Blake over at AA-RF sent me this article How Companies Turn Customers' Big Ideas into Innovations and there is a ton to chew on here... first comment:

"Specifically, 48 percent were unhappy with their company's ratio of innovation hits to misses, and 51 percent were dissatisfied with how their company identifies new service and product categories."

The first statistic suggests there is a general lack of understanding about how innovation comes about. A ratio is not a good way to measure innovation success. If not only because success is so hard to measure, and failures are often successes, or at least critical to learning. Over and over again failure is a benchmark for innovation-- companies have to fail early, fail often and fail cheaply. Only through multiple rapid failures that teach (and teach something other than don't fail in front of upper management) can innovation occur. This is one of the reasons so much innovation comes from small companies, who have less to loose and fewer managers who are afraid to be caught failing... The Innovator's Dilemma is required reading, if by some chance you haven't gotten to it yet. Despite the book's bestseller status and the insane number of business articles stating more or less the same thing (fail! fail often! fail small, but fail!) seeing this statistic makes me wonder. Of course it's possible that executives are complaining in a way that allows for failure-- what, .02% success? I want to see that ratio up to .04% by next quarter!-- I rather doubt it.

It's hard though, for a company to be comfortable with low success rates-- especially public companies who are expected to show quantifiable success every quarter, and for whom revenue per employee can be a success-measure. This drives companies to do more with less, and get productivity up. But productivity suggests a taylor-esque approach to work. The assembly line is rarely a home for innovation -- as you squeeze each second for efficiency, idle thinking is abandoned and no opportunity to explore alternatives (and fail at them!) is possible.

A common solution is the creation of a R&D team. But this is problematic on many levels-- innovation is done for its own sake apart from the main work, so it is not always easy to understand how to apply new ideas to existing business. Plus it creates innovation ghettos where the "blessed few" of a company can innovate and outside ideas are left to flounder. Programs like Googles 20% provide an intriguing alternative, but posts like this one do raise questions about its effectiveness.

In my experience, innovation comes out of the unfettered pursuit of excellence... and that provides the clues to managing innovation. It's not something you do, but rather how you do everything you do. And that is the beginning....

From Steve Jobs and Jeff Bezos meet "Ginger"

"I think it sucks!" said Jobs.

His vehemence made Tim pause. "Why?" he asked, a bit stiffly.

"It just does."

"In what sense?" said Tim, getting his feet back under him. "Give me a clue."

"Its shape is not innovative, it's not elegant, it doesn't feel anthropomorphic," said Jobs, ticking off three of his design mantras.

"You have this incredibly innovative machine but it looks very traditional." The last word delivered like a stab. Doug Field and Scott Waters would have felt the wound; they admired Apple's design sense. Dean's intuition not to bring Doug had been right. "There are design firms out there that could come up with things we've never thought of," Jobs continued, "things that would make you shit in your pants."

There wasn't much to say to that, so after a pause Tim began again: "Well, let's keep going, because we don't have much time today to-" "We do have time," said Doerr curtly, changing his own ground rules. "We want to get Steve's and Jeff's ideas."

"The problem at this point is lead time in our schedule," said Tim.

Jobs snapped his head from Doerr on one side to Dean on the other, as if he'd been slapped. "That's backwards," he said, his voice rising.

"Screw the lead times."

I keep returning to this article. I love Job's stellar ADD and vivid vocabulary, both loosely disguising a superlative design and business sense. I am not an Apple person, nor an apple user (except my recently acquired ipod), but I am becoming a Jobs fan. He knows who he is.