The World Has Changed In 20 Years, But Not Innovation

On May 17^th 2001, twenty years ago, I started Miller-Klein Associates Ltd. The corporate merry-go-round had taken another turn, leaving me without an exciting job, so I turned to private practice.

My ambitions were limited. I wasn’t interested in starting another McKinsey or PA Consulting; I wanted to do interesting work with interesting people and keep a roof over my family’s heads and food on the table.

Specifically, I wanted to help people and organisations to innovate more often, faster and more effectively. I wanted to push the need to shift to a sustainable economy and convince business they could tap some outstanding market opportunities.

I can claim at least some success. Most start-ups die within the first five years, and we are still here.

Everything changes

A lot has changed in the last twenty years. From the tools we use to the business world we inhabit.

In the early years, I carried a hefty Dell laptop, a Palm Vx organiser, a very un-smart phone and a pocketable (more or less) digital camera. Today the laptop is thinner, lighter and much more powerful. The electronic organiser, camera and phone have merged into a single smartphone with much better functionality but, sadly, shorter battery life than separate devices.

In the early 2000s, social media had not begun, and Google was not yet a dominant presence. You could have desktop videoconferencing, and I did it, but it needed a dual ISDN phone line and someone similarly equipped at the other end. It was not a common tool.

The external world has changed dramatically as well. The attack on the Twin Towers in 2001, leading to the invasions of Afghanistan and Iraq and the turmoil that followed. Increasing integration of the global economy and the rise of China as an economic superpower. The global financial crisis in 2008 and the emergency actions taken by central banks. Increased international trade and movement of people raising the risk of pandemics; SARS, MERS and then COVID-19 finally going global, questioning our patterns of work and the purpose of the ‘office’.

Topics that were on the fringe are now mainstream. Climate change and talk of a ‘green recovery’ are everywhere. In 2008 the Climate Change Act in the UK committed to an 80% reduction in carbon emissions by 2050. This target was upgraded to 100%, or net-zero, in 2019. Across the world, 1,870 local governments in 33 countries have passed binding motions declaring a climate emergency. That covers 820 million citizens. In the UK, 304 councils and eight combined authorities/city regions have announced a climate emergency, representing 90% of the population.

The market is pulling through innovation for a net-zero transition, and costs are dropping. The price of solar PV has dropped by 82% in the last ten years. In 2000, the UK had two 2 MW experimental offshore wind turbines. By 2020 the UK had 10.4 GW installed. For over two-thirds of the globe, renewables are now the cheapest option for new electricity generation capacity.

All the global auto manufacturers are switching to battery-electric or hydrogen fuel cell vehicles and Project Drawdown lists 100 approaches to cutting CO₂ emissions.

But innovations still face the same challenges

The world is going through a phase of rapid change, and yet much remains the same. People are still people, and they want to meet their physiological and psychological needs. There may be fresh ways to meet those needs, but what people want from life is remarkably consistent.

Businesses like to think they are revolutionising how the economy works, but mostly they are just tweaking and making marginal changes.

A favourite book is “The Victorian Internet” by Tom Standage. He shows how the growth of the telegraph system in the 19^th Century affected global trade in the same way that the internet is doing today. Innovation is usually the pursuit of alternative ways to solve old problems.

Despite all the new tools and management theories, innovation remains inherently risky. Michael Schrage said, “Most innovations, no matter how inspired, end up on the scrap heap of history…”. Most new products and services will fail in the marketplace, and the reasons they die don’t change.

Over the years, I have worked with or talked to hundreds of people, organisations and businesses trying to create new products and services. I have become increasingly convinced that successful innovation is a conversation, a dance, between the needs and wants of the customer and the capabilities the innovator can marshal to create a solution. The product emerges from the tension between these two points of view.

The most common error is to become obsessed with the cleverness of the idea and forget the customer. Classic technology push. I meet many innovators who can explain their innovation and how it works whilst remaining vague about why anyone should care. The number one reason for market failure of innovation is solving a problem the customer does not have.

Focusing on the customer need without thinking about the solution’s viability is equally damaging – too much market pull. The second most common reason for failing in the market is the innovation is too expensive. The third most common reason – the product does not work.

Balancing push and pull, need and capability, are essential to make ideas and dreams a reality. And we should also remember that technology changes much faster than customer needs.

To all the colleagues and friends who have advised me, taught me, challenged and supported me – my thanks are not enough for the role you have played. To my customers, I hope the experience was not too disappointing.

Here’s to the next twenty years!