I am going to share three tips on identifying and reducing innovation friction in your brand, but first, let me explain how and why I use these terms. Firstly, innovation has been muddied in definition over the past decade or more. For us, we refer to it as the ability to adapt to changes (big or small) in the environment we operate in. This isn’t restricted to the negative connotation that is often used when people talk about change, which is defending against disruption. A change in the environment can often be an opportunity for you to leverage and lead the market. In other words, innovation capability is an ability to respond to opportunities and threats caused by a change in your surrounds. The pace and breadth of that innovation is dictated by innovation friction. We call this pace and breadth the Rate of change, which can be described as both the speed “things” go from idea to embedded, as well as the amount of “things” that can be happening at once. Example characteristics of organisations with a high rate of change include; the ability to test a heap of ideas quickly and at once, knack for narrowing down to only those ideas that deliver the best outcomes, and constantly experimenting as the “thing” evolves to maximise the success when it eventually rolls out. Essentially, to those outside looking in, it feels like these brands can constantly change and adapt their products or services and introduce new things regularly (reference: Starbucks, Amazon, Walmart, Target et al). Innovation friction is the built-up grit in things like funding allocation processes, approval processes, team dynamics, culture, leadership alignment, performance measures, technological framework, etc. that are already within the organization that slows down that rate of change. Before you freak out, having a buildup of innovation friction is not a thing to be ashamed of. Consider it your battle scars that you have earned as you’ve progressed to building the business you have now. They are normal, and every brand has them. Yes, even those ones synonymous with innovation at their core like the ones I mentioned before.
There are many types of innovation friction. In writing our book, Retail Innovation Reframed, we researched dozens of retail brands and innovation techniques and came up with a map of them that looks like this:
After all these interviews, research, experiments, and more, we identified a core misconception about what makes those who are awesome at innovation so good at it. We found that it isn’t them having a dark art like ability to choose awesome shiny “things” or technology partners that everyone should just copy and deploy. It was, in fact, their abilities in the process of innovation that counted. In other words, it wasn’t the ‘what’ of innovation that made people good, it was the ‘how’. It is about how they align behind their purpose, how they use a formula to select ideas that deliver customer and business value, how they embrace new skills and team dynamics, how they build and test and refine and test and refine some more, and then how they plan a transition to embed the “thing” as the normal. It is the process of innovation that we found that consistently led to the best innovation rate of change.
From those learnings, we have three tips for you on identifying and removing innovation friction:
- Find the hot spots of innovation friction that are decreasing your rate of change
We created a tool to do this, but you can also get some good improvements using a simple trick. Find some space where you can draw, and plot the lifecycle of a project in your business from the second the idea is spoken aloud, to the moment it is fully embedded and the new normal (being used, not just ‘deployed’). Once you’ve done that, get a bunch of people from different parts of the business involved in delivering work for you (some brands have innovation teams, others expect teams to continuously improve their day-to-day, get a mix of all of these options). Get them to describe the “effort” required for each step of the way. Effort is a measure of time, energy, and political capital (influence, negotiation, meetings etc.). The result should be a 0-5 score of effort. 5 being super hard, requires lots of time, energy, and needs a lot of negotiation, meetings etc. 0 is no friction at all, it takes little to no time and energy from you or the team.
What you should end up with is a consistent set of hot spots. If you don’t, then get more people to do the exercise. It is rare that you do not find hotspots and a better sample size usually helps. If your whole process lights up, then let’s be optimistic and say you have a glorious amount of opportunity to unlock!!! Once you’ve identified the hot spots, be curious and ask a load of questions about what is causing the innovation friction and what would be most helpful to increase rate of change.
- Give everyone the job (yes, even a KPI) to constantly assess and reduce their contribution to innovation friction
The best retail innovators make sure that everyone is aware of their role in innovation and are given the task to reduce any friction within their area of responsibility. Use the hot spot test from the first point as starting point, but it should be every team’s responsibility to self-assess their own built-up friction and to remove or reduce it. There is a lot of politics to play here, including the natural evolutionary instinct of humans to want to be important and play a role, that will need to be overcome. This takes courage, leadership, and a boatload of honesty. An analogy that works well here is the story of the rule created solely to stop the 1% of bad “things” by creating something that impacts the other 99% just as harshly. Be creative and courageous in coming up with a way to reduce friction without reducing the reason the process is there in the first place and celebrate the daylight out of it when someone achieves it!
- Only let the best and tested ideas through to your pipeline.
Innovation friction can also be produced when a bunch of subjective and terrible ideas get through and prioritized and therefore people defending their own key performance indicators reply by putting in checks and balances. If you have a system that filters ideas so that only the best, tested hypothesis make it into the pipeline (like our golden rule, more below), then you reduce the risk of innovation friction forming. In other words, if you stop the bad stuff early, the rest of the process only ever sees good stuff, and naturally spends less time on checking it.
Our tool for helping filter the idea is called the golden rule. Retail innovation is only sustainable when it follows the golden rule. Essentially, you need to test every idea for three things:
1/ It is aligned with your core purpose – why you exist. Consumers are looking to feel good about who they give their money to, employees want to feel good about the mission they go on every day. Every innovation needs to be aligned with and helps drive your brand towards that core purpose.
2/ It delivers customer value – real value. Disenthrall yourself from the idea you’re working on and actually collect evidence that the “thing” delivers real customer benefit.
3/ It delivers business value – real value. It is easy to come up with a business case that loosely delivers on metrics that matter that might be measurable-ish. Ideas need to be tested to deliver proven, real value to the businesses core metrics. These can be financial (reduce cost, boost productivity, grow revenues) or experience (customer or employee to boost lifetime value), or another metric if it is more important to your brand. No matter what the metric, it must deliver tested and real value.
So, there you have it. My three tips to reducing innovation friction. Implement these and you will find that your project timeframes reduce, project costs go down, your outcomes go up, and you get a much more consistent customer and employee experience.
I would love to hear your thoughts, arguments, dissenting opinions, glorious praise and any other form of feedback. As a wise human once told me, all feedback is a gift. Some of these might seem relatively simple, but unfortunately it is uncommon for them to be applied. Hence the name of the business. At ThinkUncommon, we do this for a living, and so if you want to talk more about it, please reach out. It costs nothing to say hello, and we might find something awesome together.