Turn ideas into cash

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It’s one of the biggest frustrations in business… a propensity for generating bright ideas that hardly ever turn into hard cash. Here, Fahrenheit 212 co-founder Mark Payne reveals five ways to take creative concepts into lucrative markets

Twenty years ago, the business world appeared to have innovation licked. Most of the companies that innovation consultant Mark Payne, co-founder and president of Fahrenheit 212, worked with were churning out products because they could. It worked. And there was little customer involvement or understanding in that. Then everything changed and innovation became completely customer-focused – and easy for businesses to say No to.

“We had simply traded one problem for another,” explains Payne. “Now we’ve realised that for a high rate of innovation success you need to solve both.”

In his book, How to Kill a Unicorn, he lists many examples of brilliant business ideas from some of the world’s largest companies that stay largely hidden because they don’t make money.

He says: “The reasons why ideas fail are the same regardless of whether your business is large or small. However, smaller businesses need a higher rate of innovation success because they can’t afford to get it wrong. They don’t have the depth of resources that large firms have, so when they innovate, they need to make better choices and stick to the rules.”

1. Tough love early on pays off

Who hasn’t sat through a lively brainstorming session, where even the most ludicrous of suggestions is greeted with encouraging noises and polite nods?

It may be a cultural thing, but there does seem to be a reticence among businesspeople to openly criticise other people’s ideas. “It’s not so much about giving criticism, but giving ideas some tough love early on,” says Payne. “When they brainstorm, the model that people have generally been taught is ‘don’t criticise’. For a long time we thought the same way. The whole point of brainstorming when the concept first emerged back in the late 1940s was to come up with as many ideas as possible, a lot of which you knew would be stupid.

“By doing this, you can end up with a veneer of creativity, but what really happens is that you emerge with very little that is of any use. When you brainstorm ideas, you must focus on concrete outcomes, rather than a roomful of possibilities,” he suggests.

2. Remember, creativity and innovation are different

Bandied around by businesses as they announce their next big idea, the two words can often appear interchangeable, almost as if the process of being creative and achieving market success are one.

“Creativity is a critical ingredient of innovation, but not the only one,” says Payne. “True innovation also needs strategy, operational understanding, and financial understanding, to make that creative spark come to fruition.”

3. Satisfy the customer and the business case

Innovation is a two-pronged process involving the business and its customers in equal measures. It’s a simple premise, but one that a lot of businesses often get wrong.

Payne says: “You start by setting out all the problems that your consumers and your business are facing, and early on, look for connection points. For example, you might need to get to more premium price points, while your consumers may say they want more ‘specialness’ in their lives. There you have a connection, and straight away you have transformed the probability of successful innovation.”

The real key, he insists, is to address business and customer problems at the same time. Tackling them one after another can result in companies spending months and months working out what customers want, before eventually coming back to the business to work out whether that matches what it needs.

“If you want the solutions to both problems – ultimately your innovation – to succeed, set them out and tackle them in parallel,” adds Payne.

4. Create an inventive company culture

An innovative company culture is one that is open to the idea of change, and that can be one of the biggest innovation stumbling blocks for those businesses with a more conservative, traditional culture that has been less exposed to change.

Payne says: “A creativity-obsessed culture, where people are not so caught up in processes and fixated on getting something tangible to happen, is the gasoline tank for innovation. To change a culture and become more innovative, you start by believing that it can change.

“Look, before the Wright brothers came along, people accepted that crashing to the ground was part of the nature of flying. By using a different methodology you can achieve an entirely different success rate, and that goes for company culture.”

One way to develop such a culture, says Payne, is to add the right combination of people types to the mix. “Different people have different roles and different approaches to innovation. Ideally you want an even balance of those who are inventive and creative, and those with good strategic, operational and financial capabilities. Not heavy on one and light on the other. Then you get them to collaborate from day one.”

5. Don’t confuse iteration with failure

One of the biggest hurdles in fostering a culture of innovation is the fear of failure. Understanding the difference between failure and iteration can be a way of overcoming this fear of failure.

“Iteration is a fundamental part of innovation,” says Payne. “If you swap the first version of whatever project you are working on for a newer version, that isn’t failure, that is iteration. Getting to the second version, running out of resources, and then having to wind the project up – that’s failure. The former is unequivocally good. The other is usually not.”

www.fahrenheit-212.com

How to Kill a Unicorn by Mark Payne is published by Nicholas Brealey, £12.99

About author

Alison Coleman

Alison Coleman

Alison Coleman is a freelance editor and writer with national and international publications, covering all areas of business, but with a special interest in entrepreneurs, start-ups, exports, finance, and executive education. Her work can be found on Forbes.com, and in Director, economia, The Guardian, Employee Benefits, and Hays Journal.

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