I was familiar with “wicked” problems—intractable, multifarious, tough-to-solve challenges—as part of my livelihood derives from working with teams in companies trying to solve them, but until I read Innovation X: Why a Company’s Toughest Problems Are Its Greatest Asset, by Adam Richardson, a creative director at frog design, I had never heard of an “X” problem. And that, of course, made me curious to not just read the book, but ask Adam a few questions.
Q: What is Innovation X about, in a nutshell?
A: It’s about answering a single question: if so many companies have been focused on innovation, why are so few seeing the results they expected? Improving innovation capabilities has been a huge emphasis for companies in the last decade, especially focusing on organizational challenges—impermeable silos, slow decision-making, etc. But in working with a wide spectrum of clients, from startups to large corporations, I came to understand that a big obstacle to innovation effectiveness comes as much from the outside, and that the very complexity of problems that companies must deal with is what’s getting in the way. In other words, the problem is the problem! If you optimize your organization and processes but don’t have a good handle on the problem you’re trying to solve, all you’re doing is bringing the wrong products to market, faster.
I call these new, very complex challenges, X-problems. And I happen to believe that if you think about them in the right way, you can turn them into a competitive advantage.
Q: What are the key elements of an X problem?
A: First, customers are becoming more sophisticated and demanding, and understanding what they want is harder today. Second, many industries and categories are colliding, pitting companies against one another in unexpected and disruptive ways. Third, companies are realizing they need to create ecosystems of products, software and services in order to be competitive, and to satisfy those more demanding customers.
These three dynamics are often treated as separate symptoms, but I see them as inter-related and inseparable, and they work together to form a new breed of business challenge: the X-problem.
Q: Can you give me an example of an X problem and how a small business solved it?
A: Good question. Many look to companies like Apple and Google and want to emulate their success, but there are many other examples out there of companies, even smaller ones, successfully using X-problems to their advantage.
Consider the X-problem of the stagnant, unimaginative camcorder category. All the large established players were making their devices based on feature lists and tech specs, and had forgotten how and why people shoot videos in the first place. Pure Digital Technologies, a small startup, created Flip digital camcorders and in a few short years became the number two camcorder maker behind Sony. How? By focusing on simplicity, fun and spontaneity of use, and taking out all the expensive features to keep the price low. Pure Digital created a whole new category and got people using video again. It worked so well Cisco Systems recently acquired Pure Digital for nearly $600 million.
Q: Peter Drucker maintained that innovation is the specific tool of the entrepreneur...do you find that entrepreneurs and small businesses are better suited to handle X problems than large corporations? And if so, why might that be, in your view?
A: Smaller businesses and entrepreneurs absolutely have some significant advantages over large established companies in addressing X-problems. Solving X-problems is best done with an experimental, nimble approach. Small companies are well-suited for this as they are typically less encumbered by convention, have more fluid decision-making, and rely more on “hunch-ology“ than waiting until everything gets confirmed by masses of data. So they can be more adaptable to the unfolding problem.
Many entrepreneurs also have a more intimate understanding of their customers than large corporations which can give insights about changing needs.
Take Clif Bar, for example, the maker of energy snacks for athletes. They have stayed small and private, but do very well competing against international giants like Kraft and Nestle. They stay in very close, continuous conversation with customers, but always process the inputs through a filter that balances suggestions with a clear understanding of their brand, their production capabilities, new snack production technologies, and so on. They try to innovate on behalf of customers rather than just following trends. In fact their only significant failure came when they followed—reluctantly—the Atkins diet trend a few years ago. It was painful, but in fact it helped re-clarify what they stood for as a company.
Q: What’s the one thing you want your readers to do or take away from Innovation X?
A: I think it's that innovation is more important than ever in today’s environment of hyper-competition and demanding customers. X-problems make it harder to do innovate effectively, but if you can solve and tackle them well, they’ll open up new ways of engaging with your customers, and create long-term differentiation for your business. The message is, keep on innovating!
I recently had the opportunity to watch up-close how frog helped guide a company toward solving an X-problem, which for me validated the practical nature of what Adam advises in Innovation X. His discussion of how to map the entire “customer journey” is particularly insightful and helpful, and worth far more than the price of the book. In fact, it’s invaluable.
Matthew E. May is a design and innovation strategist, and the author of In Pursuit of Elegance: Why the Best Ideas Have Something Missing. He blogs here. You can follow him on Twitter here.