Innovation

Grant Leboff: Shaun, one of the things you talk about in the book is companies that miss the necessity to keep innovating, to continuously innovate. I’m just wondering, because I think it’s a good thing to say. I think most people would agree, “Yeah you’ve got to do that, but how?” I think a lot of companies just not set up in a way to keep thinking along those lines. Where does one start with that?

Shaun Smith: It probably touches on some of the things that we’ve talked about already. Which is, when you’ve got that clear purpose what that does is to create a focal point, a compass direction which in itself stimulates innovation. If you know where you’re heading, if you know where you want to get to, then it starts to stimulate ideas about we can get there better, faster, more effectively or whatever. That’s the first thing. The second thing, as we’ve talked about, is involving customers. When customers buy into your brand and you involve them they also stimulate innovation.

To give an example of, I think, one of the most innovative companies around today is Tesla. Elon Musk, the founder of Tesla, feels passionate about the environment and about trying to do things more in a way which is more with less environment impact. That has lead him to innovate in space travel. He is one of the very few organizations that is actually providing privately funded space travel up to the space station.

It’s stimulated him to launch his new Tesla 3, which was launched a couple of weeks ago which is this new kind of electric car. A quarter of a million people put down deposits in the first week. Incredibly successful launch of a new vehicle. He’s going to change the nature of the automotive business, absolutely change it. He’s also innovating new forms of transportation which we won’t go into now. The point being, that it’s because of that clarity of vision, that clarity of purpose, that all of these things are coming in turn.

Grant Leboff: It’s interesting, because you talk about Tesla. Obviously, a lot of people will know that as a case study. One of the things you point out in the book which I think is very important is that it’s not just about the big innovations. Is it? It’s about innovating in small and big ways. When you’re looking at continuous innovation not everything is going to be massive. There’s going to be small things that organizations do. How do organizations think about innovation in small ways? I think that people very often when they think about innovation automatically think about big ideas. Don’t they? It’s kind of where the mind goes.

Shaun Smith: If we take a very small example JCB, which is the digger manufacturer … Industrial vehicles manufacturer, Sir Anthony Bamford, the chief executive of JCB is famous for walking around the factory and looking at the vehicles on the product line and just tweaking perhaps one of the hubcaps or something like that just to make it perfect. JCB has such a strong view, such a strong value about high quality that that just drives everything they do. That is an incredibly small gesture, tweaking a hubcap in order to achieve that. You might say, “Well that’s not really an innovation at all.” I think it’s when you add all those things up that it leads to innovation.

For example, JCB identified a gap in the market for a military grade digger. If you’ve driven behind a bulldozer or a backhoe digger you know they’re pretty slow things. You wouldn’t want to be driving in a military war zone driving one of those things. They identified the need for a highly manoeuvrable fast military grade digger. They said, “Okay, that’s what we’re going to do.” How they innovated was they went out to break the world land speed record using a diesel powered car. They put two backhoe diggers engines into it, tweaked it a bit, took it to Utah salt flats and broke the world land speed record. As a result of that launched their new military grade digger which was very successful.

Grant Leboff: We talk about sort of living the purpose and being driven by the purpose. We talk about looking at the small little changes that can be made. Is it just those two things? Is there anything else as well that needs to be taken into account?

Shaun Smith: I think it’s also changing the processes in the organization. Innovation really is a process of continual change. As you say, it’s the big things, it’s the small things. It’s the process of change that allows you to be successful. The problem with many organizations is they want to keep everything the same. They want to control everything. Control leads to inflexibility, it leads to status rather than actually change. I think it’s also about allowing people the freedom to make changes in the organization in the interest of the customer, in the interest of the organization and be willing to fail. If you want to be perfect, if you want to control everything and minimize risk you’ll never do anything differently. It’s being willing to make those changes.

A good example of that is in financial services. There’s a huge amount of regulatory pressure, compliance in the banks. As a result of that most of the high street banks say, “Well, actually no we have to do it this way because we can’t open ourselves up for risk.” The most innovative brand in financial services is Metro Bank. Metro Bank have done some things very differently. They still have to adhere to the same regulations and compliance, but they’ve done it in a way which insulates the customers from that. It’s all kind of behind the scenes. They’re able to create a very different kind of experience as a result.

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