Innovation isn’t invention; it’s often a necessary, welcome change in the way we do things
The strategy must balance the chaos of innovation with the stability of conformity. This is the most efficient, cost-effective path to successfully launch an innovative product.
BY WILLIAM SEIDEL
Innovation breaks rules, changes established norms and calls for new thinking—creating chaos in the process. It is progress by disruption and essential to business growth but dismissed by many.
An innovation can demolish established systems. Digital, downloadable music revolutionized the music industry. It changed the products, manufacturing and even music distribution. It made tapes, CDs and record stores obsolete. Apple captured a commanding position in the music industry with the iPod, iTunes and iPhone.
Social media and mobile communication transformed the way people interact, communicate and form relationships. We are just beginning to recognize the changes from artificial intelligence.
What innovation is, isn’t
Many may believe innovation is a fancy word for invention.
Innovation does not mean invention. Innovation is a change in the way we do the things we do and has social impact.
According to management consultant, educator and author Peter Drucker, innovation is a change in lifestyle. It is an effect in economy and society that causes a change in the behavior of individuals.
The word innovation has connotations of advanced thinking. It has become a buzzword for being on the edge of progress.
Unfortunately, many companies use the word to convey monumental change when it is just a small improvement. Launching a new product or opening a gift store in town may be enterprising, but it is not innovative.
Many companies claim they want innovative products but turn them down. Why? Because they are not interested in products; they are interested in profits.
New products are unproven, the risks and costs high and consumer acceptance unknown. Instead, most companies improve existing brands and tap existing customers.
Conforming to established manufacturing, marketing and distribution systems means faster to market and lower cost. For this reason, nine of 10 corporate product introductions are line extensions.
With a known brand, risks are low with minimum development and customers are willing to try an improvement to a brand they know.
A new product or even a revolutionary product is not necessarily an innovation. An improved drill with speed control can make better holes faster but does not change the way people use a drill.
A battery-powered drill changes the way we power and use the drill. They both drill holes, but battery-powered drills changed the cost of drills and the user’s behavior.
Entrepreneurs are the innovators
Innovation is not necessarily a success. Wikipedia was disruptive and threw chaos on the encyclopedia business, making it all but obsolete. It wiped out a billion-dollar industry and thousands of jobs, and now depends on donations.
Entrepreneurs are usually the innovators. If they brought change to the customer, they are the innovators.
Ralph Baer is the inventor of the video game. But Nolan Bushnell is the innovator because he founded Atari and commercialized the video game, creating an economic and behavioral change.
Richard and Maurice McDonald created the Speedee Service System for reproducing the same hamburger every time. In 1954, Ray Kroc became the franchising agent and the entrepreneur who was the innovator. Kroc disrupted the restaurant industry by innovating the fast-food concept and changing what and where we eat.
Entrepreneurs consider risk a cost of innovation. Bankers, accountants, attorneys and often CEOs are generally risk adverse.
Marketing an innovation is a herculean task. Expensive education and marketing are needed because no one knows what it is, what to do with it, or why they need it. This makes it nearly impossible to value,
and hard to fund.
Innovation needs new strategies to compete with bigger budgets, better protections and established distribution. Most companies avoid the high cost in favor of evolutionary products.
Conquering fear of change
Resistance to change is a deterrent to innovation. When change occurs, some hide, some react out of fear, and some learn to live with it.
British politician Tony Benn said of progress, “It’s the same each time. … First, they ignore you, then they say you’re mad, then dangerous, then there’s a pause, and then you can’t find anyone who disagrees with you.”
Resistance to change is perfectly normal. However, innovation often requires learning a new process and readjustments.
Consumers prefer no change or an easy-to-understand improvement. Any change has the potential to disrupt psychological equilibrium and increase resistance. When the resistance is too
High, the innovation fails.
Chester Carlson, the inventor of xerography, tried for nine years to raise money from RCA, Remington Rand, General Electric, Kodak, IBM and others. They all turned him down, asking: Why would anyone need a copy machine when we have carbon paper?
Horace Rackham, president of Michigan Savings Bank, recommended that Henry Ford’s lawyer not invest in the Ford Motor Co.: “The horse is here to stay, but the automobile is only a novelty—a fad.”
Many people cannot imagine what does not exist. They don’t have the vision to see what is not, or to imagine what could be. So, they deny it and trust what they know.
Resource constraints limit time, money, people, equipment and materials, and affect success. Startups and smaller businesses struggle to adequately manage their resources.
Managing innovation is challenging because there are many unknowns and surprises in the process. It requires careful planning, adapting to changing conditions and being prepared to learn from failure. And time is working against you to quickly generate revenue.
Build the windmills!
Innovation challenges the status quo, introduces chaos and forces adaptation. Conformity provides established systems, manages costs and ensures stability for sustained growth.
The strategy must balance the chaos of innovation with the stability of conformity. This is the most efficient, cost-effective path to successfully launch an innovative product. And the right strategy makes
it a smooth transition.
Resistance to change remains the biggest obstacle to innovation. A Chinese proverb has a great philosophy:
“When the winds of change blow, some people build walls and others build windmills.”