De-Risking Innovation and New Initiatives - Spring2 Innovation

De-Risking Innovation and New Initiatives

January 6, 2012

       Innovation projects, like any change initiative, have their bumps. I was just visiting the brand new IKEA here in town. I do have to be upfront and say that I am a fan of this company. The one I visited yesterday is much larger than the previous one that was here. They have taken an already proven format (larger IKEA) and brought it here to my backyard yet there are still many growing pains being felt. It reminded me that just like innovation even if a system is proven to work it still takes time to grow and work out all the kinks. The trip also illustrated how important it is to link technology and business strategy.
First of all, at this IKEA a number of staff did not know exactly what to do in some basic situations or what the procedures were. They were all friendly and have to be given some slack for only being open for few weeks. The staff is still being trained. In all new project initiations there has to be time allotted for bringing everyone up to speed and understanding how the new system/entity works even if it is an already proven system. In this particular case there is no competition with an existing product because they closed the other IKEA in town slightly before the larger one opened. Frequently in other companies the innovation is competing with pre-existing products which can create further tension for all.
Second, they have brought in quite a bit of technology and yet still hang onto the basics at the same time. For example, at the return counters there is a fancy new system for taking a number. You can select whether you want to return or exchange and the machine has a motion sensor so that you can only type on it when you are right in front of it. However, when returning a bathmat and curtains I noticed the clerk pull out a wooden slab from a slot that had bar codes on it and scanned two bar codes. When I asked what the codes were for, the clerk said that they were for selecting options for the return. This reminded me of the paper laminated versions they used to have but have made it more durable and color coded now. I realize that Point of Sales (POS) machines are expensive and also difficult to upgrade for such a large company that most likely has mounds of databases hooked up to it but for a brand new store I found it funny to see the ‘legacy’ workaround processes still being used. This company is known for keeping costs down so that consumer costs are also kept down. At the same time, they are also known for being efficient in their processes and systems. Then I put my innovator hat on. Perhaps it is a matter of trying to manage the number of changes being brought in. They are de-risking this opening and increasing their chance of longer term success by bringing in only the necessary changes. Their technology strategy is linked with their business strategy.

There are innovation lessons to be learned everywhere. I had no idea there would be so much to learn and think about from an outing to IKEA.