Innovation. Companies Want It. But What Is It? That’s Where Uri Neren Comes In.
To the executives from 12 of Minnesota’s largest and most durable companies, who gathered to welcome him in October, Karl Ronn is a Mick Jagger, but without the elderly Rolling Stone’s unsavory appeal.
Indeed, Ronn is all about clean. During his tenure as an innovation chief at Procter & Gamble, he directed the development of several industry-changing products, including the Swiffer line and the Mr. Clean Magic Eraser—items that have added millions to P&G’s top line.
Ronn didn’t come to the Twin Cities to bask in adulation but to sit at a table as a colleague and facilitator. The 12 executives are members of Innovation Minnesota, a group assembled by a Minneapolis consultancy called Generate Companies and its founder, Uri Neren. Though their titles vary, they’re all in charge of overseeing the development of new products, services, and internal processes, work that could be classified under that buzzy, provocative, and extremely slippery term, innovation.
It’s not that the Innovation Minnesota member companies, which include General Mills, Medtronic, and the Mayo Clinic, haven’t been innovative. Quite the contrary. But like most businesses, they are looking into a future that has never appeared more difficult to predict. What are the marketing implications of the fast-forward evolution of digital technology? How much longer will consumer spending lag, and how will its patterns change in the wake of the Great Recession?
“I believe that we really are in the midst of a change of age,” says Innovation Minnesota member MaryAnn Stump, senior vice president and chief innovation officer at Blue Cross Blue Shield of Minnesota. “Business models are changing. Look at a lot of things that are going on globally. It just isn’t within one industry.”
Harvard Business School’s Clayton Christensen, one of the deans of innovation studies, introduced the term “disruptive technology” in the 1990s. Numerous businesses are wondering: Is there an idea just outside our range that could disrupt us, just as the personal computer laid low once-mighty firms like Control Data? How do we get to that innovation before it gets to us?
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Neren describes Innovation Minnesota’s members as “lone wolves.”
“Ninety-nine percent of the organization is focused on maintaining current revenue or growing it a little bit—improving a product a little bit,” he adds. “And these folks are talking about, and are in charge of, developing the next market-changing thing.” In short, Neren says, “Everything they do is different from the rest of the company.”
Innovation Minnesota meetings aren’t product brainstorming sessions. They’re not bull sessions, either. Members home in on specific issues and help each other solve particular challenges. The topic Ronn was facilitating was “pipeline management”—very simply (and incompletely), how companies determine which product or service ideas are worth pursuing.
“These are companies with a track record of innovation,” says Innovation Minnesota member Howell “Mac” McCullough, U.S. Bancorp’s executive vice president and chief strategy officer. He describes innovation as “more art than science right now.” One of the values of Innovation Minnesota, McCullough adds, is that it allows large-company innovation officers, none of whom are competitors, to “share what works.”
Like many innovations, Innovation Minnesota was an unintended consequence. The original idea behind Generate was innovative enough: Connect businesses and nonprofits with management consultants that could be more useful than the usual suspects like McKinsey or Bain, or the consultants they had worked with before. Generate put together a database of about 300 consultants, which became the foundation of what Neren playfully describes as “a matchmaking service.”
Not long after starting Generate, Neren was approached by David Rosenman, an assistant professor of medicine at the Mayo Clinic College of Medicine. Rosenman has led major projects at Mayo’s Center of Innovation, including its annual Transform Symposium on the future of health care.
“I wanted to know what innovation meant in different settings, who were the key players and experts, what schools of thought and tools had been developed,” Rosenman recalls. Impressed by Generate’s role as an honest broker of consulting services, Rosenman commissioned Neren to construct the first known database of its kind: one focused specifically on innovation practitioners.
“I used to do energy technology research, I used to do communications work and helped start up new things,” Neren says. “So unintentionally, I’ve been involved in innovation in some way. But the idea of thinking about this very intentionally is new to me.”
He’s by no means alone. While innovation has been studied for decades, it’s still something of a thinly mapped jungle. There are clearings and villages, but the tribes that dwell therein tend to speak different dialects, with their own particular ways of describing and marketing themselves. Adding to the confusion are all manner of consultants who’ve glommed onto “innovation” as the Next Big Thing.
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“The very popularity of the term has led to its own cooptation,” Rosenman observes. “Today, almost everything is called innovation, even when it’s really not.” Ideas for increasing ROI or decreasing costs can be beneficial; they don’t necessarily make new a business or a market.
Working with consultants, academics, and company innovation chiefs, Neren and his crew of staffers and subcontractors hacked through these tangled vines. One of the things they had to determine: Who really counts as an innovation consultant? Which ones have truly useful methodologies? Which have solid track records out in the field?
A year and a half after setting off on this adventure, Neren and Generate had built the World Database of Innovation, listing more than 5,200 consultants, academics, institutes, private nonprofits that study innovation, and company innovation leaders. Generate adds about five new names a week. (About 450 of the listees are based in Minnesota.) The consultants include the McKinseys and Bains, to be sure. But also listed there are product design firms as well as shops that are considered “innovation purists,” including Ideo (based in San Francisco), Fahrenheit 212 (New York), and Doblin (Chicago).
In building the database, Neren and Generate realized that if the connections they made between consultants and clients were to result in something more than a casual date, the database had to be more than a listing. Consulting with industry “guides,” Generate identified an inventory of 105 categories of innovation best practices, a lexicon that includes invention methodologies (there are 162 of those), cultural conditions (17), and how firms organize their innovation function (14).
By late November, Generate had made about 30 matches using its database. Neren says that the process between a client’s request and a signed contract between client and consultant takes from 100 to 200 hours. Generate sorts through the World Database and its various categories, sends out RFPs to the would-be matches, then continues to manage the relationship between the two once the connection is finalized. “We often act as a translator” between client and consultant, Neren says. “We find that they often speak somewhat different languages—use different terminologies.”
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In August, the Blogging Innovation Web site asked 25 innovation practitioners for a definition. One guess how many different answers it got.
But if you mash up all the definitions and semi-definitions out there, you’d probably come close to the way Joel Barker, a Minneapolis-based consultant, teacher, and speaker who has been exploring the idea of innovation since the 1970s, describes the term, particularly when contrasted with “invention.”
“Invention is the discovery or the creation of a new idea. It has nothing to do with its value,” Barker says. Put another way: A cool idea isn’t enough. “I can invent something that has no utility at all,” Barker adds. “Innovation has the criterion that it must be successful in the marketplace. People must value and want it.”
That market, he observes, can be internal or external. “I can have innovations in my organization that will never earn profits on the outside,” Barker says. “But to the ‘customer’ on the inside of the company, it’s a big deal.” An example he offers of the latter: Two years ago, FedEx developed a way to put a scale on its forklifts, thus combining two steps, weighing and loading, for greater efficiency.
Organizations aren’t necessarily resistant to innovating, Neren says. But sometimes, a company’s well-established processes and structures have difficulty making adjustments. “That’s what a lot of these new innovation leaders are put in charge of innovation for,” Neren says. “To actually develop the group or the piece of the companies that can focus on introducing new things, new revenue streams.”
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When starting Generate, Neren became intimately familiar with one of the conditions that impel innovation: doing more with less.
“We started before the economy crashed,” he recalls. “But we’ve really grown this while the economy was down.” That forced the company “to get very creative.” The World Database of Innovation was put together via cloud computing, without the expense of purchasing servers or database software. Thanks to doing things on the digital cheap, Neren adds, “We were in the black in our second month in operation.” (Generate still operates in the cloud: Its 15 employees all use their own laptops to connect to it.)
While the database was still under construction, Neren was asked by a couple of local innovation chiefs to put together the group that became Innovation Minnesota. Since its first meeting last April, the idea has gone viral. The group soon will add three members; a second Innovation Minnesota group is being formed. Generate also has been asked to set up Innovation groups in eight states; Innovation USA and Innovation Europe are also starting to form. Neren says he’s begun securing local partners for groups in South America, the Middle East, India, and Australia.
(In December, Neren revealed that Karl Ronn would begin directing Innovation USA in January; MaryAnn Stump will come on board as the president of Generate’s global innovations network.)
Generate has also partnered with the Harvard Business School, which is providing research materials for the meetings. (Neren has also become one of Harvard Business Review’s bloggers.) The Harvard material “gets everyone talking the same language; it gets everyone thinking of things within similar frameworks, similar takes,” Neren says. “Because one of the biggest challenges in this is no one speaks the same language in innovation. It’s really the Wild West.”
But what innovation is, Neren believes, is less important that what it does. Innovative companies, he says, are “usually making something that works better and helps people’s lives move in a better direction.” He cites Innovation Minnesota member Toro, whose new Timecutter line of power mowers allows groundskeepers to mow more quickly and with less energy. Businesses are “doing things that actually help people live better,” Neren says. “It’s not always as direct as it was when I was working for nonprofits and working on policy, but oftentimes it’s much more impactful.”
This is where Neren expresses “a personal vision, and I think the members of Innovation Minnesota share this vision: to take this amazing brain trust that we’re developing—the brain power in the room—and apply it to social problems.” Such a push is probably years away, he admits. But the issues Neren would like the group to address some day include conservation, sustainability, and health care—issues where the resources and market-oriented pragmatism of businesses, combined with creative thinking, can result in solutions where both business and society can profit.
“One of my goals is for folks to be addressing one of the most current issues, whatever that is at that specific time,” Neren says. “And that’s what we do within the group anyway—for the companies, what are their most pressing issues? So that this group and what we’re doing is useful to the most people. And we’d want to do the same in the world.”
—Gene Rebeck
The Connector, Uri Neren
• BS, international relations and biology, University of Wisconsin–Madison; MBA, Carlson School of Management; Policy Fellow, Humphrey Institute.
• Founded two small businesses in his 20s: one selling outdoor gear, the other an energy-related building renovation firm.
• Directed energy technology research with the federal government and a private research firm from 2000 to 2002; worked in communications and development for Minnesota Public Radio and a public policy organization from 2002 to 2007.
• Founded Generate Companies in 2008; began building the World Database of Innovation later that year.
• Regarding his first name (he’s the son of Minnesota natives): “It comes from our family’s Russian roots. But really, no one else in my family has an unusual name. So I just blame it on the ‘70s.”
Innovation Minnesota Membership
Andersen
Toro
Blue Cross Blue Shield of Minnesota
Cargill
Donaldson
Ecolab
General Mills
Mayo Clinic
Medtronic
Tennant
Thomson Reuters
U.S. Bank
