Q&A: INNOVATION PLAYBOOK

Scott Anthony is an innovation expert. As managing director of Innosight Ventures, a venture investing and incubation firm, he evaluates innovative companies for a living. He has also written three books on innovation, including his latest, “The Silver Lining: An Innovation Playbook for Uncertain Times,” and blogs on innovation for the Harvard Business Review. We asked Anthony what a telecom innovation playback should look like:

Q: How do providers break away from their rather rigid pasts to find new avenues for innovation? Is it possible? How must they structurally approach this to truly innovate?

A: This is an absolutely critical question for telecommunications providers. My own perspective is that companies must break from their pasts if they are to have any hopes of charting sustainable futures. The demise of many traditional media companies shows what happens when companies can't make such a break. It is indeed possible to find new paths to innovation. In my experience, it requires at least three things. First, it requires some degree of “space” in the organization for innovation. If there isn't some degree of autonomy, innovative efforts succumb to what I call the “sucking sound of the core.” Second, it requires some fresh perspectives. If companies are to go into new spaces or follow new models, they should make sure that people who know those spaces or those models are part of the journey as full-time members of the team, contractors, advisors, etc. Third, it requires that companies take a strategic approach to innovation. That means allocating human and financial resources to innovation, having a well-grounded process by which opportunities get identified, shaped, and commercialized and an oversight process that matches the pace of decision making to the pace of learning.

Q: Can the incumbent telco industry “leave the innovation to others” and act as a consolidator, aggregator, platform player, etc. in partnership with true innovators? Will business value flow to them with such an approach, or do they risk more innovative companies eroding their business and revenues?

A: Value typically flows to whoever solves the tough problem. If the telcos truly are the “only game in town,” then acting as a consolidator, aggregator, etc. could be a viable play. Historically, this was the case. I suspect in the future value won't flow to the aggregator but to the company who provides the “sub component” that helps customers solve the important problems in their lives, or to search mechanisms that help people find what they want, or to the technological provider who truly unlocks the ability to unobtrusively do contextual advertising on mobile phones. Another important thing to note is that the sources of value creation in the future might look very different from what we have historically considered to be “telecommunications.” One key when transformation strikes is to not stick to past views of what defines the business. For example, newspaper companies aren't newspaper companies. They provide information, services and connections to businesses.