Innovation and the importance of 'fail fast and fail cheap'
Innovation has been a major factor in the growth of productivity in the U.S. over the past 50 years, and for businesses and countries the world over it continues to grow in importance.
So says Andrew Taylor, partner and managing director at Boston Consulting Group. Taylor, who heads up the firm’s innovation strategy practice,gave the keynote address late last week at the 2014 Product Development and Management Association-UIC Innovation Doctoral Consortium at the UIC Forum.
The weekend-long conference brought together academics, industry thought leaders and doctoral students from around the world. The goal: to shine light on the importance of fostering innovation.
For companies and countries to compete globally, Taylor said, they must embrace innovation and strive to reach the rising standard against which world-class organizations are measured. To do so, they’ll have to cut the “waste” built into traditional innovation processes and learn from others who are doing things right.
“Innovation is inherently a creative process, done well,” Taylor said. “The key is how do you fail fast and fail cheap.”
Taylor said U.K. grocery chain Tesco exemplifies this by testing many product ideas — from virtual shopping in South Korean subways to in-store bike shops — and using failures to drive consumer insights. Projects that Taylor calls “zombies” are those that don’t produce valuable outputs, and he said they must be killed off lest they strain organizational resources.
Outputs are the dominant factor in measuring innovation and most often used to determine whether a country or organization is winning, Taylor told Blue Sky after the talk.
In the context of the consortium, Taylor said academics can be valuable in pushing innovative thinking. But to truly benefit from innovation, he said academics must partner with companies and venture capital firms “to take those ideas and have impact in the marketplace.”
Such collaborative partnerships are valuable to all parties involved in innovation, including startups, venture capital firms, corporations, government and academic institutions, Taylor said. The key question for small companies is getting access to established organizations; incubators are doing a good job facilitating those connections, he said.
For companies that aren’t in those incubators, Taylor said venture capitalists can provide a way to connect to corporations.
“We’re good on the big companies,” he said about Chicago venture capital. “We’re getting better at the small companies. The venture capital is not at the level that we need, but it’s growing rapidly.”More details