Nobody wants to be in a commodity business yet people always try to copy industry best practices. How do you expect to be different following that strategy?

At best, implementing your industry’s best practices will get you in the same league as your competitors but will never get you to be seen as the industry or segment leader.  The other end of the scale is to focus exclusively on being innovative. Focusing on innovation may let you strike it rich but the odds are that before you hit the mother lode you will be out of business. So, it seems to me, the only viable solution is to address both paths in parallel.

Why Are Best Practices So Important?

When prospects and customers compare your business to alternatives (usually competitors), they want to know which alternative offers them the greatest likelihood of success, i.e., achieving their goals and objectives.  Being perceived as anything less than best in class will put you at a competitive disadvantage.  The way to avoid being put in that bucket is to perform at least as good as the field. Hence, make sure your performance is at the “best practice” level.  To achieve this “modest” objective follow these steps using customer feedback:

  1. Identify the attributes of your business’ execution which really matter to customers
  2. Determine how your performance rates
  3. Identify which company or companies are considered best in class overall and in the few performance areas that really matter
  4. Find out what experience attributes really create the best-in-class perception
    Identify and quantify the gap between best-in-class and your business’ performance
  5. Close the gap!

Once your company has made a good start on this path, and when you believe progress will continue with minimum coaching, it’s time to start concentrating on innovation.

Innovation is a Serious and High Risk Business

The reason it is serious and high risk is because it will take you, the management team, and eventfully all employees, into a totally new place.  In fact, revolution is a synonym of innovation and stagnation, inactivity, inertia, sluggishness, and unproductively are some of its antonym.  So, innovation requires change and most people are very comfortable with the status quo.

The good news is that the United States is one of the most innovative countries in the world and the most innovative of the large countries (Fortune Insights, September 16, 2013).  Here is some more good news:

  1. There are now a number of graduate schools teaching “Design Thinking” including Harvard and Stanford.
  2. There are a number of consulting firms like IDEO and Continuum who specialize in helping businesses innovate.
  3. Every day there are more and more people in the workforce who learned the basics of the approach by working through a well-facilitated process.
  4. There may well be people in your business ready to break and mold if only they have some encouragement and support.

Here is the best advise I have seen about how to begin the innovation process:

“The way to get started is to quit talking and begin doing” — Walt Disney

How To Begin Doing

  1. Go out and talk with real people who have lead innovative projects.
  2. Talk to customers and identify problems they have which they believe are both unsolvable and game changing.
  3. Talk to the people in your company that you know are creative and not risk adverse.
  4. Budget some money that you can afford to lose.
  5. Set up a place for them to work and yet be invisible to the rest of the company.
  6. Suspend most rules.
  7. Encourage quick failures and long lasting learning.
  8. Be patient and supportive.
  9. Continue incremental improvements to pay for this activity.

Finally, do not get discouraged and do not let anyone in the company get discouraged.  And keep your eyes on the business and remember that you are on the right path and not complacently heading to mediocrity a la Dilbert’s Pointy Hair Boss.