Technology Does Not Equal Innovation

by Jeffrey Phillips

I had the opportunity to speak to a group at a university recently about innovation. In fact, I've spoken to four universities about innovation in the last few months. There's a growing awareness that innovation needs to happen in university settings. This would include innovation on the administration of the university, in the teaching methods and in what is taught. But that's a sideline to what I want to write about today.

In my most recent speaking engagement I was confronted by a senior faculty member who argued that all this talk about "innovation" was pointless, and missed the main target, which was that we needed more focus on science and engineering education. In his mind, innovation was equated to technology, and only scientists and engineers could bring new technologies to life. While I agree that scientists and technologists can bring innovations to market, I'd argue that that definition of innovation is awfully narrow. It seems to me that innovation can occur in many avenues that have little or nothing to do with technology, engineering or science.

In fact we have recently worked with a financial services institution, a health care insurance firm, a life insurance firm and several other firms in the services industries where there are no physical products developed and few if any engineers or scientists. Yet these firms are innovating. Innovating their service models, customer experiences, processes and business models. Apple, held up as the ultimate innovator, is a technology firm but innovates instead more around user experience, linkages, partnerships and content.

There are a number of firms that innovate around technology and science, so I don't want to downplay the importance of technology in innovation. However, we do need to understand the balance between product innovation and all other kinds of innovation, and the importance of engineering and science to innovation. It's really a question of set theory. Technology innovation is a subset of innovation generally, and while all technology innovation is innovation, all innovation is not technology innovation. As much as it may pain my engineering friends to say it, there's a lot of innovation happening that has little or nothing to do with technology. Conversely, there's a lot of technological research that will impact our lives through new innovations as products and services.

This dichotomy also explains a lot of angst in the intelligentsia about the termination of NASA's return to the moon program and the decreasing amount of federal research generally. The belief is, and I agree with this, that we learn more and capitalize on that knowledge when we explore space flight or invest in primary research. But curtailing space flight does not necessarily make the US less innovative. It leaves us in a situation where, from a governmental point of view we may become more dependent on the Russians or Chinese to put vehicles in space, or perhaps it makes available a private enterprise approach to space flight. But reducing investment in these areas doesn't mean we are less innovative, it just spreads out the responsibility for innovation more broadly. But that had already happened in the 70s and 80s, as private enterprise took on more direct research and investment and the federal government's role declined.

OK, enough of the tangent. Innovation depends on creating and developing new ideas. Some of those insights are based on new technologies or improvements to existing technologies. Some innovation, however, is based on insights about services, processes or business models, and don't rely on technologists or engineers for insights. To claim that all innovation is technology innovation, and that without engineers and scientists no "real" innovation can be accomplished is to view the world of innovation with a very narrow lens.


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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Innovation Perspectives - Matching Possibilities with Needs

This is the fifth of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on "What roles do engineers and marketers play in an innovation setting, and what conflicts can arise based on their perspectives and approaches?" Here is the final perspective in the series:


by Rowan Gibson

Corporate innovation has traditionally been driven from the technology side; from departments like R&D and engineering. It's an approach that can be very successful. Indeed, it has often led to great breakthroughs. But if a company wants to win in today's value-based economy, this is no longer the best way of doing things.

Instead, organizations must learn how to drive innovation from both the technology side and the customer side. Sure, innovation can spring from a technological discovery that is then leveraged to meet a customer need. But, conversely, it can be driven by an unmet customer need that inspires a new technical solution. So the challenge for companies is how to get better at bringing those two sides together.

In Boston Consulting Group's "Innovation 2009" survey, they found that roughly half of all the senior managers they interviewed were unsatisfied with the financial return on their innovation investments. This doesn't surprise me at all. Even when an organization invests substantial amounts in R&D from year to year, it can find that few of these innovation dollars actually translate into significant commercial opportunities.

Take GM. The firm has pumped more money into R&D than any other company on earth over the last twenty five years and it's currently struggling just to stay alive! Where GM has clearly failed is in linking its technological research to the articulated and unarticulated needs of its customers. So all of that engineering effort has produced very little in terms of customer value.

How can a company avoid this expensive innovation trap? Consumer products giant Procter & Gamble provides a powerful lesson in how to break out of the technology-centric mindset. Back in the 1990s, a group of P&G's senior managers woke up and realized the company had missed a series of big commercial opportunities by encouraging innovation solely from the R&D department; by historically being too technology-driven.

For example, P&G's Oral Care division had looked into the idea of adding baking soda to toothpaste as a way of reducing plaque-related periodontal diseases. The R&D people tested it and concluded that, from a technology perspective, there was no merit in the idea. There was absolutely no way they could clinically demonstrate any benefits. So they said, "OK. It's just smoke and mirrors. We're not interested in it." But then some of P&G's competitors added baking soda to their toothpaste - along with a premium price tag - and made a huge business success out of it. How was that possible? It was because, even though the idea didn't work as a piece of technology, it worked in the consumer's mind. It leveraged the fact that generations of dentists had told people that, under certain circumstances, they should use baking soda for oral-care-related problems. So rather than being a technology-based innovation, this opportunity was based on a deep consumer need that looked, at least psychologically, as if it was being met.

This, and a few similar experiences, began to hammer the message home to Procter & Gamble that innovation is not just an R&D game. Of course, technology is a very important part of the equation, and P&G probably still outspends most of its competitors on technical research, but what senior management finally understood back then was that it's only half of the loaf. That was what prompted them to develop an internal strategy aimed at bringing both the technology and the consumer side together. It was called "Matching what is Possible with what is Needed."

This was when P&G's marketing people made the fundamental switch from managing brands to managing consumers' needs. For example, the company discovered when they talked to consumers that they assumed soap was not good for their skin (P&G had been making and selling soap since 1837!). So they went back to R&D and combined the cleansing action of a soap bar with the moisturizing effect of a lotion to create Olay Body Wash, which was a big commercial success. In fact, in 2009 it was voted 'Product of the Year' in the Body Care category by the largest consumer-voted program in North America to recognize innovation among consumer packaged goods.

When P&G listened to consumers talk about hair care, they found that people thought shampoo would make their hair shiny but that it wouldn't actually make it very healthy. So they asked the scientists in R&D to add some vitamin technology to the shampoo, which was the birth of Pantene Pro-V (pro-vitamin) products. Today, they are the top-selling hair products in the world. The range includes products designed exclusively to meet specific consumer needs: from the hair textures of different ethnic groups, to color-treated hair, to hair that needs protection from urban pollutants. And when consumers said they would like a hairspray to provide hold but without the gluey stiffness makes hair impossible to comb, P&G responded with Pantene Pro-V Flexible Hold Hair Spray, which was an instant hit.

This is not to say that innovation at P&G can no longer originate on the technology side. Far from it. But the company has managed to strike the right balance between technical R&D and customer-centric marketing so that the two sides work symbiotically to create new value. That means the correlation between P&G's innovation investments and commercial outcomes is now much stronger than ever before.

Sadly, in many other companies we still find a great divide between these two sides of the business when it comes to innovation. We find engineers and scientists locked away in isolated research labs, assuming that marketing's job is simply to advertise and sell their finished inventions. We find R&D people protecting their turf rather than embrace new concepts like crowdsourcing and open innovation - where customers and other external parties become co-inventors and co-designers. On the other hand, we find marketing and sales managers who are far more focused on the features and benefits of their offerings than on the unmet needs of their customers. And when R&D comes up with a truly disruptive innovation, we often find the marketing department arguing vehemently against it on the basis that it would cannibalize their existing business.

So how is the situation inside your own organization? Have you achieved a high level of synchronicity between engineering and marketing? Are your marketing people generating a constant stream of quality customer insights to guide your engineers on where to innovate? And are your engineers producing a slew of new technical possibilities for your marketing people so they can leverage these to address unmet customer needs?

In short, is your company already adept at matching what is possible with what is needed, and vice versa? Or does it need to get a whole lot better?


You can check out all of the 'Innovation Perspectives' articles published so far from the different contributing authors on "What roles do engineers and marketers play in an innovation setting, and what conflicts can arise based on their perspectives and approaches?" by clicking the link in this sentence.

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Rowan Gibson is widely recognized as one of the world's leading experts on enterprise innovation. He is co-author of the bestseller "Innovation to the Core" and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

Innovation Perspectives - Operationally Smart Marketing

This is the fourth of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on "What roles do engineers and marketers play in an innovation setting, and what conflicts can arise based on their perspectives and approaches?" Here is the next perspective in the series:


by Mike Brown

It's natural for engineers and marketers to be at odds over innovation.

Engineering generally focuses on internal perspectives related to conformity, efficiency, and the cost side of the income statement. Success is defined as just enough performance for the costs incurred.

Marketers, on the other hand, are natural customer advocates, espousing innovation and differentiation in the customer experience a brand creates. So while engineers target a threshold level, marketers want to maximize and create advantage from a customer's brand experience.

Growing up in the B2B transportation and logistics business put me at the heart of this struggle. Our "engineering" group was called Operations Planning. Despite a different name, the challenge was similar: trying to balance a transportation network for performance and cost efficiency while maximizing customer value. In this type of organization, it's clear engineering has the first veto on any product or service improvement innovations. This powerful position necessitates finding ways to meet engineers on their own ground to try bringing them along an innovation path.

To improve the odds of innovation success, we've employed an approach a consultant originally dubbed, "Operationally Smart Marketing."

The gist of it is the best way to drive innovation in an operationally-oriented environment is for marketers to intimately understand all the roadblocks engineering will surface and then innovate around them. This strategy may seem to fly in the face of a customer-first marketing orientation. Yet it's more proactive than holding strong consumer-oriented convictions that stand in the way of selling in and implementing dynamic new innovations that never benefit anyone.

Adopting an operationally smart marketing strategy starts with addressing four questions you'll need to thoroughly explore with engineering:

• What makes money in our business? Spend time to understand the engineering view of what drives profitability. Are there certain lower-cost-to-serve customers or markets? How do through put, density, product mix, geography, or other relevant operational factors in your business disproportionately drive profitability? These answers are a fundamental part of your innovation target.


• What factors drive outstanding efficiency and operational performance? Understand critical steps in production or service processes impacting efficiency. What are the critical success factors from an engineering or operational perspective in driving peak performance?


• How can customers contribute to efficiency and performance? The concept of high performing customers is intriguing, particularly in service businesses. Think about how Southwest Airlines manages a passenger's experience to ensure it turns planes quickly. Are there things customers can do in your business to allow it to simultaneously operate more efficiently and provide higher customer experience value?


• Is there anything else? This question comes from experience. Invariably after exhaustive discussions with engineers on the first three questions, when it appears everything has been covered, some other salient piece of information surfaces. It's become apparent engineers often internalize so much of what they know, it won't occur to them a deal-breaker fact they consider quite obvious is hidden to outsiders, so keep asking questions.

Doing a thorough job answering these questions creates a much richer understanding of potential constraints standing in the way of unbridled innovation. With all this knowledge, the creative challenge is clear: incorporate the constraints into ideation efforts. Force yourself to creatively address what customers are looking for from your brand. Keeping your original customer experience innovation goal, think about how you can work in and around your business constraints to best deliver value.

While this approach isn't always successful, it at least opens the door for marketing to create a dialogue with engineering about improving a brand's customer experience value. With the conversation started, it also provides an opportunity to potentially help engineering think about some of its own processes in innovative ways, further adding value inside the organization. And ultimately, being able to talk with engineering on its own terms will earn respect and open doors when you need to push harder to make innovation happen.


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on "What roles do engineers and marketers play in an innovation setting, and what conflicts can arise based on their perspectives and approaches?" by clicking the link in this sentence.

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Mike Brown is an award-winning marketer and strategist with extensive experience in research, strategy, branding, and sponsorship marketing. He's a frequent keynote presenter on innovation and authors Brainzooming!

Innovation Perspectives - Engineers, Marketers and Innovation

This is the third of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on "What roles do engineers and marketers play in an innovation setting, and what conflicts can arise based on their perspectives and approaches?" Here is the next perspective in the series:


by Jeffrey Phillips

First, let me say that I am ably suited to answer this question, since I am both an engineer (undergraduate) and a marketer (graduate degree). I've worked in the technical trenches and, frankly, left them as quickly as possible, and worked in a number of marketing roles since my MBA. I left the engineering world because it necessarily demands a level of specificity and exactness that I find boring and tedious, and demands attention to detail that I sometimes lack.

So, let's talk about engineers first. What traits are associated with engineers, and does their education, focus, attitudes and skills position them well for innovation? Most engineers I know are very interested in solving problems, which suggests they have a proclivity for innovation. However, the focus on getting to a solution quickly, and detailing a solution exactly, often hampers them from bigger picture or disruptive innovation. Engineers and accountants like things in black and white - no shades of gray. Innovation often happens and requires some ambiguity for success. Engineers like to build things, which again indicates a proclivity for innovation, especially prototyping. However, they are often more entranced by once concept or idea than they are the process, which narrows their thinking and focus too early. Good engineers can be excellent problem solvers, but don't often think of themselves as "creative" and too often don't have good understanding of market needs and trends.

The market needs, trends and opportunities should come from marketing, if the marketers are doing their job well. Unfortunately, as narrowly defined as many engineering jobs are, marketing suffers from the reverse - a too broad definition. Today marketing can mean public relations or PR, Marketing communications, trade show management, conferences and events, product management, social media and a host of other capabilities. Marketing has become too far flung, and to a certain extent has lost sight of the base purpose of marketing - to identify segments and customers who have needs, and understand how to fill those needs effectively. If marketers fill that function, then they are innovative in nature, because they want to know and understand customer needs. Too often marketers are more worried about the copy on a new ad, or who will be at a tradeshow, and they fail to understand customer needs and develop scenarios about the market of the future.

So, what often happens is that marketing is too distracted to do what should be it's primary job - understand customers and develop potential product and service ideas. Engineering and product development shows up and doesn't get much insight into actual customer needs, so the engineers go off to explore interesting new technologies that may, or may not, be important to customers. Neither, and both, are at fault.

Engineers should demand that marketers do a better job of defining near term customer needs and emerging customer requirements or markets. Without that insight, it is difficult to build interesting new products. Engineers on the other hand need to be more ready to engage the market with rough, fast prototypes, and work to an iterative model. If there is an issue in most firms, it's that we all have become too far removed from the customer, and fail to understand their wants and needs.

In my mind, that's marketing's job, to discover the needs and translate them into specific opportunities for engineers to build.


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on "What roles do engineers and marketers play in an innovation setting, and what conflicts can arise based on their perspectives and approaches?" by clicking the link in this sentence.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Innovation Perspectives - Engineering versus Intangible Value

This is the first of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on 'Roadblocks and the Critical Relationship Between Marketing and Engineering in the Cause of Advancing Innovation'. To kick it off, here is my perspective:


by Braden Kelley

Let me start off by recommending that you watch the movie I've embedded, as it does a great job of describing how there is often an engineering solution to a problem and a marketing solution to a problem. This in part explains why there is often a tension between marketing and engineering when it comes to new product development - they see different solutions, assign value differently, and view success in divergent ways. So, please enjoy the video, and my article will continue below it:





So in the future, with the problem at hand, you might want to ask yourself - "Is the problem best solved by changes to the real value, redefining the intrinsic value provided, or a bit of both?"

Of course it is very hard for people to ask these questions honestly as they have a default response, but asking them in a cross-fuctional environment may yield a more holistic and informed response. And after all, many of the barriers that people tend to erect in the achievement of something are often because they didn't feel involved in the decision-making process.

So, what are some of the barriers that people erect in a sometimes tension-filled environment?

1. Isolation - You just avoid communicating with the other side as much as possible


2. Stonewall - You just do what you would do anyways and ignore the input from the other side


3. Passive Aggression - You consciously choose to behave in a way that will cause the effort to fail, so that ideally you get your way instead


4. Build a Fortress - You build complex written rules of engagement for your department saying that it has to be this way because you're too busy and these rules will help you be more organized


5. Omission - You take the inputs but then you don't do anything with them (marketing doesn't promote a feature, or engineering doesn't fully develop it

The biggest danger to the cause of advancing innovation when it comes to the engineering and marketing departments is that the relationship develops into one without constructive conflict and without healthy collaboration. For innovation to be repeatable in an organization these two sides must share openly, have their perspectives valued, and contribute to a conversation. Marketing and engineering hear different aspects of the voice of the customer in their interactions with them, and they approach solutions to problems in different ways.

I would even argue that there is probably no more important set of cross-functional relationships than those between marketing and engineering, and that their health will determine the future success or failure of the organization. The executive team should consciously monitoring the health of these relationships, because when they start pulling in opposite directions, the entire organization could be ripped apart.

What directions are these two organizations pulling in your organization?


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on 'Roadblocks and the Critical Relationship Between Marketing and Engineering in the Cause of Advancing Innovation' by clicking the link in this sentence.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Are engineers good for innovation?

by Stefan Lindegaard

I have been pondering on this since I had some comments on my The Faces Of Open Innovation post where I expressed some concern that most of the profiles working with open innovation had an engineering background.

In the blog post, I mentioned that engineers do add value to innovation, but we need to get a broader focus in the overall innovation process by giving room to other functions and competences as well. Innovation should be about much more than just technology and products for which many engineers have a tendency to over-focus on.

Two comments in particular caught my interest. The first one went like this:


"Why so surprised at the preponderance of engineers in the open innovation community? Good engineers are, by necessity, innovative. This is not so obvious with other professions. Engineers are prone to share, to seek out other engineers when they face a mental block."


Wow! Are good engineers by necessity innovative? My response is whether you really can be innovative when the next sentence mentions this is not so obvious with other professions. This is borderline arrogance and to some extent hubris.

In today's innovation environment, I believe you need a T-shape in which you bring strong depth to the table. Engineers often do this, but to me this is worthless unless you also have an understanding and empathy for how other business functions and competences work and add value to the products and services to be created.

You could also raise the question whether the limited thinking displayed in the comment is not exactly the reason that have caused so many products to be brought to market that were filled with all sorts of doodads and capabilities that the engineers thought were just fantastic, but that real consumers had no use for. I think it is fair to say that how this guy defines innovation is skewed toward the ability to solve technical challenges, which is only part of innovation.

The second comment went like this:


"The natural place for open innovation to start is in the technical function, in my view because it can be neatly defined and encapsulated without excessive risk."


What is actually being said here is that open innovation should be defined from an engineer's perspective. Hmm, I would argue that we should define and embrace innovation from the customer's and/or end-user's perspective as they will end up paying for what we do. It is important we understand this and it is my experience that engineers as a profession often do not get this. Other professions and business functions better understand this making them just as important and valuable - if not more - in the innovation process.

Engineers, of course most of you are good for innovation. You should be proud of what you bring to the table, but you also need to wake up. The way we innovate is changing fast and engineers need to adapt to this just as everyone else. This is especially true as we open up our innovation processes to external partners rather than doing almost everything internally.

Perhaps you should try one simple approach next time you face a mental block; seek out non-engineers. This might broaden your horizon which I am sure will benefit all of us.

I look forward to your comments on this.

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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.