Innovation - I know it when I see it...

by John P. Benfield

It's a sad indicator of the level of excitement in my life, but I have at least half a dozen conversations every month rehashing and debating the definition and nature of 'innovation'. You'd be hard pressed to find someone who will say that they don't know what innovation is, yet there's an incredible amount of fuzziness and outright disagreement over what 'innovation' is. Whether it's sustaining, disruptive, continuous, product, process, or paradigm, what really qualifies a change as an 'innovation'?

The Apple iPod has been touted as one of the most innovative products of the last decade. It's become such an integral part of our culture that the term "iPod" has become the generic term for MP3 players in the same way that Kleenex has for facial tissue. Yet when the iPod was released, it really wasn't anything new or revolutionary. It was released into a market that was already well saturated with MP3 players. It wasn't larger or smaller than other devices. The music quality wasn't fundamentally better than the best in class. Some would contend that it was the iTunes store that made the difference. But even the iTunes store was nothing new. Audible and MP3.COM had established the online audio purchasing model long before iTunes.

What Apple did is what Apple is good at. They took a number of existing ideas, bundled them together into a very slick, integrated platform and refined and polished it to a blinding shine (literally and figuratively). They made the iPod friendly, accessible and eminently desirable. They created new markets that embraced it and the iPod became the innovation that previous products couldn't. The real differentiator may have been in Apple's ability to negotiate with music publishers while recording industry cabals were making life miserable for almost everyone else pursuing the digital distribution model. But even that was just a piece of the overall success.

When the IBM PC (5150) was released, it also wasn't anything really new or inventive. In fact, in many ways it was a step backwards, while hobbyist PCs were moving forward into multi-user, multitasking operating systems, GUIs and other more user friendly interfaces. However, the IBM name, the open nature (inadvertently, perhaps) of the platform and the positioning as a 'business PC' helped to create a cultural revolution.

With that in mind, it's fairly easy to agree that innovation is something very different from invention. Invention is conceiving of something new. It's about ideas. Innovation is the delivery of those ideas in a way that "sticks". Innovation is about execution.

The Apple Lisa was the first commercial PC to use a mouse and graphical user interface. It was a very inventive and innovative* platform (*exhibiting characteristics of, or the potential for, Innovation), but failed to become an actual innovation itself. To use a marketing term, it failed to "stick". Whether it failed as a consequence of bad timing, pricing or other forces isn't really relevant. It was an obvious 'game changer' that didn't attain its full potential. The Lisa went the way of the Xerox Alto and CDC Plato V that spawned it. The Lisa may have laid the foundation for the Macintosh and even Microsoft Windows. But, it facilitated innovation rather than qualifying as one. It was innovative, but not an innovation.

So if we accept that innovation is about successful execution, what are the criteria for success? Is it about profitability? Is it about competitive advantage? Using either criteria, things like Linux, the Internet, Social networking and Web based computing aren't innovations. While companies would quickly go bankrupt if they funded innovation with no regard for the business impact, there does need to be a clear understanding that an innovation can often disrupt a revenue stream or provide no immediate competitive advantage, but can lead to much higher returns in the long run.

Print media companies are finding their traditional business models gutted by the Internet, but those that embraced new online models are finding reduced costs, improved access to customers and new ways to earn money in the new economy. Successful companies embraced ideas that were clearly going to have a short term negative impact, but presented infinitely more opportunities. This clearly qualifies as innovation.

So, innovation isn't invention. It is about successful execution. But success isn't necessarily measured in dollars. That leaves us with the stickiness of the idea. How widely is an idea accepted and adopted? Does it change behaviors? That ability to refine, polish and sell an idea is really where we start to see some common threads between recognized innovations. In the case of Linux and the Internet, no one person or group was responsible. Instead, the idea was inherently attractive enough that hundreds and then thousands and now millions refined the idea as a group. The iPod became an innovation primarily through the design and marketing of Apple, but the iTunes store was polished and refined by the scores of labels, artists and application developers that have been contributing to it for almost a decade. Without that synergy, neither iTunes nor the iPod might have been successful.

The summary, so far:

1. Innovation is not synonymous with profitable, though innovation does provide opportunities for profit or competitive advantage if you know how to exploit them.


2. An Idea has to be implemented successfully to become an innovation.


3. Innovation is not always about invention. It can be about repackaging, recombining or simply re-presenting ideas at the right time, in the right way or to the right audience.


4. Innovation is reliant on the audience to accept an idea and adopt it. Without adoption, there is no innovation.


5. Innovation relies on the goodwill and enthusiasm of idea generators and adopters. No amount of force or coercion will turn an idea or product into an innovation.


6. An Idea can be attractive enough that it becomes an innovation without a direct sponsor or innovation team behind it.

So what does this mean for Innovation teams?

1. Our sponsors need to understand that they may be funding initiatives for the long term and at the expense of the short term. This is a difficult concept for many organizations to accept. An analogy would be surgery; we sometimes have to deliberately accept some short term damage, pain and weakness for our long term health and welfare.


2. Collecting ideas, filing patents and coming up with new designs is a good thing, but it's not a true innovation until you can get traction and actually implement the ideas. Innovation teams need to spend a lot of time laying ground work that might not seem to be innovative and may never directly contribute to a specific innovation. But building credibility, establishing relationships and providing incremental value are essential to eventually get to the innovation itself.


3. An idea doesn't need to be new in order to be Innovative. It could be a dusty old idea that can be polished and put to good use now that the timing is right. There may be a lot of value in revisiting ideas that failed or were shelved in the past. "We've tried that a hundred times before" should be a sign of an idea with merit. We need to make sure that our audience understands that innovative behavior isn't just coming up with new ideas. It's often about recognizing opportunities for existing ideas or simply being open to change.


4. Innovation teams don't make innovations. The audience does. It's important that an innovation team engages their audience and encourages them to adopt an idea. Innovation teams should be marketers, facilitators, mentors and close working partners with all of the stakeholders. We often focus strictly on the people doing the work or paying the bills rather than the people that we will ask to adopt our idea. Never forget that we put on the show for the audience and not for the players.


5. Innovation teams need to be careful not to alienate the sources of innovation by taking all of the cool or fun work for themselves. Teams need to be careful to freely give credit to their sources and avoid grandstanding for themselves. It's a difficult balance when innovation teams find themselves fighting with their own audience for funding. But finding that balance of recognition and ownership is an important element to a successful program.


6. If an idea can be properly communicated to the right audience, it can develop a life of its own and become an innovation.

While this isn't the end of the discussion, it does capture a lot of my personal views on innovation. If nothing else, it can help to reopen the dialog in your organization and may even lead to an innovation of your own views and processes.


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John P. Benfield is an Innovation Advocate for a global Financial Services organization. John has over 25 years of experience fighting the "Commodization of IT" and continually strives to bring IT back to the table as a true business partner and enabler of Innovation, Growth and Transformation. On twitter, John is @jpbenfield

Innovating Through Downturns

While most individuals and organizations natural reaction to an economic downturn is fear and retrenchment, they also present a time of great opportunity.

Where would Microsoft be if they hadn't continued investing through the downturn of the early 90's?

• Microsoft may never have finished the hugely successful Windows 95.

Where would Apple be if they hadn't continued investing through the technology crash of 2001-2003?

• Apple may never have fully realized the promise of the iPod and subsequent iPhone.

When a recession arrives, great opportunity presents itself:

• The unemployment rate increases (more available workers)


• Interest rates drop (lower cost of capital)


• People become fearful of losing their jobs making it easier to recruit from companies reducing or eliminating their innovation investments (increased labor mobility)


• People are more open to moving if a spouse's job is eliminated or at risk (increased labor mobility)


• When a recession arrives, it is easier to acquire tax breaks or other incentives for expansion, new sites, etc. (lower investment costs)

So, if companies have positive cash flows or significant amounts of cash on their balance sheet, or promising ideas to invest in, then there is no better time to invest. Companies with the courage and financial capability to invest in innovation through a downturn, absolutely should.

In addition to all of the other benefits, there is no better opportunity to achieve competitive separation through continued investment in innovation.

It does, however, take a strong CEO and steady board to have the courage and conviction to make such an investment. Innovation is not a perfect science and requires a tolerance for failure and a long-term commitment.

In today's short-term Wall Street quarterly profit-driven corporate reality, investors' short-term outlook may be the biggest impediment of all. But, smart organizations will find strategic solutions to overcome this impediment.

Organizations should take the following strategic actions to maintain or expand their innovation initiatives, despite the current global economic downturn:

1. Secure the leadership flexibility capable of continuing to invest in innovation despite financial pressures


2. Identify resources that you would like to have had access to during good times, that you might now have access to such as:


• Labor in scarce specialties


• Affordable capital


• Scarce real estate


3. Increase competitive monitoring to identify opportunities that may be created in areas where the competition reduces previous innovation investment


4. Increase customer research to identify opportunities to refine your ability to deliver products and services that deliver increased customer value, ideally at lower cost


5. Improve your innovation processes to improve your ability to innovate more quickly and effectively than your competition


6. Improve your organizational agility to increase its flexibility to adapt to changes in market conditions caused by the downturn and to shift resources efficiently and with increased speed

Organizations that take these necessary strategic actions, will come out the other side stronger than the competition, stronger than ever before, and create opportunities to preserve or attain market leadership.

Happy innovating!