Opinion: Businesses are taught how to innovate

 In March 2019

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Opinion

By Dan Barkin

In a study room in Hunt Library on N.C. State’s Centennial Campus, Paul Mugge sketches curves on a whiteboard that describe what he calls the three horizons. More than a quarter century ago, Mugge led the group at IBM that created the ThinkPad personal computer. Mugge’s task force was able to cross the so-called Valley of Death, the chasm where ideas often die.

Today, he heads N.C. State’s Center for Innovation Management Studies, a small but influential think tank. His drawing is an illustration of why some companies thrive but many don’t.

“There’s H1,” Mugge says. “And that’s the resources and time you’re allocating to defending current business.” His marker traces a second curve.

“There’s Horizon 2 that builds on that, and that may be the next two to three years.” This might include new products already in the pipeline. And then he draws Horizon 3, “where you’re looking at options.”

“Pure research,” in Mugge’s words, that leads to a new business model, a really blockbuster product.

“But when we go into companies and actually look at their portfolios, all the resources are here in current operations.” And that’s how companies eventually fail.

CIMS has been coaching and researching innovation since its founding in 1984 by Alden Bean at Lehigh University in Bethlehem, Pa. It moved to N.C. State in 2000. Aided by initial funding from Bethlehem Steel, Procter & Gamble and others, Bean and his successors built a network of more than 100 experts in academia and industry to help companies diagnose their cultures, improve innovation management and harness Big Data technology to find valuable insights, markets and business partners. The group remains self-supporting, though N.C. State provides office space.

If you are wrestling with how to grow revenue, the CIMS website provides nearly 30 years of its newsletters — a readable, searchable body of research that explains how to grow. Its experts have learned why most innovation initiatives fail: Patents are not innovations if they never get out of the lab.

Getting a breakthrough to market requires deeply committed senior managers. Innovations require front-line folks who will be champions for big change.

“Culture is everything,” says Richard Kouri, a veteran biotechnology executive, N.C. State professor and CIMS’ “chief evangelist.” If there are no champions in the ranks, “it’s just a big waste of time.”

Finally, you need a process to get great ideas from concept to money. This is CIMS’ particular focus.

Mugge and his predecessor wrote a book, Traversing the Valley of Death, to help entrepreneurs systematically find innovation opportunities, tap customer and vendor insights, and win over internal gatekeepers.

The book’s lessons are embedded in an MBA class that Mugge teaches on value creation. At a first meeting in January, students were introduced to business executives with whom they would work over the next four months.

David Ellis of SmartGene Inc., whose software analyzes and manages genetic information, told students he expects “to keep doing what we’re doing. But what comes next? Which segment should we focus on? What’s the innovation that we need to bring to those markets where we’ll build defensible, sustainable innovation for what we do, year after year?”

Ellis neatly sums up the challenge for all businesses: “Lift the head and look more broadly.” In other words, what’s under the Horizon 3 curve on your company’s whiteboard?

Veteran North Carolina journalist Dan Barkin can be reached at dbarkin53@gmail.com.

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