The REAL Innovator’s Dilemma

He’s absolutely correct, but there are a set of business dilemmas around innovation that are even more profound, pervasive, and cultural entrenched. It is only when you get past the heady idealism of innovation (“the entrepreneur’s competitive advantage”) that the gravity of these dilemmas becomes apparent, and the reasons for the current dearth of innovation in our society become clear.

Things happen the way they do for a reason. There are thousands of writers, consultants, business advisors and social reformers out there calling for more innovation as the means of improving organizational performance, productivity and resilience, and achieving breakthroughs in how we tackle social, political, educational, health, economic and environmental problems. They say we need to learn to be better innovators, hire more innovative people, employ more innovative processes and tools, and they’ll tell us how to do it. But somehow, when you look past the hype, this is mostly wishful thinking: There is astonishingly little true innovation happening anywhere in our society, or in business. The more I study this, the more I work with entrepreneurs and the more I think about it, the more I realize there are three, terribly discouraging reasons for this, reasons that have more to do with our modern human culture than economics, marketing or any conspiracy of the established anti-innovation corpocracy.

Before I summarize these three reasons I will predict that this article will provoke a minor storm of protest. It goes totally against conventional wisdom and the current wave of popular, euphoric thinking about the untapped potential of innovation. Unlike Christensen’s Dilemma, there are no ready solutions for these three Dilemmas — and people don’t like to hear about problems with no ready solutions. These Dilemmas suggest that innovation consulting and innovation change programs may be largely a waste of time, energy and money. I will probably be accused of being a defeatist, of sour grapes (because I’m not as successful as Christensen and the innovation-touters) or of being discouraging at precisely the time we need to be encouraging organizations to be more innovative.

No matter. I just call it as I see it. I’ve seen these Dilemmas played out again and again. I blamed myself for not being able to help my clients and colleagues imagine better, research better, or implement better. I blamed myself for not being able to persuade them that more, bolder innovation was critical to their success, and even their survival, and for not getting them to see the value in imaginative, innovative ideas. But it wasn’t my fault at all. These Dilemmas are insuperable, endemic, and totally engrained in our culture.

The three Dilemmas are:

1. Most Entrepreneurs Aren’t Innovative: They got into business to fill a niche that the big companies weren’t interested in. They succeeded on the strength of relationships and know-how about the business they entered, not because of innovation. They aren’t really interested in innovation (unless it’s sexy and marginal and doesn’t push them beyond their comfort zone). Real innovation is risky, and they’re very risk averse — even moreso, in my experience, than corporate executives. They do what they must and change when they must. For the most part, entrepreneurs are not very imaginative. While their CEOs emulate large corporate managers in their passion for developing missions, value statements and strategies, and their propensity for ‘reorganizations’ when things are going badly, they are mostly terrible at implementing change. They have little or no knowledge of successful innovation practices and processes. They hate doing research. As die-hard do-it-yourselfers, they distrust (with some justification) consultants and others who might help them become more innovative. They read all the hype books and articles about corporate CEOs and actually believe the hype. Beyond flipping through these breezy, phony best-sellers, they are too busy to be well-read or very well-informed about anything beyond the day-to-day mundane details of their own business. And they know nothing about complexity, and hence haven’t a clue why the solutions to problems they’ve identified don’t seem to work. In short, they’re scaled-down versions of corporate managers, who are probably the least innovative people on the face of the Earth.
2. Most Customers Don’t Want Innovations: Customers are as change-resistant as managers. They want sexy, marginal enhancements (e.g. cosmetic design improvements) not true innovations. They want movies that are sequels of movies they liked and music that sounds just like the music they like. They buy cars and watch reality TV shows that are clones of the ones they bought and watched last year. Perhaps because changes in products and services generally come with price increases, they want most things to stay the same forever, even though they complain endlessly about them — they’ve learned that many so-called improvements and enhancements aren’t, and most come with a new learning curve. And since most products are not intuitive, anything that requires new learning is annoying, not exciting. Most customers are terrible learners anyway — they’ve never learned how to learn, so they rely entirely on trial and error (“what manual?”), and end up using the product ineffectively, until if they’re lucky someone (likely half their age) shows them how to use it properly. Half of all product returns are due not to product defects but because the customer couldn’t figure out how to use the product, and gave up. Examples of resistance to innovation and change are everywhere — after fifty years, the US still hasn’t converted to the metric system, despite the massive and unnecessary costs their refusal costs everyone. Brilliant innovations like TIVO just don’t catch on with most customers. A decade after hybrid cars were introduced, there are still only a handful of models available, and few customers are clamouring to trade in their SUVs for them.
3. Those Who Need Innovations Can’t Afford Them: True innovation is about identifying and finding ways to satisfy deep, unmet human needs, but if you look at the ‘wicked’ problems in our society — poverty, disease, dysfunctional health and education systems, crime, global warming and environmental disasters — they have only worsened in recent decades. Inequality in our society is growing and accelerating, so that those with the money to pay for innovation have few of the problems that plague the majority. The rich have private health care and education, live in gated communities and drive luxurious cars that keep them distanced from those with real needs. So we get a plethora of cures for impotence while millions of children die of preventable, treatable diseases each year — there’s just no money in developing innovative products, services, distribution mechanisms and channels, supply chains, and businss models for customers with no income and no assets. And in our so-called ‘market’ economy investment in innovation will only occur when there’s a good ROI. 

I’m not saying that there aren’t a lot of people who ‘get’ the value proposition for innovation, and are full of good ideas and good intentions. But most of those people are marginalized in our society — they lack the wealth, the connections and the key skills to bring those good ideas to market. And even if they do manage to find some interest for their idea, they are likely to be told that there is no commercial ‘market’ for it, or launch their own business unsuccessfully to find that out for themselves, or have their idea so watered down in the commercialization ‘process’ that it becomes an incremental novelty rather than an innovation. Or, if it’s a really great idea and actually does get close to realization and start to attract buzz, it will be bought out and shut down (or starved of resources, or mismarketed, or unmarketed) by some big corporation who offers the potential entrepreneur an offer she can’t refuse. And since most budding entrepreneurs have none of the skills (and relationships, and self-confidence) needed to start their own business (and no money to acquire those skills in the ‘market’), most great innovative ideas will never get off the drawing board, or even out of the heads of their imaginers.

Many solutions have been touted for these Dilemmas (I’ve touted most of them at one point or another): Education is proposed in entrepreneurship, and in imagination, for everyone, starting in high school while it’s ‘free’. Not going to happen — the education system is a poster child for lack of innovation, and has no capacity or incentive to teach these essential skills. ‘Best practices’ in entreprepreneurship and innovation fill the Business shelves of the bookstores, but these (even when they’re honest and not exaggerated to stroke the ego of the author or case study interviewee) are devoid of context, and without a major investment in time and money learning how they apply and how to apply them, they’re useless and often even dangerous to the reader. Governments promise R&D credits, government/university facilities, and other incentives to promote ‘innovation’, but the process for evaluating and operating these programs is so political, bureuacratic and otherwise flawed that the money generally goes to the company that has learned the ‘system’ of writing creative, conforming applications and getting them sponsored by influential people, not to the one that could actually benefit from such programs.

Solutions have been proffered to make customers more open to and savvy about innovations, too, but for the most part they haven’t worked either. We all know products that are designed to be simpler and more intuitive are taken up by customers more readily, but designers and developers are so disconnected from customers that they can’t resist adding unneeded, complicating functionality (in response to louder voices inside and outside the organization) that the size of the unfathomable manual ends up exceeding the sixe of the product. And while true innovators focus on ‘must haves’ — real needs — in their design and development, they are usually overruled by marketing and advertising types who find it much easier and more profitable to sell ‘wants’ — to those with so much money that they have no real needs. Customers are so used to being conned by false PR and advertising hype that they don’t believe anything they hear about new products anyway. So, being wary, most follow their neighbours (or kids) in what they buy, rather than buying what it truly innovative.

And of course there are lots of foundations and advocacy groups trying to persuade companies and governments to invest in supporting the development of, and subsidizing, products and services that go to those who can’t afford the ‘market’ price. With 90% of all government subsidies and contracts going to a tiny handful of mostly oligopoly companies with deep pockets and politicians at their beck and call, you know how successful most of them have been. They end up spending most of their time competing with other foundations and NFP groups all begging for the dollars of the few tapped-out citizens who care enough to support any altruistic endeavours and the funds of parsinomious government sponsors facing annual double-digit budget cuts. The economy simply and relentlessly mitigates against innovation for those who really need it.

As I said at the outset, I see no solutions for these three Dilemmas. I still believe in the innovation process I have been writing about on these pages for the last four years. In an ideal world, this prescription should work. Unfortunately, our world is far from ideal, and perhaps its time for innovation enthusiasts, advocates, consultants and pundits to get real. Our culture, and the economic, political, educational and other systems that support it, are all stacked against true innovation. We need to find a better way, a more practical and realistic way, to bring about the changes that our world so desperately needs. I’m not yet sure what that is, and I’m sure open to suggestions.