There are plenty of inventions, but substantially fewer true innovations. It’s common for people to confuse the two. But innovation is defined by your clients through their eager and widespread adoption of your idea/product/service; invention is defined by the creator mainly as an internally driven endeavor. The key thing to remember is that innovation is not really about novelty, but more about value creation.
Gijs van Wulfen, a European author and innovation thought leader, and Wall Street Journal Financial Editor Dennis Berman both admonish CEOs and the business community for overusing and misusing "innovation,” and scold business leaders for fooling themselves into believing they are actually agents of change.
Berman started a wave of comments and articles a few years ago in story called “Is A Peanut-Butter Pop-Tart An Innovation?” in which he called to task Kellogg CEO John Bryant for calling his cereal company's new food product an innovation. Berman goes on to chronicle a host of other similar claims from other top firms—including Red Robin Gourmet Burgers and Brews executives, who in a November 20, 2013, presentation mentioned the words "innovate" or "innovation" 21 times to describe their food offerings, and Hewlett-Packard executives on an October 9 conference call who used the word 70 times. Capital IQ reported that 197 companies in the S&P 500 mentioned “innovation” in their 2013 third-quarter conference calls, up from 99 back in 2007. Berman further reports on a Boston Consulting Group study that asked 1,500 executives to rank their company innovation from 1 to 10; more than two-thirds rated themselves a 7 or higher.
Consider this a cautionary warning on using this word lightly!
Van Wulfen added to the discussion on his LinkedIn posting, “The Word ‘Innovation’ is Misused,” arguing that we must address this usage by revisiting the definition. He offers the following:
“An innovation is something original, new and important—in whatever field—that breaks in to (or obtains a foothold in) a market or society.”
The key question he poses here is "original, new and important"—according to whom?
Van Wulfen draws the analogy that it is natural for an inventor to look at his creation as a proud father. Subjectively, investors’ creations are "original, new and important" for them and their firms. But there's a major difference between breakthrough innovation that drives competitive differentiation and a product/service extension or upgrade that merely keeps you in the game. The difference is in the mind of the consumers, who determine how relevant and valuable the new products or services are for them.
That is why the surest way to reduce the risk of innovating and making sure you are on a successful track is to develop a deep feel and understanding for your target customers. Customer empathy is much, much deeper than just customer focus. This realization has driven many innovation efforts to explore and incorporate techniques from the design world. Rolled up under the banner of "design thinking," it represents a human-centered problem-solving approach, a series of steps and ethnographic techniques that are designed to uncover deep insights into what customers really need, especially their unarticulated needs. Design thinking goes beyond data and surveys and focus groups to mine emotions, expectations and unvoiced needs.
There are a number of articles in our Innovation Library and a few videos in our Innovation Gallery on design thinking for you to further explore this topic. We will focus on design thinking in later posts.