Recently I attended the “Innovation, Corporate Entrepreneurship, and Growth from Within” program organized by the Chicago Council on Global Affairs at the Chicago Club. Robert Wolcott, founder and executive director of the Kellogg Innovation Network moderated.
To start the event, and to correct the notion that innovation is just an “a-ha” moment, Rob started with a story about the discovery of penicillin. It is true that Alexander Fleming’s discovery of penicillin was serendipitous. But Fleming was not the first scientist to notice the substance that killed the bacteria in the Petri dish. It had been observed as a nuisance by other scientists before Fleming. Indeed, someone even wrote a paper on the mystery contaminant that ruined so many experiments. The difference was that Fleming was the first person to understand its implications. Because he had served in World War I, and had seen many soldiers die from infection, he had made it his mission in life to fight infectious disease. Only on top of a lifetime of effort in this area could the light bulb turn on upon seeing the Petri dish. Innovation, then, is less about serendipity than concerted effort.
A very distinguished panel made the point that we can and should become more innovative. The panel, which included Betsy Holden of McKinsey, former co-CEO of Kraft Foods, Timothy Noonan, who leads Phantom Works Venures and Boeing Energy, Anna Catalano, who serves on the boards of Willis Group Holdings and Chemtura, and Peter Bryant, of Clareo Partners and the Colorado Innovation Network, had some great insights on innovation.
The first insight addressed how we can become more innovative. Firms can become innovative, but they must build a capacity with leadership support and a budget. A recent McKinsey study found that the most important factor in innovation is leadership. Innovation must be driven by committed leaders. Noonan said that “innovation is a capability, not an activity.” Betsy Holden talked about Kraft developing an innovation team with a “ring-fenced” budget.
The second insight addressed why we should become more innovative. Firms cannot apply the current paradigm to the future. The panel concluded that while many companies struggle with paradigm adjustment, Cisco, is one company poised for the new paradigm. One example discussed involved Cisco’s recent presentation at an automotive industry conference. Why would Cisco present at an auto industry conference? Because to Cisco a car is more than a car; to Cisco, a car is an IP address. They are prepared to extract value from a car in a completely new way, by monetizing the IP address of the car.
Barriers to entry in many industries are lowering, and firms will face unexpected threats from the periphery. Innovation can mitigate those risks. Firms can become more innovative if they dedicate resources to developing that capability. The firms that develop and execute an innovation strategy will succeed.