Solving 'The Riddle' of Innovation

A conversation with Andrew Razeghi, professor at Kellogg School of Management at Northwestern University In addition to teaching innovation at Northwestern University, Andrew Razeghi works as an adviser to organizations on innovation and growth.

In both roles, he helps tackle complex problems like, "How can a particular country reposition itself to appeal to changing tourism trends?" or "How can a global food manufacturer navigate the challenges and opportunities of obesity?" While the problems he sorts out may appear to be vastly different, he says, the principles that drive successful innovation are much the same.

Alice Bumgarner (AB): What is the importance and the role of innovation in today's global economic environment?

Andrew Razeghi: The only sustainable source of competitive advantage is innovation. It's that simple. And that hard. Manufacturing can be outsourced at a fraction of the cost. Financial engineering is designed to buy time until the next big idea comes along. And incremental improvements to existing products or services yield similarly incremental returns to a business. That said: innovation is the only true source of sustainable advantage. But it is not innovation per se that will enable sustainability, rather it is the capacity for an individual or an organization to succeed with innovation on a continuous basis, as part of his/her/their way of life.

AB: What surprises have you encountered when working with innovative teams?

Andrew Razeghi: I continue to be amazed at the capacity of human creativity when confronted with great challenges. It's really remarkable. I also continue to be amazed at the fear produced by bold new ideas. At times, the promise of a new idea can be greater than the problem that it seeks to solve. Those that understand this simple truth – that innovation is full of both hope and fear – and have gained the skills to identify, manage, and balance these opposing forces, win.

AB: What are some of the obstacles that prevent teams from creating innovative products?

Andrew Razeghi: The status quo is too comfortable. If there is no reason to change (real or perceived), people won't change. So as a leader, you must either show them the future or set the platform on fire. Many industries and companies have gone the way of the buggy whip for this simple reason. The second obstacle is, the culture doesn't support failure. If you want to know the real reason for Detroit's failure to innovation, it's not that they can't see the future. It's that the culture of U.S. car making does not reward innovation. It rewards history. Third, those who have the ideas are not necessarily those who have the power to introduce the ideas. Individuals may be creative, but innovation involves sociology. An organization's structure, politics, budgeting, culture, category, leadership, values, beliefs, all affect its relative success with innovation.

AB: When teams are working on a problem or developing a product, and they hit a barrier, what do you recommend?

Andrew Razeghi: First off, know that it is inevitable. All great teams hit walls. Use the barrier to get creative. Oftentimes, the wall is just what was required to get to the next level. Also, when you hit a wall and feel stuck, the odds are that you are driving only one vehicle. Successful new products (and those that introduce them) send off a portfolio of ideas at the same time. If one doesn't work, the other one might. Don't bet on a silver bullet.

AB: What is the most exciting innovation you've been involved in developing?

Andrew Razeghi: There are many. One of which I am particularly proud of at the moment is Paradise 4 Paws. P4P is the nation's largest pet resort. It was started by a student of mine. (Full disclosure: I'm also an investor). We do it all. Boarding, grooming, massage, training, even slumber parties. Don't laugh. It's a $40 billion industry. That's more than we spend on toys and jewelry combined.

AB: What, if any, problem solving, creativity tools or innovation software do you use or are you familiar with?

Andrew Razeghi: Shameless (but relevant) plug: pick up a copy of my book, The Riddle: Where Ideas Come From and How to Have Better Ones (Jossey-Bass/Wiley, 2008). It's all in there.

AB: What innovation methodologies, theories, and training do you use or recommend to others?

Andrew Razeghi: I use a variety of methods. It really depends upon the situation, the organization, and so on.

AB: Are you familiar with virtual collaborative innovation communities and networks such as IdeaConnection.com that bring together experts, facilitators, and product developers for confidential collaborative creation? What has been your experience with this type of collaboration?

Andrew Razeghi: Sure. Collaborative innovation is the future. In my experience, it works best for organizations that may fit a number of criteria. For example, those with constrained resources who can leverage others to get to the big ideas. Or those who have big ideas but not the agility to move fast enough. Or those with corporate cultures too strong to allow for internal innovation efforts to succeed.

AB: Do your innovations come from inside the company, from consults or outside sources, or a combination of the two?

Andrew Razeghi: In education, we tend to innovate from the inside-out. In fact, here at Kellogg, we are actually quite innovation. We practice what we preach. For example, if a professor has a new course he or she would like to introduce, we have an experimentation "track" for launching that course and testing to see whether or not there is an appetite among our customers (students) for it. If there is, the course moves ahead. If there is no market, the course dies. It's actually very efficient.

AB: What good books, articles, blogs, or other media on the topic of innovation have you read? Are there any that you recommend to employees?

Andrew Razeghi: My own, of course! The Riddle is on the Eureka moment. It explains why you have your best ideas when you are least likely trying to have them (the shower, stuck in traffic, while jogging, etc.). Also, Hope: How Triumphant Leaders Create the Future. It's about how great leaders use creativity and innovation to lead through uncertainty. It's particularly relevant during these trying times.

AB: Do you have any other thoughts you would like to share about innovation?

Andrew Razeghi: Innovation is only as valuable as people's willingness to pay for it. Don't be distracted by the promise of a new idea. Be distracted by the promise of solving problems, creating new wealth, and changing the world. Innovation is simply a means to an end. It is the vehicle to greatness.