Business Case Studies, Executive Interviews, Sam Kogan on Innovation

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Executive Interviews: Interview with Sam Kogan on Innovation
November 2006 - By Dr. Nagendra V Chowdary

Dr. Sam Kogan
President & Chief Operating Officer of GEN3 Partners

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    When you perform benchmarking it gives you clear picture of where you stand against competitors, for both existing technology/products/etc., and for the future. If you combine benchmarking with a welldefined main parameter of value, then it can help you to focus your innovation efforts. However, this can only happen if you keep your eyes on the ball in terms of clear understanding of what innovation is significant improvement along main parameters of value. When it comes to benchmarking, it is important that a company looks at where others have been on the main parameter of value.In turn, the companys direction should be understood and

    committed to creating that movement, to being the leader.In todays world you cannot excel by only copying what others are doing. This is not just a danger, it is a death wish.

    If anything, properly done and interpreted, benchmarking should provide clear reasons and incentives to innovate. Remember, your goal is to move away from the pack and benchmarking can demonstrate how and if this is being achieved.

    However, classic benchmarking should and can be improved. At GEN3 Partners we bring some new features to benchmarking. We see that it is necessary for everybody to do. The world is flat and developments are going fast. Cross-pollination from other industries is a fact of life. What GEN3 Partners adds to the picture is that we not only compare products and technology from the same industry, but we bring things to a functional level so that we can borrow techniques, approaches and existing functions from other industries. For example, lets say we are looking to find the best batteries. First, we would first think about what batteries actually do. A battery provides a source of electrons. We then in turn ask, what else does this do? From that we can identify that super capacitors, fuel cells, micro turbines, fly wheels are all sources of electrons and of energy. We could then identify if there are functions in a fly wheel that could improve how a battery works. Many people may say we cannot compare fly wheels and a battery. But not only can we, but in fact we should. If the developments in the fly wheels excel, my batteries could be obsolete.

    The underlying question regarding benchmarking is that it is too boring a subject for cool innovators. My point is quite different. Innovation should be a discipline, and the first step is to understand where you stand and that is what benchmarking helps to deliver.

  • In your consulting experience, have you noticed any resistance to change when you have suggested some organizational changes to promote innovation culture?
    Yes, I have. Resistance to change is always around it is human nature.

    There is nothing you can do to hide from it. The real question is what to do with this resistance. From my experience there are some simple rules that can help in that situation.

    First, give people a clear answer to their natural questions. People will always ask questions regarding the why, how and what in terms of change. If you donot give people clear answers to these questions they will always resist. And the best way to answer is to give people results. You cannot just talk about the benefits of innovation; you have to show the results.

    Second, scare people. Fear is a big driving force of change. Scare them by showing them what is going to happen if they continue resisting and killing innovation. Show them what Chinese can do at cheaper prices. Show them statistics, for example, that only 20%-30% of companies on Fortune 500 list were there 15 years ago. Show them how different functions in the company disappear because they try to live in the past.

    Thirdly, get a senior executive who buys into the idea and have him or her to show ultimate support for innovation. This is very critical. Sometimes people are afraid to do something or resist change because they view it as just a musical chair. They donot believe that senior management can meet it to do it. It is important that the company show its commitment and have a leader at the company to spearhead the effort.

    Finally, be persistent. Its natural to show resistance to organizational changes; so, be clear why the company is choosing to promote an innovation culture. Show people across the organization what it will do for them, the pitfalls they face if they donot follow, get senior support involved and be persistent.

  • Should innovation exercise be outsourced to consultancies like GEN3 Partners, IDEO, etc., or should it be developed as one of the key functional areas of management?
    First of all, a company needs to come to an agreement that innovation is the last resort that would allow it to stay competitive and achieve sustainable growth. Once companies come to this understanding, then the next step is to begin an innovation effort.

    Many companies come to realize that they cannot rely anymore on getting it done cheaper, or in holding onto all the best people and resources or in counting on customers being loyal to the brand. Once they realize that all this is true, they can see that innovation is the answer. From this standpoint you absolutely have to develop innovation as a part of company life. And you need to have professional innovators that work for you.

    The split between outsourcing to professional innovators like GEN3 Partners or IDEO, or to do it inside, really depends on the internal culture and the specifics of the company. My advice is always the following: eventually you want to be in a situation when you give your toughest innovation challenges to the best professional innovators but keep building your internal competence.

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