How to Eat an Elephant: are innovations the space technologies or ways to find simple solutions?

Originally published in Mind.ua

When you run a business, the pressing tasks can hold back an opportunity to understand abstractions. At the same time, you need to keep up with the times, as competitors will never be forgiving if you miss. At this point you understand what actually "innovation" means, and here it goes - ventures, startups, R&D, blue oceans, design thinking, hypotheses, agile, user experience, etc. In short, either it seems that this is a kind of rocket science for Masks and Jobs, and definitely not about Ukrainian realities, or you just feel like an ignoramus, since from the first or even tenth try it is quite difficult to sort through that chaos and unstructured information.

Can we not take care about tomorrow?

Innovations arise when we think about tomorrow, that is a sort of self-reflection like "what will happen to our business if...". For example, if we do not move to cloud accounting or digital marketing, if we do not improve product quality or operational efficiency, if we do not introduce new technologies, etc. In other words, innovation is about finding better solutions in existing processes and products, and only after that about creating new ones.

Complicated and Expensive vs. Simple and Cheap

It so happens that almost at reflex level we perceive the word "innovation" as something very complex, expensive and risky - some sort of black box or a game with super high risks that cost a lot of money. And no wonder, since we hear from everywhere about an American dream based on cases such as Apple, Google, Amazon, SpaceX, or crazy R&D costs of giants like Phillips, Boeing, Samsung etc.

However, there is another dimension of innovation, which focuses on simplicity and minimum investments. In fact, Ukraine is currently developing this approach, when companies are gradually improving the existing processes, product quality and service level.

The main feature of such a simplicity and low cost of this kind of innovations is that they are actually created on the existing business model and proven technologies. That is, the implementation is based more on analytical work, rapid and inexpensive testing of hypotheses and launch of pilot projects.

It may seem that all that is far from our Ukrainian reality, but if we "come up of ostrich position", we can see many practical cases - more efficient business processes and payment system of Nova Poshta, refocus of Privatbank to online banking, full online focus of Monobank, changing business model of Rozetka from a store to a marketplace and much more.

Eat an elephant one bite at a time

First, we need to realize that until we do not learn how to implement quick and cheap all the small improvements to existing business models, products or services, we will not start R&D projects, complex technological or process transformations, or invest in startups.

The same relates to intent of starting the innovative activities to change the culture in the company. People are quite conservative by nature, so by forced changes we inevitably provoke resistance.

This not only leads to opposite feedback and loss of resources (team begins to look for opportunities to prove that innovation is evil), but also often leads to decrease of quality and efficiency of current activities.

Don't try to reinvent the wheel

Second, start with what already works. Focus on improving or even simplifying the existing processes, quality, or functionality of a product or service. On the other hand, pay attention to already existing solutions: most likely what you strive for has already been invented by others, all you need to do is to implement this decision.

You never know what it tastes, if you don't bite

Third, test hypotheses quick and cheap. Do not be afraid of making mistakes, since the main idea of experiment is to gain an understanding, which you will never gain another way. Remember that the more you complicate, the more expensive, difficult and longer you will implement.

To begin with, it is important to learn to act easy and quick, and if the capital at risk is large, it is simply impossible to achieve this, since in this case you will be sucked by a desire to understand an issue "a little more". For this reason, the minimum price for testing simple hypotheses should be as low as possible, within 10-15 thousand dollars.

The Hippocratic Oath 

It is very important not to fall in love with your hypotheses, since it leads to desire to immediately implement them in full. Under this condition you risk losing much more than you gain, because the cost of a failed experiment in an existing business is very specific, as opposed to the likely benefits. Never succumb to such temptation, always pilot tested hypotheses in a limited focus groups.