90% of ideas never go beyond idea generator’s desk; 3% of the remaining 10% obtain backing to become projects, with less than 1% being commercially launched
This year, LinkedIn listed “innovative” as one of its top 10 overused terms and I don’t wonder at why: anyone who works anywhere is likely being asked to “innovate” and so many would perceive the value of innovativeness in a potential hire as high. Why is innovation so important lately – it’s not a new term, but it definitely has that “buzzword” quality about it and like most buzzwords, the what is of innovation is often misunderstood and misused. Nonetheless, just because it is a buzzword does not necessarily make it a dirty word nor does it imply that the concept is fleeting, and especially in this case.
So this might not be a complete guide to innovation, but some major ideas and theories to inspire your innovative endeavours.
What is innovation?
“To raise new questions, new possibilities, to regard old problems from a new angle, requires creative imagination and marks real advance in science.” Albert Einstein
Innovation is the transformation of an idea into a new product, service or process that is brought to market or implemented – if it remains an idea, it is not an innovation.
Joseph Schumpeter’s definition economic innovation:
- The introduction of a new good — that is one with which consumers are not yet familiar — or of a new quality of a good.
- The introduction of a new method of production, which need by no means be founded upon a discovery scientifically new, and can also exist in a new way of handling a commodity commercially.
- The opening of a new market, that is a market into which the particular branch of manufacture of the country in question has not previously entered, whether or not this market has existed before.
- The conquest of a new source of supply of raw materials or half-manufactured goods, again irrespective of whether this source already exists or whether it has first to be created.
- The carrying out of the new organization of any industry, like the creation of a monopoly position or the breaking up of a monopoly position.
Schumpeter attributed innovation to a process he called “creative destruction” whereby the old is ‘destroyed’ by the new causing free markets to continually evolve.
What makes a company innovative?
“When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.” Steve Jobs
There are a few companies that get mentioned in most conversation about innovation: Apple and Google are two of the more notable ones. So what is the secret ingredient that makes these companies come up with great products that change the way we do things? Both companies have a slightly different approach, but there are certain environmental factors that should exist within a company to make it easier for good ideas to come to fruition and an internal spirit of innovation to sustain the momentum to repeat the process.
Coakes and Smith suggest that organizational knowledge depends on the qualities of the relationships between people and I tend to agree. By providing places and opportunity for the creation and support of innovatory ideas, companies facilitate the organic formation of communities of innovation and the identification of innovation champions. Ideas are like anything, they need a champion, someone to believe in them, or otherwise they will wither.
Innovation champions can be found in most companies – management might already be aware of employees that are active in supporting innovation, but in some cases, they might be waiting, dormant, for the time when management they will be motivated and supported by management.
6 Things Champions Require In a Workplace
- To work within an innovative environment
- To work with other innovators
- To be challenged and to learn
- To be socially connected within and without the organisation
- To be recognized for their work
- To work for management that supports them
Thus armed with a strong community and leaders, companies need to have a game plan that will position them for success. An innovation is not just an idea, it must go to market in order to be affirmed.
How do you innovate?
“If you’re not failing every now and again, it’s a sign you’re not doing anything very innovative.” Woody Allen
Clayton Christensen propounds a “disruptive approach” to innovation relying on the assumption that companies innovate faster than people’s lives change and the resulting products are often too good, too expensive or too inconvenient (sort of like the iPad in Canada). The easiest way, then, to arrive at an idea that will move up market and displace established competitors is too look at focusing on ideas that:
- Scratch an unscratched itch – Look at ways that people are using existing products in ways they are not meant to be used for lack of better product. Do what the established competitor does not do and pick up where they fall short.
- Make an ugly business attractive – Find the market segment that nobody wants and innovate for them.
- Democratize a limited market - Make the product accessible to people who previously could not because of some prohibitive factor, most often cost.
Besides deciding what market you will compete in, you need to develop a playbook by a historical analysis of major failures and successes in that market to map your innovation strategy.
Read an article from HBR on Mapping Your Innovation Strategy
Innovation is not a new concept – humans have been innovating for as long as there have been humans, it is what sets us apart from the other animals. On the other hand, this new articulation of flattened hierarchies and collaboration as drivers for innovation should change the way companies look at idea generation and bringing products to market.
So what’s the big rush anyways? Before the buzz of innovation, were there no good ideas? Was every company just rehashing old ideas and sticking to the status quo all of the time? I think not (ahem, Fordism was a pretty big deal). But several factors, the biggest being globalization and technological/digital advancements, have allowed some innovations to reach people and places in ways most traditional companies could have only imagined. I am sure there were more than a few companies with billions of dollars at their disposal and countless employees look at innovations like Facebook and thinking: “What are we doing wrong that we did not deliver this first?” It is the age of the start-up (another buzzword IMO) and existing companies want to play too.