Innovation is something every company strives for, talks about, says they value and wants to do better. But, what do they mean when they say the word innovation? Is it the lone inventor in a lab yelling “Eureka!”? Is it what happens when a big companies spend years of time and millions of dollars rolling out their next product line?
It’s not invention.
Innovation is not invention. It comes from the Latin innovare “to renew or change,” so even the Romans agreed that the two are different things. It’s not necessary to discover some principle previously undiscovered or create some widget the world has never seen before. That’s invention. It can be a part of innovation, but either can exist without the other.
Innovation, especially in business, doesn’t need to be limited to a product. Great technology and technical discovery can lead to great innovation. Invention can also lie fallow. There is no shortage of technologies that do not have a use in the marketplace.
For the purposes of companies trying to deliver something of value to a customer, innovation has to eventually lead to something that is put into practice.
It doesn’t have to be a product.
That something can certainly be a product. Some thing that satisfies a need in a way that is new or unique. Think of the way a Digital Video Recorder (DVR) allows consumers to decouple how they watch a television from when it airs. It is really an extension of the VCR, but it’s a really good one.
It can also be a service. FedEx sells the assurance that your package will be there tomorrow. The addition of Geek Squad to Best Buy’s offerings brings an increased perception of support to anything you buy.
Apple does great product innovation, but they do great integration of software and service innovation, as well. iTunes gets a lot of credit for sales of iPods (and Macs and iPhones, too!) It should, there were plenty of mp3 players on the market when the first iPod was released. Not everyone thought it would be successful right away.
Stephen Baker, an analyst at NPD Intelect, said that the iPod will likely stand out for its large storage capacity but predicted that the device may have trouble digging out a niche in the market.
October 23, 2001 5:55 PM PDT
Some innovations come in the way a company sells its products. Dell grew as a PC company on the idea of ‘configure to order,’ which was a big change from the shipping of pre-configured, mass produced computers sold to retailers by other computer companies. The customer got to pick what went into their PC, and got it shipped to their door.
It can be a new way of NOT selling. Automotive leasing is an innovation that changes the nature of the business transaction, but not the actual product.
Companies can deliver through process innovation. It can be a new way of manufacturing an existing product that allows a company to reduce costs. It may be a Just in Time inventory system that allows a manufacturer to carry few parts–especially in industries where components can become obsolete quickly, like in the Dell example above.
Cloud Computing has changed the nature of how we think about software. We don’t have to a have a big server for a Customer Relationship Management system. We just create an account on Salesforce.com. By selling seats instead of big software packages, software companies have lowered the barriers to using their products.
The companies benefit from more regular, repeating revenue. Requiring an account in a Software as a Service model also makes pirating software more difficult.
Innovation can be culture.
Google and 3M are great examples. Depending on who you ask, 3M allows people to have somewhere between 10% and 20% of their time for ‘putter time.’ These are projects that aren’t a part of the tasks they’ve been asked to do, just something that they find interesting.
Google allows engineers to spend 20% of their time on project that don’t originate from management, nor are they tracked by the company.
Both companies point to many successful products that emerge from this freedom they give their employees.
Atlassian Software takes this even further with ‘FedEx Days.‘ Atlassian uses the idea of 20% time to give the engineering team 24 hours, quarterly, to work on any project that is something that they think can be useful for the company. They pick. They work. On the second day they make their ‘delivery.’
Innovation can be methods and process.
It may be in the way products are developed. We’ve come a long way since Henry Ford said of the Model T, “Any customer can have a car painted any color that he wants so long as it is black.” Still, Ford’s idea of simplifying the manufacturing process and reducing the cost of a vehicle, along with paying his workers more so they’d stick around and be able to afford one, were innovation, not invention.
We can do market research. We conduct focus groups. We can do ethnography. We can work to understand the customer and their context. We can brainstorm. The process of how we decide what to make has changed.
We even crowd-source design. We co-create. We create products like Facebook, that have a framework and existing functionality, but allow people to develop applications that they can sell back to the user base that enhance or change their experience with the product.
Innovation can be physical, software, service, social, cultural or anything else that applies an idea in a way that makes a system work better. In the world of business, that means either making the experience the customer has better, or making the company better in some way, by applying some principle, idea or tool in a new way.
With all of these things it is, what can we say innovation is not?
Innovation is not a new technology, unless it is applied. Innovation is not a new scientific discovery, unless someone puts it to use. Innovation is not a new idea, unless that new idea is shared and put into action.
This is still a wide definition. That’s okay. It leaves a lot of room to do interesting things that we can call innovation.