In our Innovation Interview series, each week we talk to thought leaders, inspirers, and innovators to pick their brains about the state of innovation, trends, and what’s in store for the future. This week we caught up with Dave Knox, Author, “Predicting the Turn: The High Stakes Game of Business Between Startups & Blue Chips” Managing Director for WPP Ventures, CMO for Rockfish, and Co-founder of The Brandery. Knox was also a seven-year veteran of Procter & Gamble, where he was instrumental in the digital turnaround that led to P&G being named to AdAge’s Digital A-List.
Why is execution the most critical part of the innovation process?
Knox: Very few ideas are original. What sets the innovators apart from the dreamers is the willingness to execute and make something happen. As they said in the movie The Social Network, “If you guys were the inventors of Facebook, you'd have invented Facebook.” Too many companies and hopeful innovators focus on ideation as being the most important part of the process. But, real entrepreneurs know that is the doing, the execution, which really matters.
What is the biggest challenge of innovation?
Knox: The biggest challenge of innovation is realizing and accepting that it is both a creative and destructive exercise. Especially when it comes to the Fortune 500, innovation often requires a big company to “disrupt” a current line of business. It is incredibly challenging to look a co-worker in the eyes and know if you are successful at your project, you might destroy their job.
What does it take to create a balanced portfolio that wins?
Knox: A balanced portfolio can take multiple approaches. In general, I think of it in two ways. First, I am a big fan of the Innovation Ambition Matrix created by Monitor and covered in the Harvard Business Review. Core, Adjacent, and Transformational are great ways to balance the portfolio. The second approach I advocate for a balanced portfolio is in the activities themselves. As I covered in my book Predicting the Turn, a balanced portfolio includes innovation driven acquisition, strategic investment, partnership, and “disrupt the disruptor.” Each has its own unique role and a balanced approach is much better than placing all the bets on one thing.
How can we ensure buy-in of an idea across the entire organization?
Knox: Buy-in across the organization starts with buy-in from the top. Innovation needs to be supported and championed by the CEO and communicated across the organization. Think about the companies we consider most innovative today – Amazon, Tesla, Apple – all of them are companies where the CEO is the one pushing for the innovation and championing its importance.
Why is it important to drive and embed innovation into every part of the organizational culture?
Knox: If innovation is not broadly supported across every part of the organizational culture, it will create roadblocks that often end up killing the efforts. The naysayers might not be able to outright kill the innovation up front but they can slowly starve it of oxygen. Unfortunately, the result ends up the same.
How can large corporate power-houses capture the spirit of a nimble startup?
Knox: The best way for a corporation to capture the spirit of a startup is to follow the example of Amazon, and in particular, the advice of Jeff Bezos.
In their 2015 Annual Letter, Bezos addressed this very concept when he wrote:
“Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there. Outsized returns often come from betting against conventional wisdom, and conventional wisdom is usually right. Given a ten percent chance of a 100 times payoff, you should take that bet every time. But you’re still going to be wrong nine times out of ten. We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs. The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs. This long-tailed distribution of returns is why it’s important to be bold. Big winners pay for so many experiments.”
How can you ensure a successful go to market strategy?
Knox: The best way to ensure a successful go to market strategy is to start by devoting the right resources in terms of people and finances. The best talent and the most financial support are usually devoted to a company’s current business. For innovation to really work, the same type of support needs to go to the new, not just the old.
Want more on this topic? See Dave Knox speak at BEI: Back End of Innovation October 29th at 9:30 AM in Orlando, FL. He will be presenting a keynote session, “Predicting the Turn.”