I love the sound of the word Innovation. It gets associated with companies like Apple and represents a paramount achievement of businesses today. You can find it in advertising and job titles. But what does it really mean?
Innovation is the combination of multiple inventions or technologies into a unique new product that is successfully introduced to the marketplace.
By that definition, innovations are rare. However today we talk about innovation more as its tied to creativity and business acumen. By thinking outside the box, coming up with fresh ideas or lowering costs by improving processes, we have innovated. And its here that we loose the meaning behind innovation and it becomes just a buzz word, more common in marketing materials than everyday language. However its something we are culturally motivated to pursue. Innovation has perceived economic value.
Take as an example Roermond Papier, a paper mill in Roermond, The Netherlands. The company lowered their cost of materials by purchasing phosphate from a local baby-food company that generated it as a waste byproduct. Instead of buying phosphate on the market, they now have an agreement to purchase the waste phosphate from the baby-food plant at a lower price than they would have paid on the open market, and the baby-food company no longer has to pay to dispose of it. Roermond Papier would likely assert that this business decision, no doubt a good idea for both Roermond and the baby food company, is innovative. But it doesnt get at the heart of innovation, that core idea that innovators bring the world new and amazingly magical products.[1]
When innovation isnt associated with unique new products, unparalleled in the market, it can manifest itself in a more dreary fashion as leveraging patent portfolios in new ways or encouraging fresh ideas from your team about how to improve your products and processes. Why does that qualify as innovation? Because companies have stopped dedicating resources to leveraging their intellectual property and the creative ideas and obvious process improvements proposed by their employees.[2] In the fight to win business, cost cutting and a drive for affordability, companies have downsized and focused on getting the job done right, and on time over delivering creative new solutions.
If your job is to design and build a part, or the interfaces between parts, your job is not to reimagine those things but to get them on paper and built quickly and efficiently. Thats not to say you dont solve problems along the way and think about how youre solving the problem, but generally once the solution has been proposed, your job is to build the solution.
Take the example of a contractor, a company whose sole job is to do what the customer asks. These companies struggle to innovate because its not part of what makes the business a success. In general, contractors employ a lot of bright people who can build the amazing thing the client wants, but they started with a solution proposed by the client. For example, Id like a 10 pool in my backyard in this kind of shape and with an attached jacuzzi. Or please build us a satellite with these capabilities and sensors.
The end product will be unique but it doesnt represent an innovation. Now if an engineer was to say, you know what our customer could really use would be this new thing that we can make if we take one of these, attach it to that and then connect five of those, that would be innovative. Innovation requires thinking like MacGyver. You see what tools are around you, and you take those things and create the tool you need to solve that problem. You create something that didnt exist before.
Innovation is not the Swiss Army knife with 50 different functions. Its knowing that you have 50 different tools and you combine them in a way that a user will look at what youve made and intuitively understand and marvel at its unique, powerful simplicity. In the business world, fiber optic networks connecting cities, countries and individual homes is an example of an innovation that makes good business sense. Scientists and engineers long understood the properties of fiber optics and lasers. Combining the two technologies to transmit data at the speed of light straight to a box in your house fundamentally changed the way those homes consumed data. You could now consume data faster, orders of magnitude faster, than ever before. This in turn enabled high definition video streaming (Netflix), seamless networked gaming, and killed the CD, thumb drive and every other portable digital media technology. Thats not to mention how high speed networking has revolutionized the financial industry (high speed trading) or the way we store and share data (Dropbox).
Innovation isnt just creating a cool new thing, its getting people to buy that cool new thing. This distinction is important because it shows that the new thing youve imagined and now built is something people want. The US Patent Office is overflowing with ideas, concepts and designs for unique inventions. However only a small percentage of those inventions become innovative new products in the marketplace. Innovations change the world.
That said, innovation as we talk about it today should not be discouraged because, as an idea, it represents so much more than revolutionary new products. Innovation represents fresh thinking, creativity and collaborative problem solving. It is embodied in the sharing of ideas and renaissance of imaginative thinking, tinkering and exploration in everyday life and throughout business cultures. So with that in mind, why not go innovate today? Take a walk, get some fresh air and think about your work. How could you improve how you do your work every day or the product youre responsible for. And take a leap, what is your business going to look like in five years or even two? Figure it out and sell it to your management and you will be an innovator. Whatever you do, think different.
Notes
- Schuetze, Christopher F. The Circular Economy of Recycled Paper. New York Times 18 November 2014
- Companies like Toyota have implemented processes within their organization such that feedback from first-line employees gets acted on which directly correlates to improved manufacturing. See The Toyota Way and the Toyota Production System