In a recent series of video interviews for The Refinery Leadership Partners I explored three common and damaging myths about innovation.
Thus, innovation the verb (i.e. process) and innovation the noun (i.e., result) can be applied to all instances of adopted change. For example, the first time companies used celebrities to endorse their products was a marketing innovation; when the manufacturer Pilkington invented float glass technology this was a process innovation; and when Netflix transformed how we access and consume movies and TV shows this was a service and business model innovation.
Myth 2 – Innovation is everybody’s job
Smart innovation is about balancing and adjusting the extent to which employees focus on exploration activities (i.e., being innovative) versus focusing on exploitation activities (i.e., being efficient and reliable). This capability to strike a balance, and when necessary adjust the balance over time, is known as organizational ambidexterity. The extent to which a company’s employees should focus on exploration or exploitation will depend on the rate and direction of change (i.e., the environmental velocity) in a company’s industry. The greater the industry velocity, the more a company should pursue exploration.
Myth 3 – Listen to the customer
When innovating, should companies listen to and learn from their existing customers? It depends! If companies want to develop incremental innovations that refine their existing offerings, then listening to customers will very likely be a good source of information. But if companies are aiming to develop radical or discontinuous innovations, then their existing customers are unlikely to value the performance attributes of the innovation. This is the logic behind this quote by Steve Jobs:
“It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them."
Thus, it is doubtful that companies will shape and create new markets by listening to customers who are on the whole comfortable with their current products and services.
One exception to this lesson is when companies observe and understand the actions and needs of creative consumers, defined as: "customers who adapt, modify, or transform a proprietary offering" (Berthon et al. 2007: 39). Creative consumers include individuals such as Walt Blackader, a ‘lead user’ who developed the sport of rodeo kayaking and associated products forit; and households in rural India that use their top loading washing machines to churn curd and make lassi, a yogurt-based drink. Creative consumers are the sources of many radical and discontinuous innovations because they possess and combine information on the problem/opportunity and information on the solution.
With much of the world’s corporate and public R&D budgets dedicated to developing new technologies that are then patented and embedded in new products such as medicines, cars, cell phones, computers, etc., it is easy to believe that innovation is only about new product development. Innovation however, applies to anything that can be changed and then adopted by users to address some form of problem or opportunity. Consider, for example, Pink Shirt Day, a ‘social innovation’. On the 27th February 2007 two Nova Scotia grade 9 students asked their friends to come to school wearing pink clothing as a protest against bullies who were tormenting a boy who often wore a pink shirt. This innovation was a novel way of protesting and raising awareness of bullying. It has since has been adopted by schools in North America, with the 27th February each year known as Pink Shirt Day.
Thus, innovation the verb (i.e. process) and innovation the noun (i.e., result) can be applied to all instances of adopted change. For example, the first time companies used celebrities to endorse their products was a marketing innovation; when the manufacturer Pilkington invented float glass technology this was a process innovation; and when Netflix transformed how we access and consume movies and TV shows this was a service and business model innovation.
Myth 2 – Innovation is everybody’s job
I agree that many companies probably need to do more innovation, but I think there is a stronger need for companies to do innovation in a smarter way. So I when hear the mantra that ‘innovation is everybody’s job’ I wince, because if everyone is innovating (and innovating all the time) that doesn’t leave many people to look after existing customers and to make sure they receive existing products and services in a way that will delight them.
Smart innovation is about balancing and adjusting the extent to which employees focus on exploration activities (i.e., being innovative) versus focusing on exploitation activities (i.e., being efficient and reliable). This capability to strike a balance, and when necessary adjust the balance over time, is known as organizational ambidexterity. The extent to which a company’s employees should focus on exploration or exploitation will depend on the rate and direction of change (i.e., the environmental velocity) in a company’s industry. The greater the industry velocity, the more a company should pursue exploration.
Myth 3 – Listen to the customer
When innovating, should companies listen to and learn from their existing customers? It depends! If companies want to develop incremental innovations that refine their existing offerings, then listening to customers will very likely be a good source of information. But if companies are aiming to develop radical or discontinuous innovations, then their existing customers are unlikely to value the performance attributes of the innovation. This is the logic behind this quote by Steve Jobs:
“It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them."
Thus, it is doubtful that companies will shape and create new markets by listening to customers who are on the whole comfortable with their current products and services.
One exception to this lesson is when companies observe and understand the actions and needs of creative consumers, defined as: "customers who adapt, modify, or transform a proprietary offering" (Berthon et al. 2007: 39). Creative consumers include individuals such as Walt Blackader, a ‘lead user’ who developed the sport of rodeo kayaking and associated products forit; and households in rural India that use their top loading washing machines to churn curd and make lassi, a yogurt-based drink. Creative consumers are the sources of many radical and discontinuous innovations because they possess and combine information on the problem/opportunity and information on the solution.
More innovation myths
For a comprehensive list of other innovation myths and associated lessons check out ScottBerkun’s excellent blog
Further Reading
This posting is based on research and content from the following publications:
Ian McCarthy
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It depends on how you define innovation. If we see innovation as change within a group, then people can become either pro or anti change. Their vote is important, no matter how low they sit.
ReplyDeleteReally useful blog post since it seems to me that the word 'innovation' is being bandied about a great deal at the mo. Thank you for the references to the articles.
ReplyDelete