5 Questions with Adam Richardson on Innovation
Posted on 16. Mar, 2010 by Editor in Books, Innovation, Interviews
Adam Richardson
Innovation is one of today’s hottest business topics. Numerous Fortune 500 companies are ratcheting up their innovation efforts after years of focusing on bottom line efficiencies. Yet innovation is one of the most widely used–and misunderstood–terms in business and few companies are seeing real results. Innovation is broken and few realize that the problem is the problem.
Adam Richardson, a creative director at frog design, a global innovation and design consultancy, addresses the innovation dilemma in Innovation X: Why a Company’s Toughest Problems are its Greatest Advantage (see more on the book here). The book discusses how business is filled with “X-problems”– a new class of tough challenges that thwart conventional planning, yet still present massive innovation opportunities.
We asked Adam about the X-problems facing companies today and how they can better harness them for more effective 
innovation.
Let’s start with your subtitle, “Why a Company’s Toughest Problems are its Greatest Advantage.” How is a problem an advantage?
Companies across industries are facing the same cluster of challenges, whether they are start-ups or global corporations. First, customers are becoming more sophisticated and demanding, and understanding what they want is harder. Second, many industries and categories are colliding, pitting companies against one another in unexpected and disruptive ways. Third, companies are realizing they need to create ecosystems of products, software and services in order to be competitive, and to satisfy those more demanding customers. These are often treated as separate symptoms, but I argue that they are inter-related and combine to form a new breed of business challenge, what I call an X-problem. X-problems are hard to diagnose and manage, but if faced proactively they present huge opportunities to engage with customers in new ways and create sustainable differentiation.
With so many companies focused on innovation, why are so few seeing any benefits?
A lot of focus has been put on the internal organizational barriers to effective innovation – silos, processes not matched for breakthrough thinking, slow decision-making, and so on. These are real, but only part of the story. X-problems are so complicated they outstrip conventional approaches to strategy planning, leading to confusion about how to focus innovation efforts. Simply cranking up the innovation engine is not sufficient – you will have more innovation efforts perhaps, but effective innovation requires a better understanding of the problem you are trying to solve.
What are some strategies for companies to define their objectives, satisfy customers, and stay ahead of the competition?
There are four integrated methods I describe in the book: Immersion, Convergence, Divergence and Adaption. Because the book has a from-the-trenches perspective on innovation, each method is described through hands-on tools and analytical frameworks that can be applied to a company’s specific situation. To describe a couple of the approaches a bit more: Convergence addresses the increasing need to develop ecosystems. There’s a lot of mystery around ecosystems that I try to clear up, as they can be powerful means for engaging with customers in new ways. Zipcar is a great example of this. Car sharing was previously seen as something complicated, inconvenient, and mainly appealing to hard-core environmentalists. Zipcar changed this perception and give it mainstream appeal by turning it into a service that is fun and easy to use. They did this by converging an ecosystem consisting of many physical and intangible elements, and paying close attention to how each of these impacted the customer experience, ultimately giving Zipcar proprietary advantages that others would find hard to replicate. If Convergence is about bringing things together, then another of the methods – Divergence – is about taking things apart. This is where companies look at how to expand their business domain into unexpected areas by adapting existing capabilities and assets. This is how shoe retailer Zappos created its consulting service for small-business owners, called Zappos Insights. Zappos realized that it could sell two of its well-known assets – its reputation for excellent service and its fun corporate culture – and created the spinoff to do just that. This is a great example of a company that consistently looks for innovative ways to grow and reach new customers.
What companies today are tackling “X-problems” and taking advantage of the opportunities?
Everybody looks to companies like Apple and Google and wants to emulate their success. But there are many other examples out there of companies, even smaller ones, successfully using X-problems to their advantage. Consider the X-problem of the stagnant, unimaginative camcorder category: all the established players were making their devices based on feature lists and had forgotten how and why people shoot videos in the first place. Pure Digital is the startup that created Flip digital camcorders (they were recently acquired by Cisco Systems) and, in a very short amount of time, they became the number two camcorder maker behind Sony. How? By focusing on simplicity, fun, and spontaneity of use, and taking out all the expensive features to keep the price low. Pure created a whole new category and got people using video again.
What are the four basic truths that must be followed in order to implement Innovation X methods effectively?
First, innovation is everyone’s business at a company. One criticism I have of Google’s approach to giving technical staff 20% of their time to work on projects of their own choosing is, why limit it to technical staff? As we say at frog, “ideas are everywhere,” so don’t artificially limit who can contribute. Second, on a related note, talent matters when you are tackling hard problems. At frog we hire less than 1% of people who apply for positions, we are very picky. Investing in talent that can make innovation happen is key. Third, as Albert Einstein used to say, “Not everything that can be counted, counts, and not everything that counts can be counted.” A reminder that the manage-what-you-can-measure approach has its limits when you are striking out into uncharted territory. Lastly, innovation leadership starts at the top. Creating an innovation culture is almost impossible purely as a bottom-up effort. If you look at companies that have consistently delivered innovation effectively, there is someone at the top who sets the tone for doing innovation well. They establish – and live up to – the “panic threshold” for how long radical ideas will be entertained before dropping them, and give the clearance for breakthrough ideas to get their legs.
Adam Richardson is a creative director at global innovation firm frog design, inc., where he has worked with companies such as HP, Intel, Motorola, Logitech, and Yahoo!. His background combines experience in product development, interaction design, product strategy, and customer research. Richardson writes regularly on design and business, and speaks at conferences worldwide. In addition to teaching design and user research, he is a guest lecturer at the Ecole Nationale Supérieure de Création Industrielle in Paris, and at the IESE University of Navarra in Barcelona. Richardson earned his BFA in Industrial Design from the California College of the Arts, and a multi-disciplinary MA from the University of Chicago.
