Schafer: Innovation, one business situation at a time

Innovators International calls its clients "members" and brings them together for regular meetings, but it's not networking they are doing.

Executives of its member companies want to work, not network. And they want to work on their real problems in innovation.

Innovators International, of Minneapolis, leads two big "gatherings" a year, with smaller work sessions throughout the year. Executives of its 42 member companies -- mostly big global enterprises -- also meet with each other, sometimes arranged by the company and sometimes at meetings that Innovators International founder Uri Neren assumes he never learns about.

Neren said one of his board members put it this way: "There is that one hour of every conference that is the entire reason as a senior person you go -- the private reception with a few other executives. Well, we took that and made it our entire business model."

Despite the organization's relatively small size, what's happening here is the combination of a couple of pretty significant ideas that may have lessons for lots of organizational leaders.

One idea is what's usually called open innovation. It starts with a recognition that the world is a big and dynamic place with lots of smart people and good ideas. Any organization hoping to keep ahead has to get ideas and innovations from outside the four walls of its facilities. Information has to flow through those walls -- in and out.

Open innovation can be difficult to execute, as issues around who owns the innovation can be tricky to manage. That's just one aspect of what makes innovation so difficult. It's well worth the effort, however, as even young companies need to refresh products and services and seek new ways to run the organization more efficiently.

It's not like passive networks have no value. But how many of those 500 connections on the social networking site LinkedIn can be asked for substantial help on an innovation challenge? It's like a 10th-grader who has 196 Facebook friends but would be lucky to get more than a handful to help with that day's toughest calculus homework.

Networks tend to be filled with industry contacts, another thing that limits their usefulness. Look how many industries get turned on their heads by upstarts who didn't know that what they tried wasn't supposed to be possible, because they hadn't previously worked a day in the business.

Maybe a lot like other innovators, Neren's business has evolved since its start. He got rolling with a research assignment from the Mayo Clinic, which in 2007 wanted to know all about the field of innovation and how big companies did it. The Mayo brand opened some doors at some very big and successful companies.

"We developed all these relationships," Neren said. "A number of folks kept asking me, 'Can we pay you to bring us together?'"

At first it was nine big Twin Cities companies, and the list quickly expanded. There was later a separate group in Europe and a group for other U.S.-based companies, and now it's one global group, with new members from India and Bloomington -- QBP, a distributor of bike products. The Star Tribune Media Co. is a member. Membership is by invitation.

Patagonia's vice president of advanced research and development, Randy Harward, came to a gathering in 2011 with a proposed initiative maybe best summarized by an ad that later ran with the headline "Don't buy this jacket."

Patagonia, an outdoor clothing and gear retailer based in California, has a long record of environmental activism. As Patagonia's sales have grown, so, too, has its environmental footprint.

So Harward explained that Patagonia wanted to help teach consumers to buy fewer, but very high quality, products. The company actually wanted to sell less.

"Part of the discussion that day was how to gain share, sell more, set up tiered markets so that you can capture the bigger percentage at different price points," Harward said. "And the room fell silent."

Within minutes, however, Harward got what he had come to hear -- honest feedback from executives at organizations totally unlike his, like PepsiCo and Major League Baseball. Among other things, he was told to completely drop the suggestion that customers would have to pay higher prices. And he was encouraged to go ahead.

Rutherford said the most surprising part of that day was how engaged he became in trying to address the problems brought by others, like Andersen Corp. trying to work new ideas in window products around the constraints of building products regulations.

"That was almost as fruitful as being on the other side of the table," he said. "You don't do that at networking, right? Networking doesn't go to that depth. "