but we do know that changes will be substantial.

The Coronavirus crisis has dominated most of the year and has no sign of stopping. Just by its duration, it has accelerated numerous trends and turned complete industries upside down. It is an absolute status quo destroyer. The smallest changes are that USA presidential hopeful will lose, that companies are cancelling offices, tourism is non-existent while travel is barely there. Many of these changes are directly caused by the Coronavirus, and indirectly by disruption opportunism. Either way, the world after the crisis will be very different.

Companies that do not adapt to the new rules will appear old and irrelevant. Even if their products work, customers will avoid them. Loyal customers may linger but new customers will not stick. These companies will go through a slow death simply because they did not make changes to appear relevant.

To appear relevant it is necessary to listen much more than ever. And not only to internal teams and loyal customers, but to listen to potential customers, non-competitive companies, and other industries – everyone outside the traditional circles. Status quo rules are to listen to loyal customers and compete against similar companies. The rules of the post-Coronavirus world are opposite: listen to the new and possible customers, compete against companies you never imagined as competitors. In essence, exit the bubble to survive.

Trojan Horse with a slice of open innovation

Entering new markets is one of the more efficient growth methods. The key to entering new markets is to find a hole in the competitor offering and fill it with your own new product. Important factor is not to place too much pressure on this new product because its main role is to allow company entry and promote other products. This new product is a Trojan Horse allowing the company to sneak in among the competitors without a direct conflict.

This Trojan Horse product needs to satisfy following 4 requirements:
1) It needs not to compete with current competitors in the new market, direct competition makes growth slow and expensive,
2) It needs to be very valuable to the customers, best if it is a highly innovative and unique,
3) It needs to be very good at selling the company brand and its other products,
4) It needs to be quick and easy to make so many Trojan Horses can be tested.

Best way to solve points 1 and 2 is to use open innovation. Internal innovation processes are too slow and expensive, while copying competitors creates direct competition with them.

I recommend that you make your own Trojan Horse.

3 weird innovation stories

Orange juice started as a marketing project to sell more oranges.
“In 1916, Lasker came up with a brilliant idea: Sell more oranges by empowering customers to juice them. He realized that the average consumption per serving was normally half an orange. But if customers made their own juice, that number would jump to two or three oranges – up to a 400% increase!”

Tentacle porn provided a way around Japanese censorship.
“Nudity in Japan traditionally has not been viewed as taboo like in some Western countries. However, according to Article 175 of the Japanese Criminal Code, individuals who exhibit and distribute obscene “pictures” or “documents” can be subject to plenty under the law.”

Richard Stallman started Open Source because he could not edit printer code.
“In 1980, Stallman and some other hackers at the AI Lab were refused access to the source code for the software of a newly installed laser printer, the Xerox 9700. Stallman had modified the software for the Lab’s previous laser printer (the XGP, Xerographic Printer), so it electronically messaged a user when the person’s job was printed, and would message all logged-in users waiting for print jobs if the printer was jammed. Not being able to add these features to the new printer was a major inconvenience, as the printer was on a different floor from most of the users. This experience convinced Stallman of people’s need to be able to freely modify the software they use.”

4 ways open innovation improves sales

Getting the product right
Main difference between closed and open innovation is that in open innovation customer relationship starts before product design, and in closed it starts only after. By talking to customers earlier companies can make products which match customer needs better.

Empowering customers
Open innovation a powerful sales method because it increased quantity and quality of a customer relationship, giving customer more power and access to the company. Customers will want more and more to influence product design and they will look for companies that provide them this influence.

Reducing churn
Customers’ innovation ideas can reflect smaller frustrations. These frustrations are not big enough to become a complaint but they are still an important symptom of a negative experience. Addressing them reduces churn.

Better customer understanding
When customers share their innovation ideas they are telling customers what their vision of the future is, which is one of the highest priorities for them. Customer innovation data should have equally a high priority in CRM.

3 tips for an innovation culture

Innovative company culture is based on constant sharing of innovation suggestions for products, services, marketing, sales, processes, etc. Team members can give more value to customers and company if they are engaged on a more creative and innovative level instead of being operational and passive. Here are 3 tips on how to build an innovation culture inside your company:

Explain that innovation can be done everywhere – in services, marketing, sales, processes
Many team members are blocked by thinking innovation is a word for new products. They think it is R&D which is usually big and expensive. This makes them passive, while they wait for someone else to innovate. Fact is that improving supporting services, marketing, sales, and other processes can deliver a lot of competitive value to customers and company.

Explain that innovation does not need to be big
There are all kinds of innovations. Some are big but majority is small. Also big innovations do not work unless small innovations do not support them. Idea that innovation can only be big is another way to block team members into waiting for someone else to innovate while they remain passive and operational. Fact is that small innovations are necessary, valuable, and add up.

Consider every innovation suggestion as training and motivation
In some companies 1 in 1,000 innovation suggestions becomes a product. This does not mean that unrealized innovation suggestions are not valuable. Engaging team members in innovation is highly motivating and is a good way to increase their know-how of products and customers.

Innovation is only an addition to the company culture. It works well with sales, marketing, product design, strategy. It should be seen as a spice that makes everything a bit better, and not a revolution.

Few rules of innovation

1) Most problems are complex. They can appear simple in the start but solving them in practice is complex.

2) Complex problems require diverse and multidisciplinary solutions. If teams working on innovation are not diverse they will not be competitive.

3) Simplest form of innovation is elimination of errors.

4) Most complex form of innovation is paradigm change.

5) Innovation is a cycle which starts with a customer who accepts that they have a problem and ends with a customer accepting a solution. Therefore, innovation is an important part of a customer relationship.

6) Creativity of one individual (idea black box) is crucial but alone it does not create innovation. Innovation is a process of many individuals each being creative and working together for the benefit of customers. Therefore, innovation is always an incremental chain of creativity and one of the most complex forms of teamwork.

7) Innovation requires highly rational communication between customers and team members. It needs to remove all the restrains created by the power relationships inside companies and also between companies and customers. Innovation can only exist as a highly rational communication and teamwork, when it is fully open.

8) Innovation is too complex to be controlled by a precise process, but it should be managed. Goals, rules, deadlines, and tools can substantially accelerate and focus it.

Will 2020 and 2021 be Anni Mirabiles?

Under in crisis and under stress we tend to be more open and innovative. This is our natural reaction which allows us to cooperate and solve new complex problems. Openness also is an important component of innovation without which innovation is always drastically reduced.

Coronavirus crisis is causing substantial stress to everyone, including company owners and managers, and, as a result we have noticed that in past months SMB owners and managers have shown an increase in openness and innovation which manifested as:
– More direct requests for business cooperation with other companies and individuals;
– More direct requests for practical advice from people who were previously not engaged;
– More direct inquiries towards customers instead of reliance on covert analysis and sales-only-communication.

It is our expectation that after the Coronavirus crisis we will see an increase in cooperations, partnerships, know-how, and innovative products and services. While the effect of Coronavirus crisis is devastating to the majority of us, innovators had a chance to channel more of their creative resources into new projects, which hopefully can benefit everyone.

Maybe 2020 and 2021 will be Wonder Years in some industries.

How many people innovate?

At least 10 % of the world population are innovators. This means that approx. 760 million people designed, manufactured, and sold something new and different. Sale definition also includes non-monetary exchanges such as use of government and non-profit services.

Simplified logic behind this guess:
– There are 7.58 billion people in the world,
– There are approx. 200 million companies in the world,
– There are also millions of government and non-profit organizations,
– Some companies and organizations employ thousands and some have no employees,
– All companies and organizations must innovate in some way,
– Innovation output can be a product, process, service, content, business model,
– More complex companies must have many more innovators in order to deliver the initial idea to customers,
– 10 % or 760 million innovators suggests approx. 3-4 per company and organization.

The more companies and organizations there are the more innovation there will be available for customers. Number of innovators will increase as population increases, conditions for business improve in developing countries, and open innovation improves in developed countries.

If you can offer an alternative estimate let me know.

Understanding innovation, part 1 of million

Innovation is important because what and how a company sells today might not work later.

Innovation consists of three main phases:
1) Input – understanding the customers,
2) Design – processing the input and designing the output,
3) Results – something new is made and offered to customers.

Each of these phases has its own rules:

Input
Input consists of all the data, information, feedback, reports from the customers, partners, internal team, and all other sources. More is better, even though not all is relevant for the Design phase. Companies should not a priori censor the Input and should learn how to sort and understand the data and feedback.

Design
Big problem in companies is that all the resources are dedicated to whatever sells now and not to creating something new for tomorrow. If there is no time dedicated to processing the input and working on the results then it is impossible to compete in the future. Another aspect of Design phase is that decision making is often a black box. This is unavoidable because of the very nature of creativity.

Results
It is best to innovate with new products, but waiting for the big thing to happen will make the company less competitive in the meantime. Companies do not have to innovate only with products but also with business models, added software, added services, sales methods, distribution, content, etc. Thinking of a company as a product innovator makes it less competitive.

Since innovation is highly creative and hard to formalize, large parts of these phases depends on intuition. This means that formal approaches to improve innovation should not be operational but higher level tools supported by creative motivation and strategic direction.