uk/crm-blog/2015/november/04/innovation-in-practice-when-would-you-rather-be-right
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Innovation in practice – when would you rather be right?

 

Take a look at the ads below. They all come from the Democratic election campaign in the USA back in 2010. My question to you is simple: Which of these ads works best in terms of its objective – to generate the most donations to the election campaign?

 

 

I’ll give you the answer a bit later.

 

Let’s view this as an innovative process. The marketing department and management are both clear that, historically, they have spent too much money on campaigns that did not achieve their intention. But is there a better way to do things?

 

Being right in the boardroom

Like other “business disciplines”, innovation is ultimately about being right. The way you choose to go depends on who is considered right. 

 

With regard to the ads above, the Democratic Party had chosen one way to go leading up to 2010: it was based on being right in the boardroom. In a bit more detail, they had designed a process whereby they first engaged in internal brainstorming, then hired an advertising agency, tested their proposals on a focus group and finally took their decision based on this process.

 

Historically this had been well-received within the organisation, because people could reassure each other that they had hired the foremost experts, tested their ideas on the “right people” and finally had a qualified discussion on the choice of the “right ad”.

 

Being right in reality

The problem is that this method of developing and testing messages was just as lacking in innovation and just as traditional as the vast majority of day-to-day processes in organisations. It was a process in which there were certainly some qualified eyes on the possibilities, but which ultimately came down to being right in the boardroom.

 

Interestingly enough, the Democratic Party changed its approach in 2010, with striking success – and has not changed since. In practice the party opted to set up a risk matrix in which they scheduled four small trials for themselves. In the first trial they used 5% of their resources (money) to publish the ads, in the next 15%, in the third 25% and in the last, the remaining 55%. They published the ads on the Internet and measured their effect by the number of donations per ad. After each trial, they removed the ad that performed worst in practice. Finally, they were left with the ad that did best (in practice) and threw all their money into that one. So they based their decision on who was right in practice – not in theory.

 

The answer to the question

Of course you want to know the answer to my question: Which of the ads did best?

Did you also guess the ad at the top right? If so, you agree with over 80% of the experts who were asked the same question. That is quite logical, as the ad appeals to something quite fundamental in us humans: “3 days to victory”… who doesn't want to be part of a victory? And “at the critical time” – there is something important at stake.

 

BUT in practice, the ad at the bottom left actually did 40% better than the average. I cannot tell you why, and the point is that it is completely irrelevant. The lesson is that what matters is to be right in practice – not when you are sitting discussing things in the office.

 

THINK BIG. Act small. Fail quickly and cheaply.

Ideas only become innovation when they are tried out in reality. It is only when they are tested that the assumptions behind an idea are shown to stand up, or the opposite. This testing is also a process that demands a high degree of listening and learning.

 

One of the most successful testing methods in the world right now, when it comes to ideas and business testing, is called the “lean start-up”. The method originates from the entrepreneurial environment around Silicon Valley in the USA, but is used in practice by large and small organisations the world over. It is not specific to any industry and can be useful whatever the idea or innovation you want to try out.

 

In my innovation and consulting company Listen Louder we have taken the essence of the “lean start-up” concept and broken it down into these three mantras:

  • Think big
    Because big ideas and visions are what motivate us and create a strong sense of community within the organisation (the innovation culture)

  • Act small
    Because we can only really find out whether or not an idea is a good one by trying it out (as with the election ads above)

  • Fail quickly and cheaply
    Because what all organisations have in common, whatever their size, is that they have limited resources in terms of time and money

 

Lean start-up focuses on LEARNING, which is the critical success parameter. Every time we try out an idea in practice, we need to ensure that we learn as much as possible – in our team and in the organisation as a whole.

 

This can be summed up in the testing model below:

 

 

The testing model has its origin in the fact that all ideas are based on a number of assumptions.

Every time we try to come up with new and innovative solutions, we assume that the recipients or the environment will react in a particular way. “If we change this, it will cause that to happen”.


As can be seen from the model, new ideas are often made up of assumptions that are already proven, and which you therefore do not need to spend time examining. So testing good ideas should always focus on the part or parts of the idea that are most risky. In other words, the areas where we do not already have knowledge to support our assumptions or where other industries have not already demonstrated to us that a given idea is feasible and can succeed in practice.

 

The example given in the testing model comes from the early 2000s, when Apple was about to launch the iPod and the accompanying iTunes. At the time, people were already downloading music (illegally) via Napster, just as they were listening to music on the street on their clunky Walkmans. The risky and unvalidated assumption in this case was therefore that people would also be willing to pay for both the product and the download.

 

 

Innovation in practice – get started now

When we test ideas out in practice at Listen Louder, we often work with the customer to design what goes by the splendid name of “minimum viable product” (MVP). The idea behind an MVP is that the vast majority of products and services are unfortunately a waste of time and money, because people never end up using and/or buying them. In fact, international research shows that 9 out of 10 so-called good ideas fail when they hit the market. The same research indicates that around 80% of all features that we add to a given solution (services to citizens, web sites for private companies etc.) are actually superfluous. These figures emphasise that there is a great risk of failure when you innovate. 

 

The aim must therefore be to fail as quickly and cheaply as possible, with the most lessons learned, and with subsequent success resulting from this process.

 

The way to do this may be by testing your good ideas through MVPs. An MVP is characterised by the fact that it contains the necessary core features for a given idea (minimum + viable), but is not the same as the finished product (because that would be too expensive), but the MVP should not be so bad that it cannot give us an idea of how the customer will react to the finished product.

 

Good luck.

 

Jonathan Løw

Jonathan Løw

Jonathan Løw, born 1978, is a Danish entrepreneur, lecturer and innovation consultant. He has previously been named ‘Entrepreneur of the Year’ and listed among the 100 most promising leaders by the newspaper Berlingske Tidende.

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