Never Use This Innovation System

Never Use This Innovation System

Phil Rowley 02/09/2021
Never Use This Innovation System

To paraphrase Inigo Montoya in the Princess Bride: Innovation. You keep using that word. I do not think it means what you think it means.”

Have you ever experienced that moment when you’ve said a word to yourself over and over again, until the word suddenly becomes alien and makes no sense to you at all? You’ve been so busy saying it in your conversations, that you’d never stopped to watch yourself say the word. And now you can hear yourself saying it, for a few seconds,  the word has lost all meaning. There’s even a scientific term for it: semantic satiation 

Semantic satiation seems to be involuntary. Conversely, however, when we talk of ‘innovation’ in meetings, I contend we would do well to actually enforce a moment of artificial semantic satiation, and suggest that if we stopped to roll the word around our tongues and pause as our brain tried to revisit the phrase we had just uttered, we may benefit from a reappraisal of what ‘innovation’ actually means. 

In my line of work - marketing and advertising - the biggest clue that we are not all on the same page regarding its meaning can be seen in two commonly used innovation frameworks. Namely, ‘70/20/10’  and ‘Now, Next, New’. Some of these are used by big blue-chip clients. 

But I think many of these systems are deeply misguided and give us insight into how we’re framing our view of innovation wrong. 

And I reckon we’ve discovered a better system. 

Let’s look at them now. 

Why You Shouldn’t Use 70/20/10

You may have heard of the 70/20/10 system to drive innovation. There are many different variations and iterations, but the most common definition is this: spend 70% of your budget on orthodox activity ;  20% on experimentation or elevation of the existing ; 10% on a big risky, disruptive project.

But the 70/20/10 system is flawed. The first problem with the 70/20/10 system is it is based on budget. And budget shouldn’t be the driver of your innovation. To be clear, I’m not saying innovation should be cheap or free, but rather the budget is the wrong ‘train’ to pull the carriages.  

Once budgets are cut, as they inevitably will be, it’s likely your 20% and 10% budget allocation will be dropped first, meaning your structure for funding innovation is then immediately ruined, and the innovation is far less likely to happen.  You need a system that protects innovation and flexes when budgets change. 

Second, it assumes it knows the price of innovation by allocating an arbitrary 20% and 10% budget respectively - even before you know how you’re innovating, or indeed what the innovation is. It generalises by assuming anything risky will be less than 10% of your budget. Similarly, it assumes a maximum of 30% of your budget will only be innovative, when in theory 100% of your budget could be innovative if used in the right way.  You need a system that allows for innovation within every single thing you do. 

Third, and perhaps most important, the framework doesn’t contain a definition of what innovation actually is, or indeed tells you how to innovate. Semantic satiation needed here, I think. You need a system that defines and directs on how and when to innovate.

70/20/10 is too prescriptive in its structure, too inaccurate in its budgeting, and yet too vague in its direction to deliver meaningful innovation. 

Why You Shouldn’t Use Now / Next / New

There is another system that some prospective innovators use: ‘Now, New, Next’

Again, this system is interpreted in many ways, but generally the construct purports to deliver innovation by stating three innovation goals aligned to three classifications of innovation: Now, those innovations and technologies ready to be used in the present moment; Next,  nascent innovations that are slowly coming to the awareness of users and consumers ;  New,  something truly groundbreaking and innovative and yet to be discovered by the world at large. True disruption.   

Yet we do not use this system either. We find it equally as flawed as 70/20/10. It seems as if one of the allures of Now, Next, New is the alliteration, but in reality it’s categorisation of innovation is arbitrary and, when you dig into it, meaningless.   

The labels of Now, Next, New confuse the notion of when to innovate and totally misdirect the ambition. Although innovation is an attempt to make the future arrive faster, we can only ever innovate in the present, or rather now, because whatever time it is, it's always now. So if every innovation is in the now, when should you execute a ‘next’, or a ‘new’? If you innovate with a ‘next’ or a ‘new’  in the present moment, then surely, that’s a ‘now’?  Furthermore, what's the difference between new and next? If you’re innovating, shouldn’t something ‘new’ be the ‘next’ thing you should be doing anyway? 

Now, Next, New is fundamentally messy tautological nonsense. 

Towards A Better System

Both systems have something in common. Flawed axes. 

70/20/10’s axis is defined by budget. Yet budget shouldn’t be the defining trait of innovation. The Now, Next, New axis is based on chronological order.  Yet, given it’s always now, and the future technically never arrives, it’s also unhelpful. 

To find a more useful axis, we can turn to two books: How Innovation Works by Matt Ridley and Zero To One by Peter Thiel. Both works attempt to address what innovation actually is. There isn't much agreement between them. But that’s the point. 

For Ridley, the idea of the lone genius with a groundbreaking innovation that disrupts entire cultures is a misunderstanding. He points to countless examples - from the steam engine, to flight, to the electric light - where an idea’s maturation hides an accretion of incremental improvements, often by other less famous people. All innovation ‘moments’, he claims, are ultimately built on the back of someone else’s innovations. Like evolution, innovation can only be seen in infinite gradations across time. 

Peter Thiel may not entirely dispute that notion. But it doesn’t stop him flying the flag for the need for innovations that change the game. In his book, Thiel warns against aiming for incremental improvements. A slight advantage over your competitor leads to an undifferentiated product, and will result in a race to the bottom on price. For him, the only way to innovate is to create something so new that it also gives birth to a brand new market, with you as the only supplier.  And yes, other competitors may subsequently come along, but you will have already used your head start to scale and dominate.  For Peter Thiel, if it’s not new, it’s not an innovation. 

I would argue that both Ridley and Thiel are correct, but rather than be binary positions, they are in fact at the far ends of a spectrum of innovation. At one end incremental improvements that deliver lasting change over time. At the other end, innovations that seemingly come from nowhere and upset the existing order. 

But it’s this spectrum that shows us the way to a more useful axis for innovation. Dimensionalised not through time or money, but ambition.

Do-Progress-Pioneer

We discovered an alternative approach that has shown itself to be a proven way to fast-track our partners’ futures. At its heart is a central mechanic that reimagines innovation as a spectrum of ambition. From left to right, three buckets: Do, Progress, Pioneer

  • Do is mandatory innovation. In this bucket are modest, incremental improvements to innovations already in use, or innovations which are new ground for your business specifically. A competitor may already be using it, but for you, it’s new.  
  • Progress are stretch goals and represent innovations that are new to an entire industry or vertical. You would be the first brand or business amongst your competitive set to deploy this innovation. Other verticals may have used it - Autos, Travel, Finance, FMCG - but you will be leading the way within your sector. 
  • Pioneer represents those innovations that are truly groundbreaking and disruptive.  No one from any company, from any vertical, at any point has attempted this. You will be a true disruptor. 

At the beginning of the process we codify an Innovation Agenda.  This aligns opportunities to the Do, Progress, Pioneer framework. For our partners, this then becomes a cross between a roadmap and The 10 Commandments, and is a definitive and visible account of their aspirations expressed via incremental improvements, then stretch goals and then moonshots. The aim is for our partners to execute the mandatory ‘Do’, push for the ‘Progresses’ and if brave enough, attempt a ‘Progress’. How ‘innovative’ they want to be is up to them. 

In marketing specifically, the Innovation Agenda lays out progressive opportunities across all relevant media channels and tech territories - and asks them how far they want to push it. We revisit the plan yearly, often making Progress into Do and Pioneer into Progress,  as we build capability over time. We’ve used this process with our clients for a while now. One client is into its fifth year, and on average uses the process to deliver 35-40 innovations across 14 markets.  

The reason this system has been so successful for us is twofold.

First, the words Do, Progress and Pioneer are verbs. They instruct and direct about *how* to innovate by benchmarking endeavours against competitors, even if that competitor is yourself. It directs evolution without any meaningless restrictions on what to spend, or when to spend it. There is no 70/20/10/.

Second, for every innovative canvas – no matter how complex or expensive – it finds a scalable, affordable entry point and sets it as the ‘Do’, before shining the light down the path towards ‘Progress’ and ‘Pioneer’ to show its more advanced iterations. This calibrates a company’s bravery by providing a hierarchy of innovation goals that scales to their level of ambition. If the client wishes,  all innovations can be executed in the present. There is no ‘Next’ or ‘New’. 

It works precisely because it circumvents the flaws of other systems.  It’s not about budget, it’s not about timelines. It’s about them. And only them. It asks: how brave do you want to be?

The next time someone states that they want to be more innovative, don’t assume you know what they mean.  Help them define it. Help them plan for it. Help become more brave to help them achieve it.

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Phil Rowley

Marketing Expert

Phil is a Global Innovation Director, Media Futurist & Conference Speaker with 18 years’ experience from London, Dublin & Auckland. His key skills are evangelising about the future, simplifying the complex, energising clients and hastening the inevitable. He is also Co-author of - and speaker for - PHD's book 'Merge | The closing gap between technology and us’. Phil holds an MA, Politics and Media from the University of Liverpool. 

   

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