StrategyDriven Expert Contributors’ Blog

One of the best aspects of my role as Fahrenheit 212’s COO is that I’m the first person candidates meet when they’re interviewing for a job. No matter how many people I interview, I am constantly astounded by the ideas they bring to our conversations. Amazing, amazing ideas with clear market opportunities.

Drinks that prevent hangovers.

Athletic clothes that go beyond wicking and actually hydrate.

A service called Dial A Mom that would provide all the services you want when you’re sick –making doctor appointments, picking up your prescriptions, even sending chicken soup. And the best part is the business would be staffed by actual retired moms. They would get paid for doing what comes naturally and sick people would get what exactly what they want at exactly the right moment. Genius!

The point is, great ideas are everywhere. Online, off line, even in a line at Starbucks, today’s culture consists of people who are constantly dreaming up new things that should exist. And as a result, I think most readers would likely agree that the old adage is true: ideas can indeed come from anywhere.

[wcm_restrict]And yet, while they can come from anywhere, most ideas never really go anywhere. Why?

I would suggest it’s due to the fact that there’s a big difference between an idea and an innovation.

Idea vs. Innovation

When you start to explore the difference between an idea and an innovation, you’re (not surprisingly) confronted with a million and one different definitions of the two terms.

An idea is a provocative thought that has the power to inspire action.

An innovation is the result of inspired action. It’s something created that improves life in a manner that’s both quantifiable and sustainable.

Innovations require the catalytic power of ideas. But it’s the catalyzed action that generates the outcomes that change the world.

It’s the difference between concept car and the Prius. Between Bell Labs and Apple. Between Dial-A-Mom and Amazon.com.

When we launched Fahrenheit 212, we set out to create a firm specializing in the creation of new products, businesses and services for our clients that would make this critical leap from idea to innovation.

Ah, The Benefits Of Hindsight

Without question, one of the smartest things we did was to anchor our business model on a performance-based compensation structure. It’s a straightforward approach in which we put 2/3 of our potential revenue at risk based on the performance of the innovations we create for our client.

The decision to link our success to that of our clients was driven by two factors. The first stemmed from Fahrenheit 212’s New Zealand origins where “put up or shut up” is a defining cultural norm. The second was our initial suspicion that potential clients would welcome the idea of a consulting firm that actually had skin in the game.

What we didn’t realize at the outset was that it would be the key to creating successful innovations.

When You Have To Deliver, You Learn To Deliver

In 1999, Jim Collins wrote a brilliant piece in the Harvard Business Review entitled, “Turning Goals Into Results: The Power Of Catalytic Mechanisms.” In it he addressed the problem that many managers face within their organization: they have a big goal but lack the organizational focus and courage to achieve it. Collins offered catalytic mechanisms as a potential solution.

By his definition, a Catalytic Mechanism is “the crucial link between objectives and performance, [the] galvanizing device that translate lofty aspirations into concrete reality.”

His article provided some fantastically poignant examples that span a wide range of industries. But for the purposes of this discussion, I’ll break his central thesis down into an analogy we can all understand: if you’re standing next to a lake and you have to catch a fish to eat, you will catch a fish.

Collins posits that this same philosophy can be applied to business problems simply by framing a firm’s most ambitious goals in this type of scenario:

• Step One: Translate your objective (I would like to catch a fish) into an imperative (I will catch a fish)
• Step Two: Give it real teeth (or I will die)
• Step Three: Get to work (start fishing… with dynamite)

For Fahrenheit 212, our performance-based compensation model provided us with a powerful catalytic mechanism – we needed to figure out how to generate true innovations quickly, consistently and across a wide range of categories.

And in so doing, it gave us a much better understanding of the core tenets of effective innovation.

Money and Magic

In order for an innovation to gain necessary traction inside a company and ultimately within a competitive market, it needs to have two central characteristics. It has to tap into a real commercial opportunity and it has to capture people’s imaginations in a manner that is both unique and compelling. Said simply, it needs to have “the money and the magic.” Without “the money” it won’t likely see the light of day. Without “the magic” it’s unlikely to break into consumers’ consideration set in a sustainable manner.

As simple as this prescription sounds, it’s frequently overlooked. In some instances, a company’s desire to capitalize on a rapidly emerging growth opportunity can overwhelm its better instincts and cause it to rush a me-too product to launch only to discover it lacks the magic necessary to unseat the market leaders (think Microsoft Zune).

Or conversely, a company can be painfully disappointed when it discovers its new magical product hits a gap in the market, but not a market in the gap (sorry Dean Kamen).

The What, The Why and The How

Once it’s clear the innovation you’re creating offers a balance of the money and the magic, it’s important to create an action plan that will enable you to leverage the necessary support amongst key stakeholders within your organization.

Here again, we’ve found that simplicity is an asset. We believe successful innovations can be distilled into three component parts:

• The What: The first step is capturing the lightning in a bottle and expressing it in a manner that clearly defines “what” you are creating that will make the world a better place. The hybrid car. The stain stick. The first detergent in the world that’s so beautiful you actually want to keep it above the sink. The What should be the encapsulation of the inspiration. It’s the loadstone that guides the collective actions necessary to get your vision into the hands of customers. If it’s simple and clear, it will drive action. If it’s not, you run the risk of giving the world the next Pontiac Aztrek.
• The Why: The second step is articulating “the why.” Unfortunately, today’s corporate culture has become a hotbed of risk-aversion. Senior managers across categories are frequently rewarded for their ability to challenge, to question and to advocate on behalf of the devil. And as a result, early stage innovations are often forced to climb a steep hill of inquisition before they reach acceptance. To succeed, innovators need to be able to convincingly yet succinctly defend why the idea they are championing has strategic and commercial power.
• The How: There’s a reason the number of ideas far exceeds the number of true innovations: the lightning strike is just the beginning. Sure the blinding inspiration of a “eureka moment” is thrilling; but in reality, it’s just the first step. As any entrepreneur will tell you, the journey from conceptualization to commercialization is often when the real break-through thinking happens. As a result, it’s critical to have a well-defined understanding of what needs to be true for an innovation to get to market. Once you’ve defined “the how”, the champion should surround herself with lateral-thinking people who can react quickly to new challenges without ever losing sight of the true vision.

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About the Author

Pete Maulik is Partner and Chief Operating Officer at innovation consultancy Fahrenheit 212. He is instrumental in the development, evolution and actualization of clients’ innovation efforts. His experience includes leading innovation projects in the alcohol, technology, FMCG, software, beauty, financial services and hospitality categories. Pete is responsible for unleashing the potential of the Fahrenheit 212 organization. This includes finding world-class people, giving them a structure in which they can perform at their peak and ensuring Fahrenheit 212 is delivering transformational innovations on every project.

Pete has spoken on the power of bringing creativity to business at Columbia Business School, Pace University, American Marketing Association’s Quarterly Meetings, The Art Director’s Club of New York, ESSEC and Fordham Business School.

He holds an undergraduate degree from Harvard and an MBA from Columbia Business School.