June 6, 2006

Innovation Brain Freeze

"Brain Freeze" is the headache you sometimes get when you consume too much ice cream or cold drink too fast. I think that "Brain Freeze" can happen with innovation.

For example - How many focus areas for innovation does your company have? Five, ten, twenty five? Microsoft has seventy this year.

Steve Ballmer, Microsoft's CEO gave a talk to the
Sanford C. Bernstein Strategic Decisions Conference on May 31st. This discusison was with an audience of investors. Innovation was a consistent theme by Ballmer. Here's a snippet:

"When I first talked to Bill Gates about this [areas of innovation] and some of our other senior technology guys, Ray Ozzie, they came back with a list of, I don't know, 70 things. I said, Bill, you can't have a list of 70 things. He said, but there's 70 things, Steve. And I said, you've got to pare it down. He said, no. And we finally agreed, we'd clump them. And really I also pointed out that with an R&D budget that's going to come on $7 billion, we could probably afford to do 60 or 70 different things."

In most organizations 70 focus areas with 3 or 4 times more in numbers of projects can cause "innovation Brain Freeze." One of the core value creating principles for all projects and initiatives I undertake is to ensure that my clients' people manage at most 4 projects at the same time. My experience is that even if a person is assigned 10 projects/initiatives, they almost always settle on the 4 or 5 that they like most. The balance of items get relegated to "I'll get to it sometime" status.

So here is the most scuccessful company in the world, a multi-billion dollar enterprise saying they have 70 things that tally $7 Billion. Can it be done? I tend to agree with Ballmer that Microsoft can because of their vast resource pool.

But what do you do if you're a smaller business without the funding to do whatever you want from an R&D perspective? How many innovation areas should you set for your organization before it gets "brain freeze"?

I'm a believer in doing 4 things incredibly well vs. spreading myself thin over 15 things that end up being done poorly. So one answer is to get more done with less. But that's too simple an answer. Here is a list of things you can do to understand how many innovation focus areas your organization should have:

  1. Take inventory of all current innovation focus areas. You will be surprised how many things your team already is working on. "Innovation Brain Freeze" may already have set in;
  2. If you find a lot of areas, use Ballmer's approach of clumping (categorizing) projects to get a high level view for your company;
  3. This step should really come first but in a lot of companies the impulse is to just get busy and "do it!" . Successful innovation cannot exist without a clear strategy. The organization must have a core vision or mission to guide its innovation investment strategy. For example - a software company's mission could be to become the leading ERP company if that's their area of expertise. Lets assume this is done for your business. You next should ensure that every project, every dollar spent is consistent with your mission. If its not then changes need to be made and quickly.
  4. Pull your management team together to scrub/justify each focus area as a final step. Make sure your financial people are included to ensure that you can afford all that innovation.

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