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As promised, here is the first snippet of my interview of Mark Johnson, co-author of The Innovator’s Guide To Growth. Here he discusses briefly what led to the book, and what it is really for. Please to enjoy…

This spring I had the pleasure of lecturing at MIT in two different courses on innovation - both taught by the always fascinating Eric Von Hippel. The first was to a group of MBA students and Sloan Fellows at the MIT Sloan School of Management as part of a course entitled, “Innovation in the Internet Age: Emerging Trends“. The purpose of my lecture was to provide a real-world example of a company struggling to rapidly evolve an innovative web platform using as a case study, Knowligent’s IP Portfolio software for managing innovation and intellectual property.

In my session, I briefly recounted Knowligent’s experiences innovating a complex enterprise system and the way that customers essentially negotiate to introduce their ideas into the design of the product. Eric’s objective for bringing me in to lecture was to provide proof for his overarching thesis - which is essentially that a lot of innovation comes from end-users, and companies that embrace this reality are better off for it. Of course this is absolutely true, and Eric has become a sort of collector of cases and evidence in support of this “Open Innovation” idea. The students were very intellectually engaged and a lively discussion ensued over the basic issue of whether customer-driven ideas can be trusted to lead a company’s innovation in the right direction. It was typical of MIT - very probing, questioning, and spirited - and it was a lot of fun! A few things came out of the discussion and my subsequent pondering after that I feel are particularly interesting and useful…

1. Enterprise software is actually a pretty good example of an industry where innovation has been heavily user-driven. Many if not most business software companies originated out of home-grown IT projects within companies for from corporate “wish lists”. Even after a project has spun-out, the vendor tends to be dependent on a small group of corporate customers for at least the first few years of their development, and these customers can exercise enormous power over the development trajectory of the product.

2. However, although a majority of ideas for new features and capabilities originate with end-users, only a small subset tend to have broad appeal. That is, customers can quite easily produce a large volume of ideas for new functions mostly because they have so many jobs to do. But these features make for complex, and usually expensive, software. If the vendor isn’t vigilant in controlling the code base, this significantly restricts the appeal of the software and I think that this can be a very dangerous trap for a software company to fall into.

3. More importantly, it is arguable that these user-driven features aren’t really “innovation” at all. Just because a customer demands certain features doesn’t mean that they are innovating for you. Much of the time this is really just “invention” (as distinct from “innovation”), and often it isn’t even that. The danger is that companies may come to think that they are innovating because they are adding a lot of new “features” to their products.

4. Enterprise/business software seems at the moment also to be a good example of another interesting theory of innovation - namely Clayton Christensen’s idea of “Disruptive Innovation”. Disruption usually happens when new products are introduced that actually offer less of the kind of functionality traditionally demanded by the existing (and influential) customers. So, running counter to the urge to create customer-driven “bloat-ware” is an urge to create software that is actually less functional but which may be easier and cheaper to deliver and use and is frequently innovative in other dimensions. For examples, I point to Google Docs, 37 Signals, and Mint.com as just a few of my personal favorites demonstrating this kind of disruptive innovation in the world of software. In other words, the current tide of “innovation” in software seems to be moving in the opposite direction than the one that big and influential enterprise customers may want to go. As the theory predicts, over time these offerings will likely become ever more functional and ultimately displace their predecessors. It’s this changing of the dimension of innovation that makes disruptive innovation so powerful.

The question that comes out of all this is whether your biggest and most influential customers are likely to lead you in a direction that makes you more or less innovative. My own feeling and experience (from the world of management software) is that involving customers and end-users in driving your product design usually makes you more inventive but can make your products less innovative overall. It is probably true that this will be different in other sectors. However, at the very least this supports the idea that there is a need to carefully evaluate the direction your customer input is driving you and to distinguish between “inventiveness” and “innovation”.

I have been working on a couple of software projects recently, and I have been reminded once again why IP management software implementations so often fail. So, I have come up with five (facetious) things any organization can do to doom its new IP management software to failure.

1. Hold-on to the past
Redesign your new IP management software until it works exactly like your old IP management software.

You need new software because the old has made it very difficult to do your job. It has become a problem in virtually everything you do. After literally years of struggling with it, you have finally built-up enough organizational will to go through the pain and expense of moving to a completely new platform. But, as we all know, change is difficult (see #4 below), and there is always a countervailing pull to return back to the familiar. There are always people who will oppose change, and the pressure to remake the new system in the image of the old one will quickly be overwhelming. Give-in to the urge, and start pressuring your vendor to “adapt” their system to your “needs”. This is the most effective way to make a project expensive and time-consuming. Most importantly, this is how you make really bad, bloated, and buggy software.

2. Delegate
If you want to end up with IP management software that can’t support your IP management, then don’t involve your IP managers.

Make sure that you assign the project to your lowest-level support staff. Remind everyone that these are the people that are directly responsible for most of what the software does anyway. Because these people have no real authority, they will never be able to consolidate the necessary resources (see #3 below), make essential changes to the organization’s management processes (see #4 below), or compel anyone to use the software (see #5 below).

3. Focus on the cost
IP management software should be viewed merely as another cost of doing business that must be aggressively contained.

Other major expenditures such as patent filing fees and management salaries are obviously investments which ultimately are expected to produce tremendous returns. In this light, make sure that you find the cheapest vendor, or if not, then make sure to bully the vendor you do select into subsidizing your implementation. Remind them that you are a very important customer and that, if they make you “happy”, their business will ignite with the white-hot fury of a thousand melting suns. Later, when you are shouting at them for “under-delivering” be sure to hang-up before they remind you that you paid them for only about a fifth of their actual effort. Although you have plenty of direct evidence that this is true, you must balance this with the fact that everyone knows software vendors are notorious scam-artists.

4. Don’t change a thing
Avoid making essential changes to your IP management practices and processes.

Obviously most of the benefits of your new software cannot be realized without matching changes in how you do things. Your IP management processes have to change, or they won’t be any better than before. (It reminds me of the TV ad where the people think that their life will change because they have new telephone service.) But once you start down that road it can lead to a lot of unsavory outcomes. It can even mean changing people’s assignments! Of course, this cannot and must not happen. Change must be something that occurs only in the abstract - in the “software” realm.

5. Don’t turn it on
Ultimately, the most effective thing you can do to prevent a successful implementation is to simply refuse to turn the new IP management software on.

The most common, and easiest to use, method for doing this is to tell the vendor that you are not “happy” with the software. If they get pushy and want to know why you are unhappy, or what they can do to resolve it, just tell them that the whole experience has been “bad” and that you don’t “like” it. Remember that most of the pain of moving to new IP management software is the change that it will cause (see #4 above) - the monetary cost is nothing compared to that. So, even if you have gone through all the trouble and expense of getting new software, rebuilding it to match your old system, and bullying your vendor into doing most of the work for free, remember that most of the pain comes after you “go-live”. Just don’t do it