The Post Mortem Tool
Quick Refresher – This post aside, the primary goal of the blog is to distinguish the practice of entrenovation from entrepreneurship as a practice. These practices employ different skill sets that are applied at different points in the total life cycle of a business.
Long ago the oil & gas industry eliminated similar semantic confusion by recognizing the difference between exploration & production activity and refining & marketing operations.
The new practice, then, is the Practice of Entrenovation. It carries all aspects of #innovation. The practice includes the search for new ideas, the development of the idea, and the arrival the of developed idea at the intersection with entrepreneurship, where it becomes a business. Read more about the need for communication clarification.
Oil & Gas Analogy
By extracting entrenovation, the practice that includes innovation, from entrepreneurship the current confusion can be eliminated. And yes, a person could wear both hats, just not at the same time.
Identifying innovative ideas
The search for innovative opportunity should not be viewed as a fanciful pastime. A purposeful systematic approach focused on opportunity rather than risk will yield more success than waiting or searching for a “bright idea”. The identified opportunity should be market driven, take advantage of the entrenoveur’s strengths, interests and knowledge, and be justifiable as a development project. To advance the idea, the founder(s) must be satisfied development of the product or service will result in an economically viable solution to a problem, including an identified well researched market
When an enterprise employs innovation in its growth plan (as is advised) available resources will influence the approach utilized. Regardless of the chosen approach, the practice of entrenovation requires the enterprise to formalize a corporate program, commit to and provide appropriate resources to the initiative, and to monitor progress closely.
Several sources of possible opportunity
First, dismiss the myth that enterprises do not innovate. Obvious examples, among many, that have been successful at innovating include 3M and Apple. Interestingly, many larger companies have not succeeded as innovators when they strayed too far from their core businesses. For example, during the 1980’s, many mature companies unsuccessfully attempted to enter the personal computer business. An example of a company that suffered the innovative success of others, was Rim-Blackberry. Innovate or shrink, and possibly die.
Sources of innovative opportunity can be classified as being:
- Internal to an enterprise – Examples include development of new but related products and improvement in production systems. Internal sources may be the least risky to pursue.
- External to the enterprise – Examples include demographic and social trends or changes.
- A bright idea – The hardest source to come by and the riskiest to develop. The general advice is to start small, work hard, get big. Before the recent SpaceX success, how many people knew the venture was started by Elon Musk 15 years ago?
Success rates associated with new ventures will be the subject of a later post, or two.
The Surprise Failure – an internal source
As we all know the “best plans” do not always work out. The post mortem of a failure can however give rise to excellent innovative ideas. The following example is a personal favourite.
During the early 1950’s Ford Motor Company (“Ford”) realized it had a competitive hole in its product line that it could fill with a new vehicle. Following significant research and design efforts, in 1958 Ford launched the Edsel passenger vehicle. Famously, at great cost to Ford, the brand failed and was withdrawn in 1959.
Given the significant effort involved in the development of this new brand, the company and pundits were hard-pressed to identify the reason for the failure. Through research and analysis Ford determined the post-World-War II social upheaval resulted in significant changes in tastes and consumption patterns. Evidently the Edsel was not suited to that new reality.
Undaunted, and armed with its post mortem findings, Ford refocused its efforts and in 1964 addressed the new reality with the introduction of the four-seater quasi sports vehicle named the Mustang. It has been argued the Mustang was the most successful new vehicle launch of all time. Out of failure a great success was realized.
This account of Ford sifting through the ashes for the Phoenix is interesting but it may be a bit stylized. Other descriptions of the Edsel history are not necessarily so kind and do not always support the notion suggesting Ford was so astute. Regardless I believe the story serves the purpose of demonstrating how a great innovative idea may come from a failed, sure-fire business proposition.
To the point…
A current example of possible similar success being realized out of failure is Lyft, the ride sharing company. Before reincarnation as Lyft, in 2007 Zimride was introduced as a long-distance ride service that conglomerated passengers. It was a “dud”. The pivot took place and in 2012 Lyft was born. Very recently (March 2019) Lyft filed an IPO with an inferred corporate value of $20 – $25 billion. Many of the shareholders likely view this as success, but as always is the case, time will tell if it is a business success.
Mind your way