If you are an entrepreneur or manager looking to create a new business, you may feel like there aren't many tools to help you succeed. But if you look a little harder, or you have been around the innovation space a bit, you may already be aware of a surprising number of perspectives. Design thinking, lean startup, customer development, business model generation, discover-driven planning, scamper, agile software, and the list goes on. You would have to read dozens of books and articles to assimilate it all. Wouldn't it be easier if we could just tell you which ones you should use to help you succeed?

Before we explain which to use, let's first address a basic assumption we are making: you should avoid using most of the tools that you used in business school. We explain why in our post about why a DCF, business plan or forecast may totally screw you. The basic reason is that most traditional management tools are designed for execution not exploration, for optimizing a known problem not discovering a new problem to solve. Entrepreneurs that use the wrong tools almost always struggle and most often fail. We need a new set of tools for innovation, tools to manage uncertainty

To understand these tools, we (my coauthor Jeff Dyer and I) set out to understand how some entrepreneurs and established companies are able to generate, maintain, and revive their innovation premium: one measure of a company's ability to create new value through innovation. The measure itself, which produces Forbes list of most innovative companies, is less important than what we were searching for: is there a process to manage the uncertainty of innovation? We investigated how entrepreneurs and managers repeatedly create value through case study research on companies in four groups: established companies that maintain high innovation premiums after founding (ex: Amazon, Google, Regeneron, etc.), established companies that lost their innovation capabilities and regained it (ex: Intuit, Hindustan Unilever, P&G, Mondelez, etc.), successful startup innovators (ex: Qualtrics, Motive, Rent the Runway, etc.), and innovation failures. We also investigated the many emerging perspectives on innovation, like the lean startup.

We discovered what tools are recommended by thinkers out there and what tools successful innovators use and found the following surprise: although each perspective sounds a little different, they are all actually describing the same innovation process, with a little different lens and a little different emphasis. For example, while design thinking excels at discovering customer problems, it tends to under-emphasize discovering the right business model. Similarly, while the lean startup emphasizes the minimum viable product to understand the right solution for customers, sometimes adherents to the perspective overlook the question of whether they are solving the right problem. In other words, like the proverbial story where each blind man feeling the elephant describes part of the elephant, we found that each of the perspectives makes a valuable perspective describing part of the elephant but that by combining these perspectives, and showing how innovators are applying them, we could take a first step towards an end-to-end model of innovation.

We describe our first pass at such a model in our book The Innovator's Method, but we usually refer to the method in the lower case, because we didn't make it up: we simply brought the puzzle pieces together. Figure 1 depicts the model and how the many ideas out there apply to each "stage" of the innovation process.

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I use the word "stage" since of course in practice, entrepreneurs often start at different points in the model. For example, you may already have a technology or other solution in mind, but have you addressed the problem stage? Although the model might seem obvious, there are some incredible subtleties and traps buried in the model that you shouldn't assume away. For example, most innovation begins with an insight--a clue or surprise about the world around you. But it's shocking how many people overlook the surprises around them that are the core of a valuable new opportunity. For example, the scientist who discovered ceramic glass and created the Corning Ware industry was conducting an experiment on glass when the oven misfired. When he opened the oven he expected to find molten glass but instead found a sheet of milky glass. That was the first surprise. But he overlooked it. Fortunately when he went to throw away the glass, it slipped from his tongs and fell to the tile floor where it rattled but did not break. Now that was a surprise! It let him to investigate further and discover ceramic glass, one of the hardest forms of glass in the world used on kitchen tables and in missile nose cones.

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As another example, most entrepreneurs with a solution in mind leap directly to trying to scale up their solution but most fail because they haven't actually discovered what problem they are solving.

For example, consider the case of Merrimack Pharmaceuticals, a company that was attempting to develop a new cancer therapeutic. Many previous companies had attempted to develop therapeutics that more effectively block HER2 receptors. When Merrimack had the insight to tackle the HER3 receptor (insight stage) it would have been the simplest logical leap in the world to the solution stage: trying to block the HER3 receptor. But instead, Merrimack employed systems dynamics analysis tools to address the problem stage by mapping out the entire process by which a therapy enters the human body, travels through the bloodstream, enters the tumor and then blocks the HER3 receptor. Much to their surprise, they discovered that the vast majority of the action was not in blocking the HER3 receptor, but in simply getting the therapy inside the tumor in the first place. Using this problem insight, they were able to develop a much more effective therapy than if they had leapt directly to the solution. Today, Merrimack Pharmaceutical is one of the most promising companies in the space because they apply a different process to innovate: the innovator's method, adapted for the pharmaceutical space.

Although we've provided only a glimpse of the method here, we see the innovators method being used by companies across industries and even government to reduce uncertainty and increase the success of innovation. We hope you can use these ideas as well (here's a link to our HBR webinar explaining these ideas if you want to learn more), whether you are in software or cancer research to build a better process.

 

Post co-authored with Jeff Dyer. Jeff Dyer is the Horace Beesley Professor of Strategy at BYU's Marriott School of Management. He is the lead author of the best-selling book, The Innovator's DNA, and co-author of the new book, The Innovator's Method.