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The 20/80 Rule for Innovation: It’s All About the Edges

You can’t innovate from the center of the firm. You have to start at the edges (the outer 20 percent) and work your way inside.
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COLLABORATORS Jeff DeGraff
How to push innovation from the edges in

There’s a reason people use terms like “cutting edge” and “leading edge” when describing innovations. If it’s not edgy, how innovative can it be?

Yet organizations often err by trying to innovate not at the edges of the company, but at the center. The reason? The center is where decision makers reside. If you think of organizations as bell curves, the center — the inner 80 percent — is something like a stable middle ground, writes Jeff DeGraff, professor at the University of Michigan, on the Management Innovation eXchange site. The two extremes of the bell curve graph — the outer 20 percent of the organization — are the risky edges of crisis and exceptional opportunity. “The farther away you are from the center of the company, both physically and emotionally, the more likely you are to seek alternative ways of doing things.”

That’s why DeGraff argues for the creation of a “20/80 rule” to innovation: “It’s easier to change 20 percent of your organization 80 percent than it is to change 80 percent of your firm 20 percent,” he notes. “Work your innovations from the outside in.”

Innovating from the center — instead of at the edges — is one of DeGraff’s “Seven Deadly Sins of Innovation Leaders.” From all seven sins, one theme emerges: Stop researching, and start doing. “A sure sign of a company that is stuck in the planning phase of innovation is the incessant collection of data,” he writes. “Planning is important, but learning from real experiences is more so.”

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THE PLUS

In their Harvard Business Review article, “Why Most Product Launches Fail,” Joan Schneider and Julie Hall tell how, “after years of marketing research, Coca-Cola launched a midcalorie cola called C2.” It flopped.

It was a tweak from the center, rather than an innovation from the edge. The years of research didn’t help. Only after doing instead of researching — launching C2 and watching it fail — did Coca-Cola learn enough to develop Coke Zero, the no-calorie, full-taste drink that succeeded.

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