For years, Ron Adner has heard about the same problems from clients with the same questions for him as an innovation consultant, chief among them being the age-old puzzle of why some seemingly great products fail while others succeed.
How was Apple able to succeed with the iPod when other music players whose designs were just as interesting and that did all the same things as the iPod failed to take off? Why did Amazon's Kindle find acceptance while other e-readers sat on store shelves? Why do so many great products fail, even though it appears that those behind them did everything right? The list of failures is large, but so is the list of successes. It was clear to Adner over years of research that the difference between failure and success wasn't about product design or being first on the market with a new product -- witness Apple with its penchant for entering markets late and then owning them in a short time.
"If you don't know how to look beyond your own innovation, you're setting yourself up for failure," said Adner, whose new book 'The Wide Lens: A New Strategy for Innovation', explains the tools that he has found that consistently work to drive success. Key among them is to first understand the interdependence involved in success, with suppliers, distributors, retailers and customers all playing a role in the innovation and product ecosystems. Looking at all of those elements is the "wide lens" that Adner refers to in the book, which was published recently by the Portfolio imprint of Penguin.
Failing to take any one of them into account, viewing them as anything less than co-innovators, is a recipe for disaster. "It won't matter if you've created miracles," said Adner, who is also an associate professor of Business Administration at the Tuck School of Business at Dartmouth College in New Hampshire.
The process that leads to success seems trickier than it really is, in his estimation. "It's tricky if you don't know the trick," he said. "The way I try to lay this out is to say that when people think about innovation what we already know to worry about is to satisfy the customer and great execution. This is all necessary, but when we collaborate, that's not enough for success." And all innovation these days necessarily relies on collaboration.
The book explains, complete with diagrams, how innovation and product ecosystems work and interact, and why it's critical to understand "that your success now depends not just on your own efforts but on your collaborators' efforts as well," according to the introduction. "Success in a connected world requires that you manage your dependence."
The first requirement is to identify what other innovations must successfully occur for your innovation to work. The iPod and the Kindle are good examples. Steve Jobs understood that before the iPod could be a success, the music management software - iTunes in this case - had to also be ready to go. Likewise, leaders at Amazon understood that e-readers would only take off when a critical mass of content was available for download - content they could provide easy access to from their site, which people were already accustomed to using.
Then comes the second requirement, which is to assess the "adoption chain risk", asking who else needs to buy into the ideas behind the innovation before it gets to the customer. In the examples of Apple and Amazon, music and book publishers were part of the proposition.
A failure to execute on either of those two requirements will lead to failure, Adner has found time and again.
In the case of electronic health records, for instance, the concept isn't going to really take off until doctors more fully buy in to the usefulness of digital records. Also hampering that effort in the US is the government's "blunt stick" approach to forcing e-record usage through legislative mandates. "What they didn't do was mandate compatible systems on the IT side. That's the omission that will haunt us for decades," Adner said, adding that the foot-dragging on the part of health-care providers to move to digital records shows why government sometimes needs to take a leadership role, while the failure of the actual e-records legislation equally shows the importance of government understanding the system it's trying to implement.
Research In Motion is another case of a company that has failed to successfully manage its dependence throughout its chain of innovation. For years, RIM's BlackBerry had the enterprise smartphone market cornered. Its phones weren't anything fancy, but they served their core market of people who need quick and constant access to their corporate email on a reliable network. Then along came the iPhone (and eventually Google's Android, which has also capitalized on RIM's stumbling).
"I think that the real problem for RIM is that they never were an ecosystem player, they were always in a biosphere," Adner said. "They had the network and the phones, but those were always under their control. I think they just lost sight of what their strategy really is. They, like everyone else, when the iPhone launched laughed it off as just one more rival. But when things got hot and the iPhone began to take market share, they panicked. They allocated a hundred million dollars for their app store. That's nuts. They lost sight of what their core market is." Among their core enterprise users "apps are a complete waste of time" with scant difference between the choice of thousands of applications and a few popular ones.
That's why the BlackBerry App World has "450 different apps for making farting sounds," Adner said. Enterprise users are not likely to need more than one such app, if any. "They tried to out-Apple Apple. That's a losing strategy. Not just for RIM, for everybody."
In Adner's opinion, Apple's success is not about its enormous apps store in the first place.
"I think people have misattributed Apple's success. The iPhone was not successful because of the app store. For me, the iPhone was successful because it was the next iPod," he said, combining the features of the music player with those of a smartphone. "Rivals didn't understand that. Users did, but the rivals didn't. They saw the touchscreen, they say the app store - but neither one of those was the core to Apple's success. The great product is not the point. That's why I wrote this book. People look at success and often they generalise the wrong bit. If it was just an academic exercise, you could say, "Well, you just missed the point," but for people in these companies, it's not an academic exercise. It's their lives, it's their livelihoods."
Now that his book is finished, Adner said that he more and more sees wider applications to the logic behind it and the approach he recommends. "The logic applies not just to physical products or high tech - innovations are everywhere in an organization," he said. "For instance, when you're putting in a new budgeting procedure that's going to require some kind of reconfiguration and the more aware you are of what changes you're trying to push through in that ecosystem, the more you can be aware of what you need to do to be more successful and more efficient."
Succeeding involves the same two steps he finds are necessary in any process of innovation, identifying everyone who has to be involved for such a change to work and the possible places of risk in that chain.
"Innovation is hard, but this approach will make your hard work more likely to pay off. The causes for failure that I look at are not the usual things," he said. "If you don't know how to look beyond your own innovation you're setting yourself up to fail. There are ways of looking beyond your own innovation and you're crazy if you don't use them."