We often make the mistake of viewing innovation as a single occurrence. A “unicorn” product or service that takes off and changes the world as we once knew it. But, in reality, innovation is rarely a one-time event.
You won’t likely find an entrepreneur or intrapreneur whose very first idea turned out to be a raging success. Successful innovators establish an environment that encourages transformation, whether it’s in their companies or in their personal lives. They often are cultivating a portfolio of ideas across different stages of innovation which results in an ongoing flow of innovations.
Another error we tend to make when discussing innovation is limiting our scope of reference. Our modern frameworks for change only cover the last 50 to 100 years of history. We forget that innovation predates the advent of the internet. In fact, ancient philosophers in China and India have been studying change and innovation for thousands of years. To draw on a deeper reservoir of experience, my research has taken me to these ancient traditions—Taoism, Hinduism, and Buddhism—to uncover time-tested theories that you can apply to make you more innovative today.
The Wu Xing Cycle
China’s greatest thinkers documented their observations on change into a set of texts that now form the foundation of Chinese thought: The I Ching (Book of Changes), Tao Te Ching, The Art of War, and The 36 Stratagems. If you read these texts with the goal of gleaning lessons we can apply to the modern world, you will find several ancient frameworks that offer practical, accessible tools that we can use to establish continuous innovation in our lives and work.
The I Ching in particular identifies five phases of evolution, each represented by a physical element: metal, water, wood, fire, and earth, that repeat continuously in a pattern of “creative destruction” called the Wu Xing cycle. All innovations will pass through each of the five phases: metal into water into wood, then fire, and finally earth. If you want to be more skillful at leading an innovation (a new business, product, or idea) or simply want to avoid stagnation in your own life, your portfolio of ideas should cover all five phases, and you must continuously assess their movement through the cycle.
Innovations are born when an environment becomes rigid and lifeless. Without discontent, we would have no reason to reinvent new tools or ways of doing things. The metal phase occurs when your system is stuck in a fixed set of beliefs, assumptions, attitudes, or habits that it cannot respond quickly to new threats or opportunities.
I recently spoke with Kelley Rich, an intrapreneur who was working for SC Johnson during the 1990s. Kelley has launched many innovations within large companies and is now the executive director of commercialization at the IDEA Center at the University of Notre Dame. As a brand manager at SC Johnson, she witnessed the beginnings of the internet and knew that her organization would need an ecommerce solution to continue to deliver products to customers in the future. But the environment she faced was metal. Her coworkers warned that she faced an impossible mission. The sales team told her, “That’s not part of the plan.” Kelley knew it was time to move to the next phase.
Innovation begins to take shape when an individual or a small group of people realize they are stuck (in a metal state) and develop a plan to change the future. They begin to see that what they once viewed as impossible can actually be achieved. Just like Kelley began to shape her idea of an ecommerce solution, these are the ideas that you’ve considered but haven’t yet taken steps to move into action.
According to Alex Osterwalder, author of The Invincible Company, entrepreneur, and one of the world’s most influential innovation experts, not all ideas are meant to move out of this phase. His research on early-stage venture capitalism asked, “How many $100K investments would it take to find a winning innovation?” The results showed an alarming answer: 250. Only four in every one thousand ideas are able to scale and grow into a successful innovation. His advice: Learn to kill projects early. Be okay with retiring projects that don’t show results, so that you can free up time and resources to invest in those that bring evidence to the table.
Once you’ve found the right ideas, this is when they start to come together and grow. Kelley eventually found support for her ecommerce idea from SC Johnson’s then-president, David May. He rallied the resources to create a cross-functional team, led by Kelley, that would be dedicated to the new and emerging channel. This phase often requires dedication and faith, because progress can be slow.
Whitney Johnson, CEO of Disruption Advisors and an innovation and disruption theorist, describes the cycle of personal reinvention as an S-curve. When you begin a new idea or activity, you are at the bottom of the S-curve. You then enter a stage of slow growth and discomfort. Maybe you’ve taken on a new role and it feels like you have no idea what you’re doing. Successful innovators normalize this process. They recognize the phases of the cycle and become comfortable with discomfort, knowing that it’s a necessary part of change.
Those of us in the U.S. have unfortunately become overly familiar with fire over the past few weeks. Much like a wildfire can erupt from a small spark, this is when your idea scales and spreads. People join your side and want to be part of this new wave of change. Whitney Johnson calls it “the sweet spot.” Kelley got her new division up and running and gave e-commerce customers a way to buy the company’s products. Managing this phase requires an approach different from the patience the Wood phase demanded. It requires speed, creativity, and careful calculation of competitors’ behavior.
Every breakthrough innovation or new skill eventually matures and settles. It becomes like earth: stable, consistent, and reliable. What made you successful during the Fire stage will not be what keeps you successful during maturity. Your continued success depends on consistency rather than unpredictability. For many internal innovators, this is the time to pass the baton to those who excel at management and execution.
The cycle repeats
This cycle then repeats itself. You want to hold onto Earth as long as possible, but you will eventually grow stiff, return to Metal, and be reborn. Each phase of innovation presents unique challenges. Companies and employees that intend to last long-term will survive not by hoping for a sustainable Earth state, but through continuous reinvention.
Not long after Kelley had established a successful ecommerce division, the dot-com bubble burst. The Earth phase returned to Metal. Kelley did not view it as a failure, and her leadership did not punish her radical ideas. Rather, they gathered and merged her learnings from the project to prepare for future opportunities.
You should strive to find balance across all phases. I asked Kelley whether she tends to focus on one single innovation or many. She replied, “I always have multiple concepts that I’m exploring at any one time.” Innovation theory tells us to invest 70% in core products and activities (Earth), 20% in new adjacent activities (Fire), and ten percent in radical, disruptive ideas (Water and Wood). We must also be continuously killing off ideas that have passed their expiration date (Metal).
In my own life, I see reflections of each phase. After a few years of learning guitar, I’ve labeled it as Metal. It feels like a heavy chore that no longer brings me joy so I am hanging up my guitar for a while. I am passionate about cooking and want to write a cookbook someday—that’s still in the Water phase. Saving money for my three kids’ college education represents Wood. They are starting a new school year while my wife is stepping into a major career opportunity—a time of Fire for our family. I made some major diet and exercise changes earlier this year, and my habits have settled into Earth, dependent on my consistency and dedication to maintain.
Innovation and continuous reinvention are critical to our survival—as a society, in our companies, and as individuals. Your own success depends on your ability to welcome constant change and create an environment of innovation.
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