Bet that got your attention………
Successful Innovation is almost always the end result of many experiments, resources expended that deliver no result, lots of huffing, puffing, moments of excitement, and from time to time great let-downs.
Just like sex.
And just like getting pregnant uses millions of sperm, with only one getting the prize, so does innovation require the expenditure of lots of resources to just get one “home”, and that one makes all the rest seem irrelevant.
Contrary to much common usage, these two concepts are not synonyms, they are very different.
Creativity is the process of dreaming up something new, while Innovation is the process of making use of the new stuff.
How often has Van Gogh, or Beethoven been accused of being innovative? Just sometimes, when the discussion is about the way an artist wields his palette knife, or the structure of a symphony. Usually they are described as creative, because what they created opened a door that had not been opened before, made connections in a new way.
Make no mistake, creative and innovative need each other, one does the art, the other brings in the benefit. Van Gogh after all died mad and broke, must have been creative without innovative, but his brother recognised the value of his work, and made a buck. He was innovative.
Most artists create something for the intrinsic value, it sounds great, looks good, or feels right, whilst the innovator finds a role for the art to add some monetary or exchange value.
To be creative, you need, according to John Cleese who knows a bit about this stuff, Space, Time, Time, Confidence, and Humour. Yes, I know “Time” got two mentions, to understand why, you will have to listen to Cleese’s presentation, which should not be a problem, in fact to my mind, should be compulsory.
Fast Company’s 50 most innovative companies of 2012, a pretty impressive list, but most are tech companies in one way or another, which I guess reflects the domain of Fast Company magazine.
However, I think the omission by implication of a broarder definition of “Innovation” does a disservice by making light of business model or process innovation, both of which add enormous value. Google may have started as a disruptive technology, but the reality is that it succeeded because it was a disruptive business model, as was Facebook, Alfred Sloans divisionalisation of GM in the 30’s to customer based categories, after Ford totally disrupted the horse and buggy industry, the list can go on.
Then there is this WSJ article that addresses the “what is innovation” question, and presents a view hard to argue with, but is still a narrow view.
We can present stories about disruptions that changed existing industries, or about the many ways in which the network effect, and collaboration that creates the environment for innovation, and all would by themselves be right, but wide of a basic grasp of the nature of innovation.
My view is that innovation is a process that adds value where none existed before, anything that adds real, new value to a market or opens a new market, can carry the tag “innovation”.
On a flight from a regional town last week, the attendant went through the nonsense of the “safety speech”. Instructions on how to do up the seat belt as if nobody knows is pretty dumb, but of total irrelevance is the instructions on how to use the life-jacket. I remain unconvinced that a little whistle and light will do much good if the engine stops at 20,000 feet, and the only water within 100km is in farmer Browns property dam. What about a parachute?
However, it is all taken so seriously, passenger jokes are not appreciated at all. Surely an example of a mould that needs busting.
Another mould more likely to be busted by the avalanche of mobile and electronic payments innovation is the banks credit card and cheque business model.
I have observed the missed opportunity by banks before, and the pace of change is accelerating rapidly picking up as Apple, Google, Paypal, and a host of startups like “Levelup” “Square” see the opportunity in disruption, and are chasing hard, often using technology that evolved in an ecosystem with nothing to do with banking.
These changes pose a huge problem for banks, one that their legacy structures and business models are apparently having big problems addressing. The role and performance of banks around the world over the last decade, and in the current European mess has removed any residual loyalty consumers may have had, and opened them up to non bank competition that will change the nature of banking in the coming decade. Opportunities abound to bust the current mould.
This new avenue to live broadcast, as distinct from posting a video on Youtube, seems to me to be a game-changer.
Social media lives by interaction, engagement, that is what gives it its power, and to be able to go live to an audience, even if it is just your own family at first, offers the opportunity for the networking capacity of social media to accelerate at a logarithmic rate.
For a while I have wondered at the task facing Google competing against Facebook, which has an established base now of a billion, they have built formidable barriers to exit and entry, but “on air” could just change the equation.
The momentum seemed to be moving slowly towards Google, but this innovation will give it a great big shove, particularly in the light of the facebook IPO, with the shares currently being traded at 10% less than the issue price, and 25% below the peaks reached on the big day. There appears to be a healthy dose of cynicism that has suddenly emerged as a result of the obscene amount of wealth facebook insiders have skimmed, whilst the gullible have done their dough, and this cynicism can only assist Google+ build some much needed competitive momentum.
Another paradox surfaced by the emerging business networked models is that of ownership of IP.
In the old days, just a few years ago, ownership of IP was top of mind in many if not most development situations, but then along came digital collaboration.
Linux is now the dominant operating system installed on large servers, a loose collaboration of nerds has significantly outperformed Microsoft, one of the smartest companies of all time, with access to the most and best resources, and a dominant starting position. How can this be?
Nobody owns the Linux IP, it is a common license,
Toyota for years has encouraged, perhaps demanded, innovation from its tier 1 suppliers, often using non quantified descriptions of outcome as a substitute for detailed specifications, and Boeing, in the design and construction of the 787, set out to “co-innovate” with its suppliers, as they recognised the development task was simply too complicated to do alone. Despite huge problems, the exercise has yielded technology advances that Boeing believes will give them a big advantage for many years.
The key in building a network business model is the recognition that IP is no longer the end game, simply a means to an end. Businesses are now prepared to own some, share it, give it away, and have others generate it, just to ensure that the benefit from the knowledge flows through to the product.
I recently completed a business plan for a client which called for a high degree of collaboration with other complementary institutions, all of whom have at their core, a reverence for IP. In considering the drivers of success, and writing a plan to harness them, ownership of IP was always going to be a big stumbling block, it turned out to be a terminal one. However, the plan did get a few people thinking, so perhaps down the track a bit the benefits of a networked model may be seen to outweigh the C20 preoccupation with IP ownership, after all, it is how the IP is leveraged, not who owns it, that counts.