Innovation is one of the key buzzwords that you just cannot miss wherever you go but I think it should not be only a buzzword. Innovation is one of the things that just need to be taken into account these days, especially in technology companies. The old saying running to stand still is more alive as ever before and doing innovation activities in a moderately structured way is a way to stay competitive. That’s why I decided to write what I think innovation and innovation management is.
I need to start with a definition. There are a number of definitions but I think that the most accurate is:
Innovation: something
1. Fresh (new, improved, cultivated, original)
2. That is implemented and
3. Creates value
Let’s first take a look at the first word “Fresh”. When talking about innovations first we need to define how much there is newness: is it new to us here at Efecte, new to our industry or new to the whole world.
Then the second part is all about execution. Are we looking into short-term projects or should we take a look on a portfolio of ideas beyond different planning horizons. These two first points are interconnected as when targeting innovations that are new to the whole world it might take quite a long time, except in some rare cases. I remember hearing that Amazon Kindle was a 7 year project where as it took only 6 months for the first iPod to hit the market.
The most important piece in the definition of innovation is that it needs to create value. Ideas are free, there’s no value in them. The value get’s inserted into the mix when you do something to the idea.
There are a multitude of different models trying to frame innovations and innovation management. Just this week in Front-end Innovation conference I came across to a model that is probably the best I have ever seen, the Innovation pyramid by Engage // Innovate AS.
In their model Engage // Innovate split the innovation into nine levels:
1. Design and Marketing: design and marketing mix,
2. Products: probably the most common area of innovation, the new products and product features, examples are endless,
3. Services: services related to products, completely new services, new ways to create value,
4. Markets, customers and channels: innovation on which markets, customers to target and how to reach them
5. Technology: starting point of many product innovation
6. Processes: how a company is run and organized
7. Management: thinking how to maximize the effect of the leaders
8. Business model: totally new ways to create value, Rovio Angry Birds amusement parks as one example
9. Industry: redesign the whole field of competition or maybe create an industry that does not exist
The complexity of innovations increase when coming down the list but also the potential gains are also growing. The most interesting innovations happen when working across several layers of the innovation pyramid.
In any case when looking for new innovations and areas for innovations one should really understand and study the area. Combining insights from different sources creates interesting things and mashing up those creates new ways of working, new products and even businesses. One crucial area here is the user, customer and business model understanding. It should be though noted that just gathering information is not enough but one should really observe what are the needs and especially latent, hidden needs of the users. That is the way to positively surprise users.
We here at Efecte are working on small innovations daily like the reporting things Henri wrote about earlier. Let’s see if we can cook some bigger surprises later on, stay tuned.
Bigger organizations can afford running dedicated innovation organizations and innovation management systems with cultivated innovation platforms, managers, and trainings. I don’t believe in that formalized innovation management systems as I think it is everyone’s task in small companies to contribute. We need to have a way to capture and combine the ideas and put them into production. As Peter Drucker put it: “Culture eats strategy for breakfast” meaning that a strategy to really be successfully executed it needs appropriate culture to support.
Harold Jarche wrote in his blog “Maybe we need to look at productivity differently. Instead of asking, what have you done for the company this week, we should be asking what ideas have you had and what have you done to test them out?”
I would like to add here that ideas don’t have any value it is implementation that counts!
Tags:
innovation
innovation management