Building a Better Innovation Business Model
Whether you’re a professional innovator or someone driving innovation to grow your business, chances are you need more support to get projects delivered to market.
Question: Does your innovation business model catalyze your goals or crush them?
When You Have To Deliver, You Learn To Deliver
In 1999, Jim Collins wrote a brilliant piece in the Harvard Business Review, “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 devices that translate lofty aspirations into concrete reality.”
His article provided some poignant examples that span a wide range of industries. For this discussion, I’ll break his thesis down into a simple analogy: 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)
Our company translated this into a performance-based compensation model that provides 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.
Making the Leap from Idea to Marketable Innovation
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 breakthrough 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.
Skin In The Game
The power of performance-based compensation is directly transferable to any innovation initiative. Giving people a material stake in an outcome will significantly increase your chances of succeeding.
Because when people need to eat, they will come up with brilliant ways to catch a fish.
Sometimes even without the dynamite.
This video outlines benefits we’ve experienced with performance-based compensation:
Pete Maulik is Chief Operating Officer at innovation consultancy Fahrenheit 212 in New York. Fahrenheit 212 delivers bigger ideas, faster to market.