Everything You Thought You Knew About Innovation Is Wrong


Innovation has become one of those business buzzwords of the last decade. Its presence in titles of business best sellers has been pervasive. And yet, there seems little continuity in terms of how innovation is defined or measured, and a lack of focus on how to be more disciplined in pursuing or implementing it. Often when people talk about innovative products, they are thinking in terms of uniqueness of the attributes of a product, such as its appearance, usability or utility. I would argue that what truly represents innovation is the unexpected value that is captured by the user of the innovation.The greatest source for inspiration when a company seeks to innovate is a clear understanding of what the unmet needs are of the customers they serve and the end users of the products or services they deliver. Truly innovative products come about when the needs that are met cannot be clearly articulated by the customer or end user, but rather are derived from an understanding of the intrinsic needs behind the stated desire. Small fortunes are spent each year in the Market Research industry by companies asking questions for which they already have the answers. Everybody knows that new medications should be easy to swallow, taken no more than once a day, be effective in every patient, and cost the patient nothing. The challenge for market researchers is to develop an approach that will uncover needs that the doctor can’t specifically articulate and will allow them to position their product in ways that address needs the doctor or patient may not even have been aware they had. Many of the most innovative products on the market today could not have been described by the end-user until the product was delivered. Nobody would have thought to say, “I need a piece of paper with just enough stickiness to stick to things but that can be removed without leaving a residue”. Yet Post-It notes were and are considered highly innovative. Similarly, nobody could have articulated that what they needed was to be given special privileges and benefits in direct proportion to the number of miles they flew on a particular airline. And yet, when American Airlines launched their AAdvantage program, it drove a huge increase in repeat business from business travelers that far exceeded any predictions.