Axel Schultze

How Failing to Innovate Affects the Market Cap of Enterprises

Enterprises don’t need to fear disrupters,
but the disruption in the capital market

A growing number of enterprises feel the headwind from capital markets. Up and coming businesses get valuations far above conventional businesses that may be more than ten times as big. Those warning signals all too often are simply ignored. But that could become a fatal mistake.

Innovation takes 7 to 10 years

Theoretically, enough time for any established market player to respond and fight back. But it isn’t quite that easy. If you look at the early years of the then, new automaker, Tesla, you notice that the established players sold more cars in some metropolitan cities in a month than Tesla sold globally in an entire year. Airbnb sold so few vacation rentals a year that established hotel chains didn’t even notice. Early freelancer platforms connect some inexpensive workers with businesses who had a short-term need in a way that the established recruiting firms didn’t even take the time to understand their business. Now, some people may say this is ignorance. But taking the sheer number of companies and enterprises that have tried something and failed into consideration, an enterprise cannot respond to any brain spark that may happen in this world. However, one group does take that time and effort for a very different reason.

Financial Market Analysts get Extremely Smart


In the past years, top investment firms completely disrupted the financial market. Yet it went almost unnoticed. With far more detailed insights, more intelligent tools, and evolving algorithms, they are able to predict the success probabilities of new market entrants/enterprises to a degree that was unimaginable just a few years ago. CEOs, Board Members, Unions, Investor representatives, and enterprises as a whole will need to shift gear when it comes to innovation. Future-oriented investment decisions drive market caps (value of a company) into new directions. It’s no longer only in the tech space but now also in all other industries like the auto industry, the tourist and hospitality industry, in the business services where a substantial shift is happening: The capital market favors innovation over profitability and size. One newcomer in that market is investment management company ARK-Invest who states on their website “We Invest Solely In Disruptive Innovation”. And the reason is obvious; in the next 10 years, it is more likely that those new and innovative businesses will win, than the established and slowly evolving companies.

Innovation is Entering all Industries

We randomly choose Hospitality, Automotive, and Business Services in our research. You can see how companies with rapid growth into a large industry segment, while there is no or no adequate response from the current market leaders are seen by the capital market today.
AIRBNB
2007 first 3 guests – the company was founded
2009 21,000 guests
2018 300 Million guests
2021 market cap $93 Billion *
2021 Hilton market cap $36 Billion *
TESLA
2012 2,000 or so cars
2015 35,000 cars
2020 1,000,000 cars
2021 market cap $570 Billion *
2021 Daimler market cap  $84 Billion *
FIVERR
2010 Some 1,000 jobs at $5 each
2012 estimated $6 Million
2018 estimated $100 Million in revenue
2021 market cap $7 Billion *
2021 Kern Ferry market cap $3.1 Billion *
at $2 Billion in revenue
* = June 15, 2021

Is the world insane? Then, what was with the market caps of Intel, Cisco, Microsoft, Google Facebook, and so forth. What happened to their competitors like DEC, Amdahl, Zilog, Alta Vista, AOL, or MySpace? Today the disrupters are identified much earlier and get evaluated much earlier to higher levels. Not to help them and not to kill others. The new behavior is only a logical consequence of the desire to be in a rising giant early. The advantage for established enterprises: They get a brand new early warning system. But even then, there is a potential for huge mistakes as you can see in our mini case study below.

Innovate or Get Disrupted

Trying to counter-attack a market intruder that has a disruptive business model or disruptive product, by trying to build something better is not leading to any success. A weak attempt to focus on “Gradual Innovation”, which is nothing but improvement, is definitely not an adequate response either. The only way to counter an innovation from a competitor, no matter what size or age, is by another groundbreaking innovation. Improvement is important – but it isn’t withstanding an innovation. Trying to be better than the new innovator is only an improvement and makes the former leader a follower of the new innovator.

MERCEDES BENZ CASE STUDY
The Daimler AG was an investor in Tesla. But eventually lost interest and sold the shares. Tesla was built on 5 unique aspects: 1) A very fast electric motor 2) New high capacity batteries 3) A big display giving space to all kinds of information 4) A digital experience that went far beyond the proprietary “Board Computer” and 5) A customer experience not seen from the conventional carmakers.
The competition only saw the electric motor and battery. They also did not see the timeline that it took 5 years from introducing the first Tesla to getting it at least a bit off the ground. Chevrolet killed its EV short after launch because they thought the market does not exist. Mercedes ignored it completely, then began to invest and built the EQ series. But it was only the replacement of the motor and tank for an electric motor and batteries.
Only with the EQS, Mercedes finally pushed the innovation button in many ways – BUT – chose not to really talk about it. Still, a market leader by the volume of cars they produce, Mercedes became a follower and did not push their innovation but what Tesla has since 10 years: Motor, Battery, and a “hyper display”. The digital experience and also the customer experience fell behind. And the innovation they made was not even mentioned. When the tough gets going the going gets tough.

Instead of standing their ground and continuing rejecting a large display in or on the dashboard and introducing their innovative head-up display – they competed in a space that has no future for both cars. Instead of drumming up their real innovation, they ignored it because they did not understand what customers want. The innovative MBUX system with a large display mirrored on the windshield, supported by a perfect and unique augmented reality system was not part of the competition. The leader turned into a follower and the capital market recognized it. How is this possible?

Things you can do to correct the current direction

Innovation is everything but a small club of thinking and researching innovators playing in their innovation labs.
1) It needs an innovation mandate from the CEO.
2) It needs a robust innovation strategy that is blessed by the board
3) It requires innovation managers with exceptional talents and abilities – not skills.
4) An innovation process that empowers the team to develop brilliant ideas and then conducts relentless execution.

THE FIRST STEP however is an innovation readiness assessment that makes sure enterprises have the foundation for what is coming.
BlueCallom offers free Innovation Readiness Checks with no obligation at all.

WHY DO WE CARE EVEN BEYOND OUR OWN BUSINESS
Part of that first step is the understanding that by 2050 we will want to change our energy supply, the energy grid, or whatever we can create, we need renewable energies and tap into energy sources we don’t even think of today. We will want to create transport infrastructure for people, goods, and service infrastructure that is far beyond our today’s abilities. We need to have digitized commerce, business transactions, return services, and handling that is far more intelligent than today. We want to make sure that our health systems, health understanding, and sources for health failure are much better structured, organized, affordable, and available. While we could theoretically feed all people on earth even with a 20 billion population it works only if we can integrate those 20 billion people as contributors to our global society, economy, and humanity. Today only a handful of people seriously try to engage in terraforming mars or build a lunar station. That is far too less to be effective and far too less to prevent new monopolies.

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Axel Schultze

10 Things that Change with Neuro Innovation

Neuro Innovation – How ideas get created

Neuroscience had the single biggest impact on our modern understanding of innovation, in particular Neuro Innovation. One key aspect is the realization that ideas don’t come randomly and there are no “magic ideas out of the blue”. The brain composes ideas from past experiences and those compositions represent the power and the limit of our creativity.

Linear vs. Lateral

Your innovative brain thinks lateral. Your logical brain thinks in linear processes. That’s why almost all business tools are built in a linear manner – step by step.  But in recent years one business process has sneaked into our business life: INNOVATION. Yet, this creative process is still handled in a linear way: step by step. For instance “Empathize”, “Design”, “Ideation”, “Prototyping”, and “Testing”.  To make it more flexible, iteration is part of the process but that is still between modules and still not lateral.

Every idea ever created

Knowing how the brain is actually composing, processing, and fine-tuning ideas, has a profound impact on any type of innovation management process. Today, we know that every idea ever created, was a composition of past experiences. Our brain cells or neuron cells can not create any new idea from scratch. We also know that brainstorming has never created a single disruptive business model. We know that disruptive innovation takes on average 6 weeks to create. It will not happen on any hackathon weekend.

Deeper insights are provided during the education programs of the BlueCallom Innovation Management Academy.

Let us now explore the 10 things that change with Neuro Innovation.

1) Lateral Thinking

The good news is that we do not need to train anybody with lateral thinking. It is an integral part of our brain’s superpower. All we need to do is creating awareness of what exactly lateral thinking is and how it behaves. Simply speaking, instead of looking at things in a linear process (step by step | learn and repeat), we look at things in parallel and don’t repeat or iterate until it works. When you drive a car you steer the car, look at the street, once in a while in the rear mirror, on the speedometer, hear music, keep an eye on the remaining fuel, look at the scenery – all at the same time. Your conscious, sub-conscious, and motoric minds, work all in parallel. When you watch movies, you follow the story, wonder if certain things are possible, manage emotions, listen to theatrical music, and more.  When you THINK – any thought – you do that in parallel. When you “create”, meaning build and craft anything your brain works many tasks in parallel. Lateral thinking is a very fast back and forth of thoughts, verifications, and more.

Innovation is taking lateral thinking to perfection.

Attempts to make innovation, in particular ideation, a linear process is a perfect way to kill the outcome. The major episodes in the innovation process are linear and one builds on top of the other, but within the episodes, lateral thinking is the way to go. And one group of humans does it pretty well: startup-teams.
Creating a lateral thinking environment.

2) What should we innovate?

Instead of watching competitors – a far more effective way to innovate is to watch customers. The first question an innovation team should have an answer for is where and for whom they innovate. We know that disrupters could come from anywhere and can change the way an industry segment does business in just a very short period of time. But there is absolutely no magic involved. They simply found out what the respective audience has trouble with – whether they can articulate it or not. So why not do the same for your business? Moreover, you sit right in this market. The best way to find out is to conduct very specific research in your market. No questionnaire and no interview with countless questions. Just a well-guided casual conversation.
Creating leaders not followers

3) Innovation instead of improvement

instead of settling with improvements – focus exclusively on disruptive innovation. In our research, we discovered that the only difference between searching for a disruptive innovation versus settling with an improvement is the time and the way we interact with our brains. So there is no reason to accept an improvement if you can get to disruptive innovation. The first step is to get rid of brainstorming. While brainstorming was a great first step in leveraging the brain in the ideation process, it produced only very obvious ideas. And instead of hoping for a great idea that may strike you like a lightning bolt – our brain is able to get to amazingly disruptive ideas over a sequence of sessions that stimulates new and different searches. The final composition with a highly diverse team can be reached in 4 to 8 weeks of very specific exploration tasks.
Getting truly creative literally and laterally ;) 

4) Leveraging thousands of ideas

Instead of selecting one or only a few ideas from brainstorming – Neuro ideation produces thousands of ideas and idea pieces during a project. You will want to use them all – and you should. A complete disruptive innovation concept has never been just a single idea. Aggregating thousands of inputs including idea pieces, opinion, customer feedback, and research data can no longer be managed with colorful stickers and whiteboards.  You will need computer power to capture all the data, rate and rank them, sort and store them, and finally, analyze them. Looks like work but billion-dollar businesses do not come for free.
Creating full concepts not only ideas

5) In-market idea validation 

Instead of random experimentation in a lab – validate the “idea-success-fit” in your market. There is no better validation than exploration sessions with future clients. The added value of having your audience not only help validate the idea but also help shape it to the real-world application is priceless. To this point, there was not wasted a single penny in prototyping, experimentation, or testing. And please do not fear that somebody can steal your idea. Only weak and obvious ideas can be stolen. Little improvements can easily be stolen, so keep them for yourself – but please do not call them innovation.
Not wasting time, nor money

6) Innovation comes with team diversity

Instead of working only with experts – assemble a highly diverse innovation dream team. Having more of the same experience is of no value in innovation. But having a greatly diverse team brings far better results than the best expert team in the world. Experience diversity is the new order in innovation. On top of all, involve your customers and business partners in the process.
Producing the best possible outcome

7) Market born products

Instead of building prototypes and testing them in labs, use a unique “market born” product design method.  A Minimum Viable Product (MVP) that shows only one feature is more important than a shiny but mediocre improvement. There is no lab that can compete with real user experiences. A lateral collaboration model with your customers and early adopters is bringing you more insights faster than any internal team ever can.
And still – no funding needed so far

8) Innovation financing

Current estimates show that 90% of innovation projects won’t make it to get funding. And the more innovative and disruptive a concept is, the less likely the approval to go forward. This, theoretically insane behavior, stems from the way disruptive ideas get perceived. In particular, finance people are conservative thinkers. Therefore, at last, one finance person should be part of the innovation team. Collaboration with the finance department on a bi-weekly cycle is highly suggested. Also here, neuroscience is an important guide on how to involve the executive bench in innovation projects to prime their thinking with what you are doing. Keep in mind that the next billion-dollar product line will need maybe a 100 million and more investment over time. To get such a financial commitment, the innovation management system must provide an extraordinary set of data to be able to defend an innovative concept. The fifty most innovative businesses from the past 20 years consumed more than $500 Million in funding before they became profitable. And investors worked with the management team on a weekly or monthly basis.
CFOs need relevant financial data – and learn to be an investor

9) Innovation to market

Instead of conventional market introduction, leverage neuroscience to select perfectly matching early adopters for creating a successful path into global markets. Innovative products will NEVER be purchased by 75% of your customer before the first 5% of early adopters got very excited. Most industry segments fail to innovate even with extraordinary solutions because they never had to do this in the past 20+ years. When IBM decided to go with an innovative computer into the market, they created a completely autonomous company: the “red IBM” but still did not manage to really scale it.
What every startup does due to the lack of a customer base

10) Executive level reporting

Executives need to understand every process in an enterprise – no matter what. And the way this is done today is simply through data. The Deep Innovation Design process, when run with the corresponding software provides on average 25,000+ data points to analyze and feed an entire KPI framework. When moving from LINEAR to LATERAL thinking and corresponding methods, we gain an incomparable amount of data. The data ranges from real-time budget consumption along the way, various timelines such as Time-to-Innovate TTI, Time-to-Validation TTV, Time-to-Market TTM, and ROI data that may be even dynamic based on the progress. The data also deliver qualitative data such as Ideation-Network data measuring the degrees of ideation connections and ideation stacks as well as quantitative data like idea contribution volume, contributor network size, or idea validation levels and volume, and more.
Neuro innovation and lateral thinking are the two keys to profoundly different innovation data.

10 things that change with Neuro Innovation

All in all, some of the topics in Neuro Innovation have not even been part of the conventional innovation processes, so that means no change, only additional learning. In other words, we don’t touch existing neuro pathways but help build new ones. Summarizing the new ones:

  • What should we innovate?
  • Innovation Financing
  • Innovation-to-market

Neuro Innovation is a key factor in ideation, idea validation, innovation financing, and innovation-to-market processes.

Deep Innovation Design Training

All the above is part of a new, one-week training: Deep Innovation Design Champion starting Feb 22
See the full program here:

https://bluecallom.com/bcdm-training/

Innovation is no serendipity – Earth is no disk. :)

 

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xwpadmn

4 Strategies to Foster an Innovative Work Environment

Innovation_at_Work
What can be done to make your organization more innovative?

The COVID-19 pandemic is changing the rules for conducting business. Now more than ever, innovative behavior is one of the essential characteristics that a company needs to develop in order to stay competitive in the changing economic landscape and new trends in consumer behavior. In order to keep your customers happy or attract new customers, the introduction of new business services, products, or processes will be the key to ensuring your organization’s future success. So, how do you foster a working environment that supports innovation within your organization?

In this post, I’ll discuss four proven strategies to enhance the innovative dimension of your company.

1) Embrace a ‘Freedom to Fail’ Culture

Let’s consider 3M, a multi-billion dollar American company, as a shining example of an enormously successful company that is known for fostering an innovative work culture by allowing employees the Freedom to Fail. As pointed out by Art Fry, the inventor of the Post-It Note at 3M, companies that wish to empower the innovative minds within the workplace need to provide freedom to employees: the freedom to fail and freedom to learn from the missteps.

The lesson that freedom can open the door to innovativeness can also be applied to the design of job roles. 

As research shows, flexible job roles can engender more participation in innovation. For example, If you are in the position to hire, instead of creating a bulleted and rigid job description, consider providing room for the next person you hire to mold their responsibilities as they grow into the role. When given the space to think outside-of-the-box of a job description, people will notice opportunities for innovation that they might not have recognized otherwise. The idea is to support everyone in your organization on the quest to identify areas of innovation and provide the space for exploration. 

2) Promote Cross-Functional Communication

When it comes to innovation, cross-functional collaboration in the workplace leads to a greater exchange of thoughts and expertise that can spark the creation of novel ideas. As Gary Hamel said, “too many companies define themselves by what they do rather than by what they know”. Bringing cross-functional teams together to solve company problems is one excellent way to tap the innovative potential of your organization. 

Multi-disciplinary collaboration and coordination are necessary for a new business idea to succeed in concept development and become an innovation. Companies with siloed business departments face an extra challenge in implementing new business concepts since the responsibility to produce innovation is split across different units. If these units experience poor communication, the odds that a new product or service is quickly (or successfully) brought to market are marginal. Both cross-functional and open communication are critical to fostering a culture of innovation in the workplace.

Next, we’ll dive deeper into the importance of differing perspectives when it comes to innovating. 

3) Spark Creativity through Diversity

Creativity includes more than innovation, but innovation inherently includes creativity. At BlueCallom, creativity is treated as the ability to compose ideas by searching the mind for correlations between various lived experiences. Being creative allows us to develop novel concepts. In order to foster an innovative workplace, individual creativity should be celebrated as an organizational resource. It is no secret that when people of different backgrounds and skill-sets are brought together, they can collectively generate great new ideas.

But, what is actually happening through this exchange that enables the creation of potentially breakthrough ideas? Creative abrasion, which is described as a process where different, sometimes clashing, perspectives are integrated (Source: HBR). In a nutshell, this means that in order to cultivate a working environment that leads to innovation, it’s absolutely critical to avoid an innovation monoculture of experts.

At BlueCallom, the Innovation Dream Team is a stage in the Innovation Journey which supports your team to assemble a diverse group of people to support your innovation vision. BlueCallom’s neuro innovation management software will help guide you through this team assembly process with a focus on diversity. 

Regardless of how innovation is handled in your organization, whether it’s a separate unit or a decentralized program, ensuring that people with diverse backgrounds and starkly different approaches are included in the innovation generation process is a productive step towards building a culture of innovation. Unleashing creativity through the diversity of thought is key.

4) Implement an Innovation Management Process

How do you get from a great idea to a tangible innovation?  The answer lies in designing a process that supports innovation within your organization, in other words: innovation management. It’s proven that having a structure and a set of common guidelines in place supports innovation. 

While most existing innovation process models are catered to producing incremental innovations, meaning modest improvements to existing products or services,  BlueCallom has developed a twelve-step innovation methodology with the goal of generating breakthrough innovation. The core of the BlueCallom innovation methodology lies in the ideation process and a technique called Neuro Ideation. Neuro ideation is a brain-stimulating ideation process that unlocks ideas by harnessing collective creativity from individual experiences. To learn more about neuro ideation, you can check out this webinar or this blog post. 

Are you interested in more actionable insight into managing innovation? We welcome you to explore our Deep Innovation Design online course. 

Thank you for reading! Is there any strategy that has worked well for your company that was not mentioned here? If so, please add your comment.

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Axel Schultze

The End of Brainstorming – Beginning of a New Era

The end of brainstorming – it never led to groundbreaking innovation.

This post was inspired by a direct question for me on Quora. Over a year ago, I was asked a similar question.

Question: “How do successful companies manage the influx of ideas and choose top-notch ideas for inventing new products?“

The answer “forced” us to build the first Neuro Innovation Management Software, BlueCallom! We realized it will be the end of brainstorming.

The end of brainstorming - opening up to an all new perspective

Hubble-Telescope Credit: Nasa

A loaded question. Almost like “how do we deal with the size of the universe and select where we want to do research?” We had amazing telescopes – but thinking outside the planet earth and building Hubble was a major breakthrough in many ways.

Answer: The influx of ideas and its selection.

Who says we have to make a selection? Think Hubble – look from the outside. We have to realize that all disruptive businesses we come across were built from pieces of ideas. If we select only a few – it will probably never survive just because we limit ourselves. More detailed questions needed to be answered:

Do we really know how to create a disruptive idea?

Once I realized that I couldn’t answer the following question: “How do you determine if there is an innovation at the end of the process?” we ended up building a Hubble for Innovation. We needed to leave the comfortable sessions, talking about thinking outside the box, thinking big, bold, open blah blah blah… and find our Hubble – Neuroscience.

The pictures we saw were more than spectacular!

We took the ideation process even further and deeper and stimulated an avalanche of idea pieces. In one project, we worked with 25 executives of a large airline, producing 25 x 30+ idea pieces = 750 idea pieces in one process (2 weeks of Neuro Ideation). Since we wanted to assess all ideas and use as many as we could, we ended up needing the computer and a few algorithms to help sort and rank it. Another project consisted of 600 managers from a large pharmaceutical company. We estimated that we aggregated roughly 18,000 idea pieces, of which we also want to take as many as we could. We had to admit, neither our idea collection mechanism nor our algorithm would be good enough for that task; so we decided to build a “machine” (software) to run the show.

Building “OUR” Innovation Hubble

There is no way I can describe all our insights from Neuroscience. However, our core discovery was: “Every idea ever created by a human being, was composed of past experiences.” Meaning we can’t “create any genuinely new idea.” In other words, hoping for ideas to compete in the innovation race is like dancing around a fireplace and hoping for rain. But that is what innovation labs do today.
The day we began to question all that, was the day we realized that innovation could be a logical, manageable and highly success-oriented process.

We’re almost there – currently beta testing. First, “self experiences” almost killed us, putting our own long-term vision on its head. It was even beyond our own expectations.

Neuro Innovation Management and the end of Brainstorming

1) No more limitations – The end of Brainstorming

Don’t limit your golden nuggets (ideas) because we all have been conditioned to a process called “Brainstorming.” While brainstorming was a great start, it never created groundbreaking innovation, and today we know why. Get your team from Brainstorming, yellow Post-Its, and whiteboards to a deep dive into Neuro Ideation. The depth of your ideas will be as different as the depth of the view from Hubble. Instead of ending a brainstorming session with a few “best ideas” leverage them all. Instead of making brainstorming the core of your ideation process, give your brain time to take a deep dive into past experiences, and come up with far more relevant concepts. Neuro Ideation is a two to three-week process and requires a needs and dreams analysis with your market to be prepared. The results will be stunning no matter how creative you may think you are.

2) Tools for things we can’t handle

Remember that we all built tools to overcome our physical limitations. So we need to build amazing tools to extend the limits of our idea process. It brings a truckload of valuable idea pieces. And when we think in that direction, it opens up a whole universe of innovation relevant aspects. We call it Deep Innovation Design.

3) Never forget the innovation purpose

You need to ask yourself some of the old questions: “What problem do you want to solve? Who do you want to innovate for? What value will you provide? 100% of the answers to those questions come from our customers. With Neuro Innovation Management, we can stimulate groundbreaking Innovation on Demand. Our “Innovation Hubble” already showed us pictures that we couldn’t imagine seeing before. We eventually realized that we have to start every innovation project with an “Innovation Opportunity Discovery” project.

P.S.
We feel like Pythagoras when he explained that earth is no disk – when we say “Innovation management is no serendipity,” declaring the end of brainstorming and the beginning of a logical, manageable innovation process.

I hope it gives you some inspiration.

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Axel Schultze

Big Five Innovation Types

Innovation is an extremely counterintuitive business.

For most people outside the innovation space, Innovation means radically new or significantly improved products. Interestingly enough, product innovation is the least successful model. There are various ways to innovate. Highly successful and radically disruptive innovations today come from business model innovation. For instance, in my old company, Computer 2000, we changed the business model for tech distribution from the ground up. With our tiny startup in the 1980s, we took on competitors of multi-hundred million dollars in revenue. It looked like the chance to survive is exactly 0.00%. Today it is a $37 billion business leading the tech distribution in the world. And still, most competitors did not notice the difference and why we could become a global market leader. It was a business model disruption that went unnoticed. Another example is Airbnb. The company caters to travelers’ needs to stay in a more individual apartment or house instead of a small room in a hotel. Hotels, however, perceive the competition as a price war since there are less expensive apartments too. The hotel industry managers, who never understood the competition, fought back with legal acts and did not compete on the service. As a result, they never brought their services in alignment with customer needs. Zappos, an online shoe dealer, changed both. Their business model and commitment to organizational innovation. Soon thereafter, they also started an experience innovation project and became a great example of multi-facet innovations. Let’s explore the big five innovation types.

The Big Five Innovation Types

Obviously, the topic can split even further. Still, we realized that these five innovation types need different approaches, different methods, have different financial or operational impacts, and call for a different innovation team composition.

Product Innovation

Focused on the product side. This is the classic way to innovate and the most obvious to be recognized by the market. However, it is also the easiest to copy and to outperform quickly. Product innovation offers room for different degrees of innovation like a profound improvement of a product that changes the way users work or introduces a radically different product that may change a whole industry segment. Competing with product innovation is oftentimes done by starting a price war, and very quickly, the innovator may be forced to reduce pricing, increase marketing effort, or take a much longer time to grow market share. Alternative products as such innovation can quickly substitute product innovation is the most obvious, the most visible, and the fastest to understand. In the past 20 years, business model innovation, experience innovation, or organizational innovation continuously won over product innovation. Probably one of the best examples is the automobile industry. Companies fight on the product level: electric motor or combustion engine. One company, Tesla, does not lead on the product level but uses one of the hardest nuts to crack, multi-facet innovation.  On the surface, it is, of course, the electric car. But when looking under the hood, not literally speaking, it is the business model innovation, the organizational innovation, and the experience innovation that makes the company the market leader despite having a much smaller production volume. While the global awareness for Tesla was achieved with its super fast and wide-ranging electric car plus its early engagement in autonomous driving, the whole wide-angle view of the Tesla management, including building the charging stations and the gigantic innovation on the battery side, came from an organizational innovation thinking, the way the cars can be configured and ordered and how easy it is to understand what a user gets is part of the experience innovation, the whole pricing pressure, initial losses and ways the cars get sold is part of the business model innovation. No other car manufacture in the world was so innovative on all fronts and took the automobile no longer as a single product – but a part of holistic user experience. Another example is Microsoft. It’s no news that Microsoft never invented a single product. The operating systems, DOS, and Windows have been acquired, and so were all the office products, the SQL server, and other tools acquired. So one could say Microsft is the least innovative tech company in the world. All they did is integrated all the products and sold them under their own brand. Many are still not fully integrated – 30 years later. Instead of putting all the resources, time, and money into building the solution, they needed to fulfill the vision they acquired. Microsoft’s real innovation is to create a user experience through integration and seamless exchange of data that nobody else saw as important. Nobody else did as well as they did. The experience innovation did not need a product but an architecture. The other innovation was a business model innovation. From the very early days, they committed not to build their own computers but pushed computer manufacturers to use their software. The non-compete commitment from Microsoft was compelling enough to get an exclusive commitment from the computer vendors. And knowing that all the office apps will need their operating system was good enough to give the OS away for peanuts. Business model innovation and experience innovation were strong. Understanding how the company operates and what they offer was so confusing for most competitors that nobody cracked their dominance – till today. As we will discuss other innovation types in the following posts, you will see the difference of those innovation types relative to the ‘good old’ product innovation. You will see that product innovation is not going away – it’s still an important part of an innovative business. Product innovation is becoming a commodity – but is no longer a differentiator.

#ProductInnovation

In the next parts, 2, 3, 4, and 5, we will go into the other innovation types details. Here is just a quick snapshot to put the above in context.

Experience Innovation

The most effective way to innovate, only recognized by users and communicated through advocacy. Experiences include general customer experience all the way to entire entertainment solutions such as theme parks or highly interactive restaurant types, and lately, space travel. Experience innovation is very hard to copy and very hard to compete with. Usually, it takes highly creative minds to piggyback on a concept and develop a different model that makes the experience unique.

#ExperienceInnovation

 

Business Model Innovation

The most successful way to innovate with a big impact on the industry. Typically, business model innovation goes hand in hand with experience innovation. It is the hardest innovation type for any competition to copy, even to compete with. Changing a business model is hard enough for a business to develop – it takes years for the competition to emulate and follow. Business model innovation has been the most successful type of innovation in the past 20 years. The biggest number of business model innovations emerged from the US.

#BusinessModelInnovation

Organizational Innovation

Innovation within the organization, mainly for process acceleration, customer experience, resulting in increased profitability. It is tough to copy (if not done by consultants), making it very hard to understand from the outside and even the inside. Organizational innovation often requires a deep injection of new processes, different employees, and often a different management team. In large organizations, hundreds or even thousands of people may be affected by organizational innovation when they cannot unlearn and learn new ways of conducting their work. One question quickly rises to the top: “Is innovation killing jobs or the wrong team killing innovation?”

#OrganizationalInnovation

Structure Innovation

Supra-Enterprises, companies bigger than 25,000 employees, seem to have the hardest time creating truly ground-breaking innovation. In particular, in the western world, Top Executives, boards, Investor representatives, Unions, Industry associations, local government representatives, and maybe more have to agree on creating a new leadership structure to bring innovation forward. Inventing disruptive solutions often require major changes in the current teams as skills and experiences may shift significantly. Disruption in the automotive, energy, food industry requires knowledge and deep experiences in those industries not only on the enterprise side but also in external structures. A startup as a small company can go under the radar – a public company cannot.

#StructureInnovation

Learn more about the General Innovation Type Differences.

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Axel Schultze

Neuro Ideation – Step by Step

Intelligent Neuro Ideation

When understanding how our mind composes and processes ideas, we must ask how we can leverage those cognitive abilities, control them, influence them, and improve our thinking skills? The Neuro Ideation method is the first step in that direction. Every idea created is a composition of past experiences. This understanding based in neuroscience is the foundation for Neuro Ideation – a technique that goes far beyond brainstorming.

Experiences are Innovation Silver

There is no more relevant experience owner in the market than our customers. The value of the “Open Innovation Theory” is now scientifically proven. The Innovation Opportunity Discovery method uses that knowledge and helps identify the biggest innovation opportunities and provides the inputs to turn the inputs into groundbreaking innovation. For that very reason, represent customers as a strategic companion in any market-facing innovation project. We should add a diverse set of customers to our ideation process. If we compare it with climbing a big mountain, we are now at basecamp, together with our customers.

1) Brainstorming

The oldest and still not a bad starting point for innovation is Brainstorming. However, a typical brainstorming session takes about an hour and brings the most obvious ideas forward. Our energy-conscious brain does not go very deep into analogous situations, let alone into distant experiences. It also won’t weave more complex experience networks to produce rather exceptional results. At the end of most brainstorming sessions, the team is already exhausted but finds very cool ideas, and most of the team is excited. The team’s excitement stems from the fact that most of them could comprehend the best idea right away. Those obvious ideas get usually selected as the best and processed further. This means that almost everybody else will understand them, and some could easily replicate those ideas. They may become nice improvements, but never true innovations. But we reached camp 1 on our quest to go to the top of the “idea mountain.”

2) Post Brainstorming ideas

Almost everybody had already experienced that in the following days after brainstorming, participants of such meetings come with new ideas – often better ideas – in the following days.  However, most teammates consider those “latecomers” as distracting and fear that the ideation process will never get done and turns them down if more come. This is rather unfortunate because the brain continues searching for more great ideas. But since we did not know how our mind works, we turned it down.  Assuming that we are looking for truly groundbreaking innovation, we will let the brain continue to work for 48 hours and allow brainstorming participants to add those ideas into the innovation system whenever those ideas seem to be very relevant. And this is just the beginning. At this point, we reached camp 2 on our trip to the mountain top.

3) Analogous experience connections

When we have enough time to think about problems, our brain has another powerful tool: analogous experience search. It does that by taking the results from past thinking and tries to find similar but unrelated experiences. That means that our brainstorming was a good first step to stimulate the brain to find various alternative situations that would normally not come to mind. For most of the past 2 million years, we needed our brain to survive, circumvent danger, and save ourselves from far more powerful animals and other risks. Decisions needed to be made fast. And an obvious idea was just right. But there was also time to muse. In that time, the brain was able to search deeper and wider, had more time, and could come up with completely “useless” questions like what this space up in the air could be. Time to think was and still is one of the most valuable times for our minds. Today we use it to purposely reach further in our neural networks for solutions that are definitely not “obvious ideas.” The compositions of our obvious ideas with analogous ideas are producing already far better results. We can say we reached camp 3.

4) Post analogous idea development

And like with the first brainstorming result, the ideas, augmented by analogous ideas, are growing over the next 48 hours. Interestingly enough, we learned that our mind is not looking for more analogous ideas but different connections in our “past experience” repertoire from our own experience.  Our mind searches for verification during that process if the analogous ideas are really in synch with our original problem. Simultaneously, it looks for variations of the idea in the context of the analogous situation. In BlueCallom, we were using extreme sports development and how it evolved to find a parallel to our current development, understanding how our mind can become significantly more powerful when we understand how it works. At this point, we are reaching camp 4 on our ideation journey.

5) CallomBurst

We are calling the next phase “CallomBurst.” We are taking our ideas to a level where the solution is most likely impossible to realize. We are asking ourselves what would the perfect solution look like in 100 years. What would this solution look like if resources, financing, and time would be irrelevant? The word “Impossible” is banned from the discussion. We are getting to ideas that would be literally unconditionally ideal. We want to reach the limit of possible perfection. Only if we are at the limit, we know nothing can compete with our vision. And the purpose of the CallomBurst is to create the level of impossibility. It can become our vision, with the understanding that we may achieve it over the next 5, 10, or even 50 years. That vision will differentiate us and our idea and doable concept from the rest of the industry. Even if our biggest competitor uses the same technique, they cannot come to the same vision but will have a different vision. And that means a different company with a different goal. After the CallomBurst, we reached our 5th camp, and the last before the summit.

6) BlueCallum Summit Day

A few days after the CallomBurst, the team climbs the last piece of the journey and recaps all their experiences. The final and impossible idea continues to entertain our minds, and it creates a picture of where everything we have worked on could end up. BlueCallum Summit Day is where the visions are shared with everybody. On that day, it may fuse to an overall vision for the team and the company. That vision will be clearly unique and become the disruptive and innovative concept the company may want to realize. Obviously, the product would not exist on day one. But it gives the whole solution a long-term direction that will be a reality one day. This direction may encompass the development of an innovative concept that is the product of Neuro Ideation. But everything that will be available in the first version of the new product will be an innovative and disruptive solution from day one.

To learn more about neuro ideation, you may want to watch our Webinar Recording.

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Axel Schultze

Why do we think so boring LINEAR?

During school and later in business 90%+ of humans become unknowingly and with no bad intention from others an ever more linear thinker. Everything – and I mean everything – is structured in the next 3, 5, 10 steps to do this or that. Moreover, after we see positive results from that mechanism, we even ask: “What are the 3 most important steps to do this or that” or “the 5 most important activities, getting to this or that result” and so forth. When you look at the Question and answer board, “Quora”, hundreds of people ask for the three most important skills an entrepreneur should have, not even wonder, if “skills” are needed in the first place. When getting older you hold onto your 7 steps of “anything” that had been most successful throughout your life. Entering a completely new job is terrifying for most people because of ONE FEAR: There must be more than the top 10 steps to success. Yes, we intuitively feel that it is more than that. But we don’t know. All we know is step by step or linear thinking. Moreover, nobody ever really taught us any different way. But we absolutely can. Being change-averse stems from our simplified education to become successful – step by step.

Do we need to think lateral to be innovative?

We have to break one of the biggest rules in our education or in our business lives: to think step by step. As we started to think of methods and techniques to leverage our born ability to be creative, we needed to break something that seems to have nothing to do with innovation: Breaking Linear Thinking. Once we began to address that issue we realized how severe the damage is in our innovation management theories, methods, and even technologies when going by the “step by step” model. The next problem was to educate people to think lateral. After trying to tell people how the brain composes ideas from previous experiences by having some of our 86 Billion Neurons connect in new ways with each other – could not come and train them in lateral versus linear thinking. Teach how to think is the hardest training in the first place – so we had to find different ways. The theoretical answer to the question is yes, you need to understand how to think lateral. A far more practical solution however is to experience the results. This goes back to our analogy between the greatest thinker in the world and the most amazing athletes. Both achieve amazing results by using their body in a perfect way – without necessarily knowing each action in each microsecond of their doing. We wanted our innovators to not think how they think but literally “see” idea streams and focus on the idea, not on the mechanics of your brain.

BlueCallom Canvas Explained

The objective is: to “see” the state of activity in a lateral representation. We use a pattern that our brain is actually using as well: One part of the information in our thinking process comes from the right half of our brain, the other from the left. A very powerful apparatus, the Corpus Callosum sits in the middle and not only connects the two brain halves it also helps negotiating the idea pieces. And it is the “messenger” between two halves that tries to make sense from the rational impressions and gets the feeling from the other halve. This is why we arranged the fields in a nonlinear and actually lateral arrangement. Left is what is (rational) – right is what we could consider “creative”. We work on both sides and get to the middle where the signals – the messages – from both sides get negotiated. If in the middle is no agreement we need to go back to the rationale and see if we considered everything and go to the right side and see if we got the best possible outcome. Once we got the first set of information in phase 1 and some good ideas in phase 2 we bring the core summary in the middle. When verified with the inputs from phase 1, in nearly 100% of the cases, the team goes back to phase 2 and fine-tunes whatever they have here. Once satisfying, the needs or requirements etc. get collected, and the haves and wants weigh in. At the end of the episode, a decision shall be made on how to move forward. For simple processes like in a business model canvas, there is not necessarily a decision to be made. But in a ‘BlueCallom’, an entire innovation project, which may take years to complete, the earlier key decisions can be made the higher the success potential or the earlier the whole process can be stopped before it needs serious investments. Instead of verifying and iterating after major milestones, we do the iteration WITHIN EACH EPISODE. It saves time and cost and more importantly it accelerates the act of innovation.

Lateral thinking is necessary, yet we don’t need to focus on BEING lateral – instead, SEEING  the process in a lateral way. 

 

This is why and how we say goodby to linear thinking. A lock-stepped process, going from one to the next, until we finished would be a linear thinking process. We find error or imperfection in either process. BUt in the linear process far too late and it is far too expensive.

The Corpus Callosum has been so inspiring for us that it gave us the name for the company – Callom as short form and the blue from the technical representation of this genius part of nature.

 

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Axel Schultze
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From experimentation to “Innovation on Demand”

The Quest for more Innovation

In the last five to ten years, pretty much any business and any government was pushing for more innovation. But if somebody was asked “How do I innovate? Tell me to step by step”, there was no tangible answer. When I was asked that very question, in particular, the “step by step” part, it daunted me, that there was simply no answer that could satisfy this question. Tens of thousands of consultants help people to “open their mind”, other use the “design thinking” model to process ideas – actually very well. But the question remains: “How do you CREATE those innovative ideas on-demand” in the first place – so you can then process them in any of the models!

Innovation on Demand

Innovation was an accidental event – a combination of many instances, experiences, and the brain pushed out an idea. In some cases, those ideas have been big enough to warrant starting a whole new business. But today, we have a situation where we don’t want to have an accidental brain flash leading to a possible innovation. In times where we have a crisis, we actually would want to have solutions on demand.  But as long as we don’t even know how ideas are created, we are far away from creating ideas on demand.

Maybe the Biggest Shift in Innovation History

Neuroscientists helped me understand that human beings are not really creative – we can only COMPOSE ideas from past experiences, from whatever we saw, heard, felt, and so forth. All our daily experiences are actually get associated with existing experiences and create some interesting IDEAS of which we actually don’t really know. The biggest idea machine is our mind when we sleep. There is much to explain but the net of it is: We are not creative and we create ideas by the millions. So what is the problem?

Our historic evolution, our culture, our education, and our brain itself poses a problem: It is conditioned to allow only the most obvious and the least demanding ideas to pop up. Only one in a trillion or less is actually making it from our right brain to the left and stimulates communication between the two, which forms a “thought” that may break through all the other barriers. And once we understand that process, we have the foundation for creating innovation on demand, like we create a house or bridge or something as simple as a paper plane.

Deep Innovation Design – PoC

in 2016 we began our first careful attempts to help startups to come up with disruptive business models. What was thought to be a “one of a million” chance, turned out to be better than 50%. Half of the startups in that, for us historic batch, we’re creating a disruptive model – on demand. They created what we call a “Disruptive Moment”. Disruptive moments are the part of a business model that will push competitors to change their course in order to catch up with these startups. It was the first version of a Prove of Concept (PoC). In the past two years, we went deeper into the “mechanics of our mind”. We learned what we needed to actually DO to play with our billions of neurons and synapses to form those innovative ideas. After two years of work, we found an early concept that works well enough to come up with an innovative solution, whenever we want. It was in itself an innovative concept to create innovation. We called it the “deep innovation design method”.

Four ‘T”s, one “M” of Deep Innovation Design

1) TALENT
We need people who have a “talent” for creating innovation. Very much like others are talented to play music, paint pictures, drive race cars, cook amazing meals, create fashion, help others or simply entertain people. Talent is the ability to play with ideas, seek experiences, are least pre-conditioned, reject conformity, create their own rules. We have millions with that trait. Almost any toddler has that talent until we press them into a societal system that unknowingly suppresses that talent, but it is still there – hidden. Do you remember: “Don’t be so childish”, “you are a dreamer, be more realistic”, “Focus, learn your lesson, you need to repeat it tomorrow in class.”

2) TEAM
Like a music band, or a football team, innovation is a team sport – if you do it alone you end up waiting for accidental ideas. And one of the most important players in the “Innovation Play”, are the affected people: Customers, users, victims. If you start the game without them you are doomed to lose. And if your actors (innovators) are all of the same trade, you will lose as well. Diversity is the magic formula. Understanding that part makes it also very obvious why enterprises CANNOT be innovative. They try to surprise the customer with their ideas instead of co-creating an experience. And their ideas come from a monoculture called R&D centers, engineering teams, or other experts. And finally, the decision-maker, who may not be able to ‘experience’ the idea in their mind will need to reject the idea. It almost couldn’t be worse. We learned that ‘innovation’ is one of the most counterintuitive activities humankind is conducting – yet mother nature is pushing it out wherever she can.

3) TRAINING
Our brain is an old machine with lots of upgrades. More upgrades than any other organ in our human apparatus. It is also the most adaptive body part. To overcome some of the 300,000-year-old habits and some even go back 5 million years, we need to train our brains. I often wonder how long our children would crawl if we never help them to walk. We need to train our bran in opening a treasure chest that is heavily guarded by about 200 million nerve strands or Axons, our so-called Corpus Callosum.
With good talents, a great team, and well-defined techniques we actually can. And that is the beginning of “Innovation on demand”.

4) TOOLS
You know the saying: “I think my head explodes”- right? And that is always when you reach your capacity limits of learning or thinking, or comprehending – or – innovating. In an interesting way, it’s all the same. For the last 12,000 years, we experience this more and more often and we have built more and more tools and ever bigger teams to deal with exactly that problem. We have yardsticks to measure distances much easier than computing them in our brain. We build cranes big enough to lift the weight we need to lift without architecting it over and over again. And today we developed tools, methods, and finally technology that shall help us to go through this rather demanding process called innovation. And guess what – it is no different from what athletes perform in their contests, musicians on stage, race drivers on the street or on the water, and so forth. Both athletes and innovators, can easily loos one or two Kilo of body weight, during such processes. When I processed complex ideas or learned entirely new things rather fast, I fall asleep, equally exhausted than after a 20 km run (12.4 miles). Our brain can consume massive energy! That energy consumption is of extreme importance to know when we try to get groundbreaking ideas out of it.

5) MARKET
Here is when the rubber meets the road. There are an estimated 100 Million patents in drawers that have been never used. It shows that the initial value of innovation, even patented is exactly ZERO. The value is only and exclusively created when an idea gets executed, brought to life, and into the market. The value then grows with the size of its distribution. We can be as innovative as we want – if we cannot make it available to a market or the market is not interesting, the value remains to be zero. In the end, sales channels, creative marketing, service and support organizations, transport (and if it is the Internet) are key to the success of any innovation. This success is seen best when we look through the macroeconomic lens: A company creates a product. It is sold through distribution and dealer channels, it is shipped across all oceans, it is serviced locally, maybe education organizations provide training, maybe consulting companies help apply the product. At the same time, new ideas pop up from companies that build add-ons to that product and create even a market extension. All of a sudden a company with 5,000 employees actually creates 50,000 indirect jobs. That innovation is clearly valuable. The worst of all versions is to create a valuable idea, get a patent and then not only not use it but prevent anybody else from creating it. It is a crime on society – stealing an advancement, just based on self-interests.

How to start from here

On April 23, the BlueCallom Group who worked on the Deep Innovation Design Model for four years is providing a free online seminar (webinar) and explaining how the Deep Innovation Design Model works, where you can get trained and how you can create innovation on demand. The World Innovations Forum is providing training programs and support in emerging countries and is able to provide stipends for talented innovators to learn how to be extremely innovative.

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Axel Schultze

From Invention to Innovation

https://www.motorauthority.com/news/1111403_the-2018-mercedes-benz-s-class-drives-itself-off-the-production-line

 

In the past four years, we were attempting to understand how innovation is actually created and analyzed how we were building startups that became ten years later billion-dollar companies. We were also exploring how other startups that became billion-dollar companies created their ideas and successes. We found striking insights about the difference in innovations power between startups and established billion-dollar enterprises – who were startups themselves just a few decades ago. Also, we explored the difference between invention and innovation.

From invention to innovation

The automobile evolved from INVENTION to INNOVATION. The disk brakes moved from INVENTION to IMPROVEMENT. The first electric BMW car made it from INVENTION to an EXPERIMENT, while Tesla made it to INNOVATION without even having it invented. A self-driving Mercedes S-Class made a 1,000-mile journey from Munich to Copenhagen and back in 1992! It was already using computer vision and computers to react in real-time. The autonomous car achieved speeds exceeding 110 miles per hour (175 km/h) on the German Autobahn with nearly no human intervention for 95% of the distance. It drove in traffic, executing maneuvers to pass other cars. Also, here, all the necessary inventions have not been taken to innovation but ended up in drawers. Analyzing the reasons is equally complex and interesting but exceeds the purpose of this post. We will do this in another post.

Invention vs. Innovation

In most enterprises, we may find hundreds if not thousands of geniuses with fabulous ideas but no way to go. There is this massive difference between INVENTION and INNOVATION. INVENTION is the act of having and documenting an idea, maybe building a prototype, and perhaps even being granted one or more patents. Unfortunately, the invention is of no value at all. Bringing such an invention to market, scale the business or business unit and make it a global success is when we talk about INNOVATIONS. The full cycle of invention, prototyping, market validation, product-market-fit, funding, marketing, testing, producing, launching, more funding, branding, selling, customer engagement, servicing, business model optimization, more funding, going international all the way up to being a global player in that segment is a successful innovation. Innovation is neither a product nor service nor the marketing or sales effort to make it big – INNOVATION is the result of a series of activities, engagements, teams, and market conditions that lead to groundbreaking new solutions for a larger group of users.

The value of innovation grows with its distribution!

The good news, pretty much every large enterprise on earth is struggling with being innovative. Even enterprises that came just two decades ago with highly innovative solutions to market, now struggling to be innovative. The bad news, more innovative startups, than ever before in history challenge any size enterprise. The question arises: Is the lifecycle of the innovation, the future lifecycle of a company in general?

The five biggest mistakes

  1. The company never developed a comprehensive plan to identify the brilliant ideas, which their employees already created, usually based on their experience with the problem. Inventors are mostly not communicative managers but more introverted engineers!
  2. Seeing the brain spark of an invention already as innovation and wonder why it is not successful in this highly competitive global economy.
  3. Completely ignoring the fact that innovative businesses require a lot of funding to become that innovative business everybody is dreaming about.
  4. Running innovation alongside and hoping for magical growth and market disruption.
  5. Management teams never asked themselves where these ideas are actually coming from and how they can be harnessed.

What to do

  1. A great starting point is to see the act of invention as an ignition point that triggers a comprehensive process of innovation.
  2. It is far better to develop trust in the “Innovation Potential” of the company’s employees than looking into startups.
  3. Rationalizing that any major innovation is also a significant investment, and there is no difference between a startup and a global enterprise.
  4. Creating a serious effort to include customers into the innovation process and stop looking at what the competition is doing.
  5. Stop hoping that employees think like startup entrepreneurs. If they would, they would be long gone, and if they stayed, they much better contribute to an enterprise-level innovation process.

We will share more findings and more insights as we progress.

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Axel Schultze

Progress in Innovative & Disruptive Thinking

Our First Accelerator Program

When we launched our first Accelerator Program, in San Francisco in April 2014, little did we know that we may end up as an innovation development organization? While we had great successes helping our startups thrive, and were named one of the top 100 most influential accelerators in the world, already one year later, in 2015, we noticed that our unique and methodical approach gave us an enormous advantage over all our competitors.  Unlike most conventional accelerators, our program was scaleable. Even though “methodical approach” didn’t sound right in a fast-evolving startup ecosystem – it is one of those counterintuitive things about disruption in general, which made the real difference. Our accelerator was in a similar way disruptive like all the four businesses we created before. After discussions with other accelerators about teaching disruption, it seemed to be equally odd. How can somebody teach disruption when each disruption is taking an entire industry onto a radically different course and nobody has seen anything like that before?

In 2016 we began to work on our first accelerator flight to create disruptive business models. We looked for the key characteristic of disruption, how can one become disruptive and how can somebody come to a disruptive business model idea. In our 2016 accelerator, we managed to get 5 out of 8 participating companies to create a disruptive business model. This was a totally unexpected success for us and our teams. When we started this program we were hoping to get 1 out of 8 to come out with a disruptive business model.

How is innovation really created?

Approximately 2 years of research and continuous observation of our own thought processes got us ever closer to understand certain mechanisms how our brain gets to ideas and how ideas are actually formed in our brain. In 2019, we began to realize that methodically guided thought processes show far better results than the random ideation and brainstorming processes. It felt a bit like the difference between randomly hitting piano keys and hitting them in a structured order. And we also realized the analogy was deeply grounded in the very mechanism of innovation. Musicians, actually do not call their process a creation but composition. And we learned that also innovation is no real creation but a composition.

However, when hitting keys, we see our hand, get haptic feedback and kind of know how we move our hands around. But we don’t really know – yet – how we trigger our roughly 86 billion neurons and trillions of synapsis. We learned that those neurons are not statically connected to each other but can dynamically “rewire” themselves. That means our 1,000 Trillions of network nodes are a masterpiece of information aggregation and dynamic association. In a nutshell: Ideas get formed based on dynamic connections of our neurons, which in turn carries information that we accumulated one way or the other from the moment we have been created as an embryo.

To build an analogy to a computer, we don’t need to know the billions of transistors in a CPU and all the connected chips and devices – all we need to know is a programing language to develop code that know where to go. Very similarly we need to know a language or method that triggers the brain’s trillions of synapse through their neural networks. With that understanding we started to model ways to create innovative and disruptive concepts with an astounding high success rate. Getting a glimpse of an understanding how the brain works was an interesting step in understanding innovation creation.

All this is just the very beginning of an amazing journey to come.

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