In this post I propose my own innovation equation which explores the additional impact of motivation and timing on innovation and the synergy between all the innovation factors.
If you’ve read my last post you’ll recall that I discussed the innovation equation proposed by Brent Saunders: Innovation = Talent + Culture + Incentives1. The importance of talent and an innovation culture in an organization has been a common thread in my posts, and in my last post I looked at the incentives component of this innovation equation and how it relates to providing incentives for R&D workers. Although I like the Brent Saunders’ equation in that it brings incentives into the picture, I think there are additional crucial elements required for R&D innovation in a commercially driven environment.
Motivation & Timing … As discussed in my last post, Self Determination Theory links two important factors that directly influence innovation: incentives and motivation.2,3 Research confirms my own anecdotal experiences that R&D/innovation workers are driven more by intrinsic motivational factors such as advancement of a scientific reputation or developing a new product that will help mankind and are less driven by extrinsic factors such as money or power. Therefore appropriately designed incentives which recognize and motivate R&D/innovation workers increase the tendency to successfully develop an innovation. Without incentives and motivation, innovation is much more unlikely to happen.
Market timing is also an important component of commercially successful innovation. The market has to be receptive to a new product. There are many examples of innovations that failed commercially because they were launched too early, before consumers or customers were ready for them. In many cases, these innovations are re-launched later in a modified form and become commercial successes. Disruptive innovations are especially prone to this fate because they are so different to what is currently out in the market and the timing factor is very important for them to be a commercial success.
One good example is the Apple Newton. Launched in 1993, it was the first PDA (Personal Digital Assistant). Although loved by computer enthusiasts, the Apple Newton was a commercial failure. However it paved the way for the success of the Palm Pilot which followed, and eventually the iPhone and iPad. There are also many examples of late timing for innovations: Windows 8 and the Nokia Smartphone are good examples of recent innovations launched to market too late. Too early to market and consumers may be confused by the technology of an innovative new product or the product underperforms compared to its marketing claims or it is just too expensive vs. the benefits claimed. These scenarios will inevitably lead to market failure. Too late to market with a good or even the “best-in-class” product and consumers will ignore your product as a “me too” product. Every innovation has a window in time when that product can be optimally launched. Launch success plotted over time is probably Gaussian in nature with a relatively narrow window of time for successful launch.
The Multiplying Effect … After I posted my previous post on Brent’s equation, Kelvin Stott commented on the equation and said; “I would replace each ‘plus’ with a ‘multiply’, on the basis that innovation won’t happen if any one of these components is missing. It would also help to illustrate how these components are highly synergistic”. I agree with Kelvin’s comment and have come up with an innovation equation of my own that I believe is more accurate.
My Innovation Equation…
Innovation = Timing [Culture + ∑all workersTalent (Incentives x Motivation)]
Where Innovation = successful commercial innovation; Timing = a probability function over a specific time period which is initially zero, increases rapidly, and then drops back towards zero; Culture = an independent variable that includes two components, internal company culture and external societal culture; and finally an independent motivation variable for each worker = Talent (Incentives x Motivation).
I have used “culture” to describe a broad group dynamic or environmental factor which can affect innovation. I am using the word “culture” broadly to include both internal company culture and external societal culture. This effect of “culture” could be either positive or negative. For example, I go back to Xerox in the 1980s where a motivated and incentivized R&D organization developed innovative products such as graphic user interface, the mouse and the internet protocol, but the broader cultural pressures within Xerox prevented their successful commercialization. Similarly, consumers’ slow acceptance of genetically modified food is an example of how external (societal) culture negatively impacts the early adoption of technically successful innovation. On the other hand, when Botox injections for “beauty” enhancement and whey protein products were introduced to the market their promised benefits and risks were culturally acceptable. Consequently their launch timing was perfect and both products created profitable new markets. Both components of “culture”, internal company culture and external societal culture, need to be positive for innovation to occur.
The “motivation” factor (i.e. talent x incentives x motivation) is synergistic and applies to every R&D or innovation worker and can be summed for every worker involved in the innovation.
∑all workers Talent x Incentives x Motivation
Although all the innovation factors are undeniably intertwined (for example, a highly talented, motivated and incentivized R&D organization will also positively impact that organization’s culture), this equation recognizes that individual workers who are talented, motivated and provided with appropriate incentives have a significant impact on meaningful innovation. The factor is summed for all workers involved in innovative new product development with the understanding that some workers in the project may be de-motivated and will negatively affect this factor. The emphasis on cumulative motivation underscores how important it is that everyone working on an innovation project is motivated and incentivized. In fact, high performing teams self select for motivation and talent.
The “timing” factor is synergistic with both the culture element which incorporates the group dynamic or environmental factors, and with the sum of individual R&D/innovation worker’s motivation factors. As discussed above, market timing trumps all elements for commercially successful innovation. If the culture element is not right, innovation is unlikely to happen. If the motivation factor is not high, innovation is not likely to happen. These two factors maximize the potential for a new innovation being developed but the timing factor must be “right” for an innovation to be commercially successful.
1. Brent Saunders, CEO Bausch and Lomb, 7th CEO Annual Innovation Lecture at the Rothman Institute of Entrepreneurship on December 10, 2012, Fairleigh Dickinson University in Madison, New Jersey http://commercemagnj.com/a-vision-for-the-future-incentives-for-innovation-plus-a-culture-that-values-new-ways-of-thinking/
2. Alan L. Carsrud, Malin E. Brannback – 2009 – Business & Economics
© Dennis Nelson 2013