Over the past two years I’ve had the opportunity to meet many people over many different contexts, both professional and non professional, and degrees of personal involvement. One interesting aspect of these conversations was observing how different people address the problem of how to define Innovation and, more interestingly, how they avoid defining it even though they have to deal with it.
These observations have made me think a lot about the concept of “Innovation” and the implications of failing to face it the right way. I’m not sure if I have the right answer, but I’m pretty convinced about what the things are not. That is why, I would like to share my thoughts with you and, may be, we could reach to some conclusions together …
Let’s start from the beginning …
Wikipedia defines Innovation like this:
Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are readily available to markets, governments, and society. Innovation differs from invention in that innovation refers to the use of better and, as a result, novel idea or method, whereas invention refers more directly to the creation of the idea or method itself. Innovation differs from improvement in that innovation refers to the notion of doing something different (Lat. innovare: “to change”) rather than doing the same thing better.
Even though it is reasonably clear and descriptive, it manifests that it can be a very blurry concept whose boundaries can become very tricky once you start digging into it. Let’s see one straightforward example from this very same definition:
- “Innovation is the creation of better …” but, “… invention refers more directly to the creation” … So … who really creates?
- “Innovation is the creation of better or more effective …” but, “… Innovation differs from improvement” … But … doing something better is not a way of improving it?
- The same Wikipedia article is completed with “multi-dimensional views” and “inter-disciplinary views”.
To make things easier, it is not uncommon to see people use the word “innovation” to push their own interests. As you can imagine, this doesn’t help clarifying our mental structures. Don’t you think so?
That is why I can understand the confusion and the paradigms about innovation that I’ve perceived over the past couple of years. I have been confused too, and more than I would like to admit…
However, this definition has something missing: the purpose of Innovation; the “why”; its very reason of existence. And this is “competition”. In other words, Innovation is driven by competition forces that take place in a competitive market. Without this context, talking about Innovation is, in my humble opinion, meaningless.
The Innovation Paradigms…
Having in mind this competitive market view of the world, I would like to invite you to go through the assertions and paradigms about Innovation that I’ve just told you about:
Innovation = Continuous Improvement
This paradigm it is usually very convenient because it makes you feel good: while you “innovate”, you comply with your processes, certifications and governance frameworks (ITIL, ISO, etc.). It looks an excellent deal!
There are, of course, points in common. Certain incremental innovations could be considered part of a continuous improvement commitment. However, Innovation is more about doing different things or doing them in a different way. And we all know that Processes are about repeated workflows, activities and experiences over time. Processes hate things that change.
But, more importantly, Continuous Improvement processes are very unlikely to make you more competitive in the marketplace. On the other hand, Innovation is driven by market competition. So, if there is anyone that will make you more competitive, that is the Innovation.
Innovation = Product/Portfolio Management
Depending on the product, service and/or business type, this correlation might be closer to the truth. But, though improvements on your products can definitely make you more competitive, it is not necessarily so. Likewise, enhancements on the way you market them can help you compete, but not necessarily either.
You may be thinking that Innovation has to do with de degree of success that your improvements might have in the market. And, therefore, success is THE key. Success is always key, but what I am trying to point out is that a successful Product/Portfolio Management and Innovation are different things. Let’s see some differences:
- Product/Portfolio strategy may be the reason why you innovate, but it is not the Innovation itself.
- Product/Portfolio Management involves many other activities that cannot be considered Innovation: Life Cycle Management, roadmap, readiness management, partner management, market research, benchmarking, etc. In other words, you introduce innovations in your Product or Portfolio, but the Management Process is not Innovation itself.
- You can also innovate in more areas of the value chain than Product/Portfolio Management: operations, organization, procurement, finance, logistics, etc. In other words, Product or Portfolio innovations are a subset of everything you can do.
Unfortunately, despite you can innovate in Products or Portfolio you can still think that you are innovating when you are not. So, watch out! Let’s see a couple of examples:
- The “Follow the Leader” strategy. This is, by definition, not Innovation because someone else is doing that for you. I would like to point out that this pattern/situation can also happen with Industry Analysts (i.e. Gartner, Forrester, etc.) and not only with our industry peers. Many people only do/follow what an analyst say and, of course, this is not Innovation. Anyway, it is possible to compete successfully in the marketplace with this strategy and it might be the right path for many businesses from a Product/Portfolio Management perspective.
- Distribution Channel strategies. If you act as a VAR or an ISV for a number of brands you improve your Portfolio whenever those brands update their own. But, clearly, this is not innovation: it is distribution.
- Consider the “Innovation” as a tool to keep prices higher. But this is the application of marketing tools and techniques, and, therefore, they are not Innovations at all.
Image source: http://bit.ly/Re78pI