With innovation, ignorance really can be bliss
When it comes to innovation, looking at the problem from a new perspective is key. Here, we take a look at some tales of innovation in action, and how being in a state of ignorance helped these businesses revolutionise some traditional marketsStuart Rock
Mighty, tumultuous Atlantic waves crash onto the wildly beautiful coast of Northern Ireland. It’s a challenging and exhilarating place for surfers.
But the biggest waves here are not coming from the Atlantic but from a modest 2,000ft2 factory near its shore. Because, from here, brothers Ricky and Chris Martin are aiming to revolutionise a $3 billion global market.
It started when former financial recruitment executive Ricky took over running a local surf school. It was a far cry from his previous world. “I spent the day looking at kids wearing smiles rather than prats wearing suits,” he says.
But it was hard work. One particularly aggravating problem was the quality of the surfboards. At the end of one season, 30 of them fell apart. The brothers had to tape them up in their garage.
Not unnaturally, they started to ask questions: why did the boards come apart?
The answer: glue. Once a surfboard has been exposed to the variations of both sunshine (yes, even in Northern Ireland) and cold water, the adhesives that stick its component parts together tend to break down. Current boards have five structural flaws, all of which can be attributed to adhesives, believes Ricky.
The brothers’ ignorance of the status quo in the marketplace – glue was the be-all and end-all – was helpful. Their minds were open to ideas. There had to be a better way.
And, for the past 18 months, the Martin brothers have been edging closer to proving it – by creating a surfboard manufacturing process that eliminates adhesives and uses 100% recyclable materials.
With an initial grant of £10,000, the brothers hashed out a prototype with Alan Mills, an engineer at Queen’s University Belfast. “It looked like a massive boat but it proved the concept,” says Ricky. A second grant of £40,000 enabled them to set up their factory.
The surfboard’s sections are heat-bonded so they integrate with each other; as one section of the board is bonded to another it becomes the strongest section, not the weakest.
But it’s not been plain sailing or, rather, surfing.
“There’s an extraordinary amount of things that you think will be simple that just aren’t,” says Ricky.
The finished boards have yet to be put through their paces on British and Irish beaches. But it does look as though this is an invention that will make it into the marketplace
The Martin brothers know they have solved an industry problem. Patents are pending on the technology; discussions about licensing the boards and their manufacture are under way in Australia and California; and hundreds of enquiries have already been logged.
Today the global surfboard market is worth $3bn. “We are not trying to create a new market,” says Ricky. “Rather, we are revolutionising one that already exists.”
Accidents can happen
The roots of many businesses lie in the need to prove that there is a better way, that a particular product can be bettered and a marketplace revolutionised.
You see this in the determination of Sir James Dyson, who made more than 5,000 prototypes over a five-year period to create a cyclone-based vacuum cleaner that would suck up dust more effectively.
In other cases, however, it’s a bit more accidental. The realisation that there might be a viable business only follows on from the process of finding a solution to what was a lifestyle problem.
In 2009, two Estonians – Taavet Hinrikius and Kristo Käärmann – met while they were working in London. Hinrikius was a strategy director for Skype; Käärmann worked for Deloitte. Hinrikius was being paid by Skype’s Estonian office in euros but he needed sterling to live in London; Käärmann was paid in sterling in London but had to pay his mortgage and other bills in Estonia in euros.
Between them, they were exchanging up to £6,000 in cash a month – and losing about 5% of their salaries to bank charges.
So, they came up with a solution. Each month, the pair checked that day’s mid-market rate to find a fair exchange rate. Käärmann put pounds into Hinrikius’s UK bank account; Hinrikius put euros into Käärmann’s account.
By making domestic local transfers, they weren’t paying a margin on the exchange rate or a fee for making it happen. “There must be others like us,” their thinking went, as the epiphany dawned.
Soon, other friends in London were joining in. The homespun idea became a proprietary algorithm. The savings on bank charges that they were generating pointed to a serious business opportunity.
And how? TransferWise launched in 2011 and transferred £10m in its first year of operation. By early 2014, it had processed £1bn of customer money. That figure is now more than £3bn.
The desire to find a better way is the essence of innovation. It is the human spirit at work, to puzzle over something and to try to improve the way things are. It is not confined to the entrepreneur; it’s the domain of the relentless, the resourceful, the quizzical, the determined.
Kevin Ashton’s new book, How to fly a horse: the secret history of creation, invention and discovery, is a fine exposition of this.
Ashton argues that epiphanies are not the privilege of the few and that a “creative solution” – however sudden and seemingly brilliant – is always the result of detailed hard work. No business is built by a magic touch.
His early career was at Procter & Gamble (P&G), where he was an assistant brand manager. There he was faced with a lipstick issue.
“I was trying to solve an apparently boring problem that turned out to be interesting,” he writes. “I could not keep a popular shade of P&G lipstick on store shelves. Half of all stores were out of stock at any given time. After much research, I discovered that the cause of the problem was insufficient information.
“The only way to see what was on a shelf at any moment was to go look... there was no way a computer could see if a lipstick was on a shelf. This was the problem I wanted to solve. I put a tiny radio microchip into a lipstick and an antenna into a shelf; this, under the catch-all name ‘Storage System’ became my first patented invention. The microchip saved money and memory by connecting to the internet, newly public in the 1990s, and saving its data there.”
To help his fellow P&G executives understand his system of connecting things like lipstick to the internet, Ashton gave his innovation “a short and ungrammatical name”: the Internet of Things. His work led him to become an executive director at Massachusetts Institute of Technology and to start several technology businesses.
Today, the Internet of Things accounts for more than 1.2 billion different devices being connected to the internet, and this number is predicted to rise to 5.4 billion by 2020.
Approaching a problem from a position of relative ignorance, or lack of experience of the barriers involved, can be powerful.
In his letter to investors at the time of Facebook’s IPO in 2012, founder and chief executive Mark Zuckerberg described “the hacker way” approach to building, which involves continuous improvement and iteration.
“Hackers believe that something can always be better, and that nothing is ever complete,” he wrote. “They just have to go fix it – often in the face of people who say it’s impossible or are content with the status quo.”
Of course, not every company is as stuffed with super-talented potential entrepreneurs as Facebook. An overly powerful process-oriented culture, fear of risk or failure, the pitfalls of internal politics, the maintenance of the status quo – all can militate against managers being able to ask and pursue the question ‘isn’t there a better way?’.
But it is not impossible.
For nearly 70 years, industrial giant 3M has encouraged its employees to spend 15% of their working time on their own projects. Its commitment to experimentation has been central to its continuing success.
The LEGO Group has also been praised for achieving a balance between giving its people the space to be creative but with clear direction and focus.
“If what you’re looking for is how to make a lot of money doing lots of small innovations, lots of small ideas, but integrating them really well and focusing them very well on what your customers want and need, then LEGO is a great model,” says David Robertson, professor of practice at the Wharton School and co-author of Brick by Brick, an account of LEGO’s approach to innovation.
And you can always tap into the capabilities of others. Why not invite some entrepreneurs to help you question the status quo?
Telefónica has, in effect, been doing this for years with its Wayra accelerator programme. And BMW recently announced the launch of its Startup Garage incubator.
“It was time to ask ourselves how our company can tap into this potential [of small, innovative companies] in an efficient way,” says BMW’s innovation manager, Gregor Gimmy.
I’m pretty sure that a day spent with Chris and Ricky Martin would help you to find some better ways. And waves, too.
This was first published in the Summer edition of Professional Manager, available exclusively to CMI members
Surfing image courtesy of Matt Wright