The Seven Sins of Innovation

A Strategic Model for Entrepreneurship

D. Richards

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137432537
• Topic: Business
• Subtopic: Small Business
• Index: Business

Offers a psychology based model that features seven key determinants of success or failure for innovation and entrepreneurial endeavours. Provides specific recommendations, examples and case studies that demonstrate how individual and group psychology must be engaged effectively to create entrepreneurial cultures capable of powerful innovation.

part I

Definitions

“Everything is vague to a degree you do not realize till you have tried to make it precise.”

Bertrand Russell (c. 1915)

There is, in my view, a general lack of clarity regarding what we mean by innovation and entrepreneurship. It’s easy to find websites for major innovation initiatives, by governments, universities, and commercial entities that don’t even bother defining the term – as though there might be a universally or widely accepted definition. Instead, as you’ll soon see, there are many inconsistent definitions of innovation. Similarly, there are many definitions of entrepreneurship, and widely diverging views on what it might mean to be an entrepreneur. The beginning chapters of this book will point out the confusion in greater detail, and attempt to provide much needed clarity. The following definitions will be developed, and are offered here in summary form, for easy reference:

Entrepreneur: Anyone trying to innovate.

Successful entrepreneur: Someone succeeding at it.

Innovation: The creation of new net value.

Measuring innovation success or failure: Return on investment (ROI)

ROI = (value created – value invested)/value invested

Value: A psychological experience of fulfillment of needs, wants, motivations or aspirations that may or may not be reflected by what someone will pay for it.

Entrepreneurial psyche: The spirit of entrepreneurship, shaped by individual psychology.

Entrepreneurial flow: The psychological state of actualization and fulfillment of the essential purpose of entrepreneurship.

Innovation strategy: Planning, implementing, monitoring, and journeying toward success.

Innovation zoning: Maximizing value creation and innovation success through a phenomenon I call “bridging” – optimizing all the relationships that matter.

Bridging: Maximizing the flow, delivery, and experience of value in any relationship.

chapter 1

The Need for a New Approach

“Success or failure depends more upon attitude than upon capacity.”

William James (1890)

Reality bites

Success rates across all types of human enterprise are low, and failing to improve:

Innovation success rates are generally below 10%, and even when venture capitalists are carefully monitoring their investments, less than a third of innovations succeed. The vast majority (96%) of innovation efforts fail to beat their ROI targets (Doblin Group, 2005, 2012).

The majority of enterprises report dissatisfaction with innovation performance (Arthur D. Little, 2013).

Three-quarters of the CEOs of multinationals view external collaborative innovation as vitally important, but only half do it, and they only rate themselves as doing it “moderately well” (IBM, 2006).

Eight out of ten new enterprises fail within 18 months (Wagner, 2013).

Two-thirds of organizational “change” efforts fail (Kotter, 2008).

Most marketing investments don’t deliver desired results – “95 percent of what we’re doing doesn’t work” (Pritchard, 2011).

Only a minority of innovative ideas ever see the light of day and successful commercialization, even within leading innovators such as 3M and Google.

Most enterprises don’t achieve sustainable competitive differentiation and advantage.

Mature businesses often struggle to maintain “the love,” growth, and relevance.

The public sector isn’t making enough progress in efforts to do more with less, even with input from highly successful private sector entrepreneurs and change agents.

We’re facing a global crisis in youth unemployment, potentially creating a generation that’s economically left behind – a lack of job creation that is arguably a failure of entrepreneurship.

In fact, mediocre results plague all sectors of human enterprise.

What can be done?

The root cause: human nature

In this book, I will put forward the case that the root cause of enterprise mediocrity is human psychology. Seven specific aspects of human nature conspire to undermine efforts to succeed in enterprises of all kinds. These factors are the key determinants of success and failure. The determinants interact multiplicatively, such that if someone is theoretically perfect (100%) on six factors, but weak (say 10%) on the seventh, the overall result would be poor:

100% x 100% x 100% x 100% x 100% x 100% x 10% = 10%

Of course, overall enterprise results are based on much more complex interactions of individual psychologies, but the overall phenomenon is the same – a drift toward mediocrity based on the weakest links, the poor performers and other deficiencies that drag the whole enterprise down.

Depressed? You should be. But my message isn’t one of doom and gloom.

A new model: strategic bridging

This book delivers a double breakthrough in understanding:

1 How to drive, manifest, and nurture entrepreneurship in organizations based on understanding entrepreneurial psychology.

2 How to maximize innovation success by making it the heart of strategy, based on a powerfully improved framework for bridging the “soft stuff” of psychology and culture with the “hard stuff” of peak performance and bottom line results (Figure 1.1).

Unlike existing prescriptions for strategy, innovation, creativity, entrepreneurship, and success, this book provides fresh new perspectives and rich insights based on explicitly focusing strategy on innovation, and tackling the vital problem of how to engage the core aspects of human psychology to maximize personal and organizational entrepreneurial potential and results. For organizations, the key is to create entrepreneurial cultures focused on implementing strategic innovation agendas. The purpose of this book is to show you how to increase success rates for your efforts to innovate, create sustainable advantage and potential for value creation, and therefore achieve a more valuable entity than one in which a single entrepreneur or a small entrepreneurial group is the core driver.

FIGURE 1.1 Bridging overview

Specific insights related to aspects of psychology

The model provides specific insights and recommendations in seven areas:

1 How individual and group psychology must be managed effectively to create entrepreneurial cultures capable of peak performance and powerful innovation.

2 How to maximize creativity, and develop ideas from concept to reality, driving transformational enterprise improvements.

3 How to lead the innovation process, making the right investments of resources and empowering them to achieve sustainable innovation leadership and advantage.

4 How to engage stakeholders in win–win collaborative partnerships, to create powerful business models delivering and manifesting shared value.

5 How to formulate powerful communications, marketing, and sales strategies, feeding enterprise intelligence and driving competitive success and growth.

6 How to formulate a strategic vision based on intelligence and insights, achieving the right balance between audacious dreams and evolving realities.

7 How to engage entrepreneurial spirit and passions toward the fulfillment of strategic purpose, the highest calling that may be applicable for any organization or individual.

What follows

Now that we’ve discussed why a strategic model for entrepreneurship and innovation is needed, the rest of the chapters in Part I define the various relationships or bridges that require attention, and offer much needed clarity and definitions of the key concepts of innovation, value, and entrepreneurship. The core aspects of the human psyche and entrepreneurial spirit are defined, and related to the critical elements of organizational strategy – the critical success factors for leading innovation.

The “seven sins” of innovation (described in Part II) relate to dysfunctional “psyche centers” – in effect, getting each of the psychological factors terribly wrong, either as an individual entrepreneur, or as an organization trying to innovate. Arguably, when one gets a factor terribly right, it’s a virtue. When an individual or organization becomes a paragon of virtue in relation to all seven factors, the result is “entrepreneurial flow” and “innovation zoning.” Leaders who invest in creating flow and getting their teams “into the zone” will be astounded at the results. Doing this requires a lot of bridging – building, balancing, and tuning relationships among stakeholders, between individual and organizational psyches, between the critical path elements of strategy and functions within organizations – to name just a few.

Part III offers specific prescriptions for using the model to create success. A range of organizations and challenges are considered. Considering each of these prescriptions will benefit any leader, manager, or organization attempting to start, improve, or grow a venture of any kind. For example, Chapter 17 offers insights on family enterprises that will benefit anyone, whether or not you work with family members. Through each of the prescriptions, leaders will be guided on how to apply the strategic model to effectively engage your own psyche and other people to successfully drive entrepreneurial innovation.

How you will benefit

The key benefit you will derive from this book is an understanding of the need to, and how to, strategically and holistically address all the key aspects of entrepreneurial psychology in order to successfully innovate. You’ll see how to formulate and apply strategy to drive entrepreneurial innovation, and become an innovation leader with unbeatable competitive advantage.

Various books and consulting frameworks provide valuable insights and prescriptions for key aspects of the problem, such as stimulating creativity, inspiring change, or managing continuous improvement. But in my opinion, these models and frameworks only touch the elephant, without really seeing that it is an elephant....

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures and Tables
• Foreword
• Preface
• Acknowledgments
• List of Abbreviations
• Part I Definitions
• Part II The Seven Sins
• Part III Prescriptions
• Bibliography
• Index