Innovation Accounting

Michel Bayan, Co-Founder and CEO of DirecTech Labs
 

Transcript

So there’s this talk about technology and how companies need more technology in order to be competitive. Maybe the buzzword is mobile or maybe a new backoffice, big data analytics, AI, machine learning. But what you need is supposed to make you more competitive. See all the best technology in the world isn’t really the thing that’s going to put you on top; nor are the best ideas. So what is it?

In this time of massive change in direct selling what will give your company the edge to not only survive but to thrive against the competition inside and outside the industry? In one word it’s failure, failing a lot and failing fast. Some people call it Failing Forward.

You see business has become so sophisticated and nuance, and competition is so intense that the chances your bright idea is the thing that’s going to drive your company to new heights is low. In fact the most successful companies in the world operate under the assumption that their brilliant ideas are wrong. The question is how wrong is it? Where is it wrong exactly? And, what parts of it have struck a chord?. Everyone is trying to innovate. But few companies have really mastered the discipline and the thoughtful processes to measure if they’re actually doing it.

In the book The Lean Startup Eric Ries talks about a concept called Innovation Accounting -an objective process for knowing if your bright idea is innovation or not. And, it comes down to experimenting, having a process where you can rapidly and cheaply experiment and measure results, check and validate your assumptions, learn and go for another iteration rapidly.

So if your company is having these big ideas, spending time and money developing it, and not gathering evidence until the project is done that’s called Waterfall. It’s the riskiest way to do business. Your competition is agile, quick, and efficient. Your best competition is lean. So research those concepts and you will discover a management philosophy that was created among startups and is now being executed by the top companies in the world: General Electric, Intel.

So what do you do? What does your company do? Are you agile or lean?