#Disruptive #Innovation through #ControledFailure and the role of #Analytics
Over the last Decade there are two Qualities that have been considered the Holy Grail of the Business World. These are no others than being Innovative and Data-Driven. In their Core these two are so contradicting that they can be a perfect match, but only under if approached the right way. Data consist the Traces of the Past, while Innovation is the Vision of the Future. Existing Patterns can educate us and they can drive Optimization leading to Best Practices, but Best Practices stand apart from Innovation. Best Practices can prevent from repeating the same mistakes but they are not enough to point the way to create Future.
It is commonly said that the Future can be found in the study of the Past. This is a common saying among Historians. This trait of repetition can be found in Economy as well, with Growth and Recession following one the other forming an undeniable Cycle. The traditional approach of Data can be a useful compass to help us navigate through this Repetitive Pattern. They can Help us prepare for the changes ahead, but this is a Passive way to deal with the Future. Innovation is more Aggressive and requires a Leap of Thought that can not be fully validate from any Data. Innovation requires to Navigate in Uncharted Waters. The same way Columbus made a Leap of Thought to assume that by sailing to the West he could reach the East, he did not find this in any Map of the time, he had to combine facts (data) but then he had to make a leap that could not be proven in any other way but “Trial and Error”.
“Trial and Error” is a vital part of Innovation that is bridging the gap with Data. Data through Analysis can secure that there is developed a solid Understanding of the System within we want to achieve Innovation, including the underlying Risks and Desirable Objectives. What they can not do is provide a Definite Answer for what Innovation will interact with the Existing System. Still its contribution can not be understated. The Identification and Quantification of Risks is Vital for any Attempt of Innovation to be Viable and even if Analysis can not guarantee its success it can prevent its failure.
Coming back to the example of Columbus. Analytics of the time could have been applied is by considering the longest distance ever traveled to the West and how longer they are willing to go further to that. After factoring Weather and its intervention to the duration of their Travel he should take ships with men and Supplies to last for the Travel and to the limit set and back, if assumption failed. While this would not secure the success of its objective, it would prevent its Fatal Failure.
This is what the Stoics were calling Premeditatio Malorum, which it can be translated as Imagining what can go wrong. This was an early form of Risk Analysis and Management. Data can be vital for that. Through Analytics it can be quantified the expected Benefit from Innovation, the Expected Cost and the underlying Risks that could Derail the Project. The next step would be to Set Thresholds and Contingency Plans to avoid being stuck in a Dead-End Situation that only way out is to crush in the wall ahead. It is like in Off-Road Motorbike Races. One of the most important part of the training is to learn how to fall. It is vital to train your body and automate the reaction during a distress situation, because in that time every second counts. The same with any Project. Distress Coping Mechanisms are vital in order to avoid a Project collapsing and potentially bringing down all the Organization.
I want to be clear that I do not undermine the value of Data and Analytics to Innovation, but to point out that an out of proportion dependency on Data some times can lead to a Bottleneck.
Analytics can also be used also in a more Creative way. Data can and should provide the foundation based on which Innovation can be build. Through Analysis we can develop educated Hypothesis, but we can not validate or reject this Hypothesis when it comes to Innovation. Innovation will always involve Risk and it will never be achieved within the comfort zone of Existing Patterns, but the understanding of the Underlying forces that drive these Patterns will give us a solid base to make this Leap of Thought and Innovate through Educated Risk Taking. Projecting in the Future extrapolated Trends can be considered Optimization but it is not to be mistaken with Innovation. Another great Risk in building Innovation based on Isolated Trends we spot it involves another hidden risk. This is the Risk of treating a potential symptom as the cause, but this is a topic that will be discussed extensively in a future article. Also another great way to lead Innovation through Data and Analytics is through Testing and simulating on a smaller scale your ideas. Still some Ideas are too big to swim in small pools and they are made for the Ocean.
Data can be a great consultant but it can develop to a Tyrant of weak minds and whoever acts only on established Trends, will always run after a departed Train. The lack of innovation will always have a great cost, which is the Opportunity Cost.