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Business organizations need innovative people. Innovation is the “secret formula” of business success. Entrepreneurs typically entice innovation using skills like: associating, questioning, observing, experimenting, and networking.

What does it take to innovate?

Innovation is all about creative thinking, imagination, questioning, observing, experimenting, networking, and entrepreneurial spirit. We stand in awe of visionary entrepreneurs like Apple’s Steve Jobs, FaceBook’s Mark Zuckerberg, and Amazon’s Jeff Bezos. Coming up with groundbreaking, industry defining new ideas that change peoples lives is what innovation is all about. There is no set formula and to innovate profitably you need more than just creativity.

How does innovation really happen?

If we could put innovative entrepreneurs under the microscope and examine their inner workings, and the  when and how of creative new ideas, we would discover that great entrepreneurs are not necessarily all great innovators. Someone that runs an existing company or franchise successful does not have the same skill set of entrepreneurs who start innovative new companies or invent new products or services.

At most companies the top executive are not personally responsible  for coming up with strategic innovations. In the most innovative companies, strategic innovation is something that is never delegated. There are five skills that distinguish the DNA of the most creative and innovative executives:

  1. Associating
  2. Questioning
  3. Observing
  4. Experimenting
  5. Networking

What makes innovators different?

What makes innovators different is that innovative entrepreneurs are blessed with creative intelligence, enabling them to discover. A cognitive skill which engages both sides of the brain to leverage the five discovery skills that entice innovation: associating, questioning, observing, experimenting, and networking.

Coming up with a creative new business-venture ideas.

Helping to cultivate new insights and coming up with creative  new business-venture ideas takes talent and practice. A innovator will move mountains, observe the competition, sample products, test prototypes, ask questions, and experiment. Innovative entrepreneurs hone their innovation skills this way.


Associating is the ability to connect seemingly unrelated questions, problems, or ideas from different areas. Associating is also connecting people, and brainstorming for new ideas. The more diverse our experience and knowledge, the more connections our brain can make, and fresh inputs trigger new associations, and for some people this leads to new ideas.

Associating is like a mental muscle that can grow stronger by using the other discovery skills. As innovators engage in those behaviors, they build their ability to generate ideas that can be recombined in new ways.


Questioning is the power of provocative questions, and the skill is in finding the right questions. Innovator constantly ask questions that challenge common wisdom.

they brainstorm, they like to ask: ‘If we did this, what would happen?’”

Ask “Why?” and “Why not?” and “What if?”
Innovative entrepreneurs, on the other hand, are much more likely to challenge assumptions (“If we cut the size or weight of the widget in half, how would that change the value proposition it offers?”).

Imagine opposites.
innovative thinkers have “the capacity to hold two diametrically opposing ideas in their heads.” He explains, “Without panicking or simply settling for one alternative or the other, they’re able to produce a synthesis that is superior to either opposing idea.”

Innovative entrepreneurs like to play devil’s advocate. “My learning process has always been about disagreeing with what I’m being told and taking the opposite position, and pushing others to really justify themselves,” Pierre Omidyar told us. “I remember it was very frustrating for the other kids when I would do this.” Asking oneself, or others, to imagine a completely different alternative can lead to truly original insights.

Embrace constraints.
Most of us impose constraints on our thinking only when forced to deal with real-world limitations, such as resource allocations or technology restrictions. Ironically, great questions actively impose constraints on our thinking and serve as a catalyst for out-of-the-box insights. (In fact, one of Google’s nine innovation principles is “Creativity loves constraint.”) To initiate a creative discussion about growth opportunities, one innovative executive in our study asked this question: “What if we were legally prohibited from selling to our current customers? How would we make money next year?” This led to an insightful exploration of ways the company could find and serve new customers. Another innovative CEO prods his managers to examine sunk-cost constraints by asking, “What if you had not already hired this person, installed this equipment, implemented this process, bought this business, or pursued this strategy? Would you do the same thing you are doing today?”


Discovery-driven executives produce uncommon business ideas by scrutinizing common phenomena, particularly the behavior of potential customers. In observing others, they act like anthropologists and social scientists.

“You see something and ask, ‘Why do they do that? That doesn’t make sense.’” Then a buddy got him a sneak peek at the Apple Lisa before it launched. Immediately after leaving Apple headquarters, Cook drove to the nearest restaurant to write down everything he had noticed about the Lisa. His observations prompted insights such as building the graphical user interface to look just like its real-world counterpart (a checkbook, for example), making it easy for people to use it.

Innovators carefully, intentionally, and consistently look out for small behavioral details—in the activities of customers, suppliers, and other companies—in order to gain insights about new ways of doing things. Ratan Tata got the inspiration that led to the world’s cheapest car by observing the plight of a family of four packed onto a single motorized scooter. After years of product development, Tata Group launched in 2009 the $2,500 Nano using a modular production method that may disrupt the entire automobile distribution system in India. Observers try all sorts of techniques to see the world in a different light. Akio Toyoda regularly practices Toyota’s philosophy of genchi genbutsu—“going to the spot and seeing for yourself.” Frequent direct observation is baked into the Toyota culture.


When we think of experiments, we think of scientists in white coats or of great inventors like Thomas Edison. Like scientists, innovative entrepreneurs actively try out new ideas by creating prototypes and launching pilots. (As Edison said, “I haven’t failed. I’ve simply found 10,000 ways that do not work.”) The world is their laboratory. Unlike observers, who intensely watch the world, experimenters construct interactive experiences and try to provoke unorthodox responses to see what insights emerge.

The innovative entrepreneurs we interviewed all engaged in some form of active experimentation, whether it was intellectual exploration, physical tinkering (Jeff Bezos taking apart his crib as a toddler or Steve Jobs disassembling a Sony Walkman), or engagement in new surroundings (Starbucks founder Howard Shultz roaming Italy visiting coffee bars). As executives of innovative enterprises, they make experimentation central to everything they do. Bezos’s online bookstore didn’t stay where it was after its initial success; it morphed into an online discount retailer, selling a full line of products from toys to TVs to home appliances. The electronic reader Kindle is an experiment that is now transforming Amazon from an online retailer to an innovative electronics manufacturer. Bezos sees experimentation as so critical to innovation that he has institutionalized it at Amazon. “If we can get processes decentralized so that we can do a lot of experiments without it being very costly, we’ll get a lot more innovation.”

The importance of creating a culture that fosters experimentation. “Our culture opens us to allowing lots of failures while harvesting the learning,” he told us. “It’s what separates an innovation culture from a normal corporate culture.”

One of the most powerful experiments innovators can engage in is living and working overseas. Our research revealed that the more countries a person has lived in, the more likely he or she is to leverage that experience to deliver innovative products, processes, or businesses. In fact, if managers try out even one international assignment before becoming CEO, their companies deliver stronger financial results than companies run by CEOs without such experience—roughly 7% higher market performance on average, according to research by Gregeren, Mason A. Carpenter, and Gerard W. Sanders. P&G’s A.G. Lafley, for example, spent time as a student studying history in France and running retail operations on U.S. military bases in Japan. He returned to Japan later to head all of P&G’s Asia operations before becoming CEO. His diverse international experience has served him well as the leader of one of the most innovative companies in the world.


Devoting time and energy to finding and testing ideas through a network of diverse individuals gives innovators a radically different perspective. Unlike most executives—who network to access resources, to sell themselves or their companies, or to boost their careers—innovative entrepreneurs go out of their way to meet people with different kinds of ideas and perspectives to extend their own knowledge domains. To this end, they make a conscious effort to visit other countries and meet people from other walks of life.

They also attend idea conferences such as Technology, Entertainment, and Design (TED), Davos, and the Aspen Ideas Festival. Such conferences draw together artists, entrepreneurs, academics, politicians, adventurers, scientists, and thinkers from all over the world, who come to present their newest ideas, passions, and projects. Michael Lazaridis, the founder of Research In Motion, notes that the inspiration for the original BlackBerry occurred at a conference in 1987. A speaker was describing a wireless data system that had been designed for Coke; it allowed vending machines to send a signal when they needed refilling. “That’s when it hit me,” Lazaridis recalls. “I remembered what my teacher said in high school: ‘Don’t get too caught up with computers because the person that puts wireless technology and computers together is going to make a big difference.’” David Neeleman came up with key ideas for JetBlue—such as satellite TV at every seat and at-home reservationists—through networking at conferences and elsewhere.

Kent Bowen, the founding scientist of CPS technologies (maker of an innovative ceramic composite), hung the following credo in every office of his start-up: “The insights required to solve many of our most challenging problems come from outside our industry and scientific field. We must aggressively and proudly incorporate into our work findings and advances which were not invented here.” Scientists from CPS have solved numerous complex problems by talking with people in other fields. One expert from Polaroid with in-depth knowledge of film technology knew how to make the ceramic composite stronger. Experts in sperm-freezing technology knew how to prevent ice crystal growth on cells during freezing, a technique that CPS applied to its manufacturing process with stunning success.

Practice, Practice, Practice

As innovators actively engage in the discovery skills, they become defined by them. They grow increasingly confident of their creative abilities. For A.G. Lafley, innovation is the central job of every leader, regardless of the place he or she occupies on the organizational chart. But what if you—like most executives—don’t see yourself or those on your team as particularly innovative?

Though innovative thinking may be innate to some, it can also be developed and strengthened through practice. We cannot emphasize enough the importance of rehearsing over and over the behaviors described above, to the point that they become automatic. This requires putting aside time for you and your team to actively cultivate more creative ideas.

The most important skill to practice is questioning. Asking “Why” and “Why not” can help turbocharge the other discovery skills. Ask questions that both impose and eliminate constraints; this will help you see a problem or opportunity from a different angle. Try spending 15 to 30 minutes each day writing down 10 new questions that challenge the status quo in your company or industry. “If I had a favorite question to ask, everyone would anticipate it,” Michael Dell told us. “Instead I like to ask things people don’t think I’m going to ask. This is a little cruel, but I kind of delight in coming up with questions that nobody has the answer to quite yet.”

To sharpen your own observational skills, watch how certain customers experience a product or service in their natural environment. Spend an entire day carefully observing the “jobs” that customers are trying to get done. Try not to make judgments about what you see: Simply pretend you’re a fly on the wall, and observe as neutrally as possible. Scott Cook advises Intuit’s observers to ask, “What’s different than you expected?” Follow Richard Branson’s example and get in the habit of note taking wherever you go. Or follow Jeff Bezos’s: “I take pictures of really bad innovations,” he told us, “of which there are a number.”

To strengthen experimentation, at both the individual and organizational levels, consciously approach work and life with a hypothesis-testing mind-set. Attend seminars or executive education courses on topics outside your area of expertise; take apart a product or process that interests you; read books that purport to identify emerging trends. When you travel, don’t squander the opportunity to learn about different lifestyles and local behavior. Develop new hypotheses from the knowledge you’ve acquired and test them in the search for new products or processes. Find ways to institutionalize frequent, small experiments at all levels of the organization. Openly acknowledging that learning through failure is valuable goes a long way toward building an innovative culture.

To improve your networking skills, contact the five most creative people you know and ask them to share what they do to stimulate creative thinking. You might also ask if they’d be willing to act as your creative mentors. We suggest holding regular idea lunches at which you meet a few new people from diverse functions, companies, industries, or countries. Get them to tell you about their innovative ideas and ask for feedback on yours.

Innovative entrepreneurship is not a genetic predisposition, it is an active endeavor. Apple’s slogan “Think Different” is inspiring but incomplete. We found that innovators must consistently act different to think different. By understanding, reinforcing, and modeling the innovator’s DNA, companies can find ways to more successfully develop the creative spark in everyone.

Over the past 25 to 30 years, agile innovation methods have greatly increased success rates in software development, improved quality and speed to market, and boosted the productivity and motivation of IT teams.

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