We all know the question, but who knows the answer? I got asked it again this week which is what made me try to capture this point. The most common response would seem to be ‘I will know it when I see it’, which suggests business success is based on ‘getting lucky’. As you might expect business schools don’t agree with this and as A G Lafley, author of several works on the topic comments: “Innovation is risky, but it’s not random. Innovators have a disciplined invention process”.
So if it is a disciplined process, what steps are parts of the process? Let’s start with the whole point of innovation with a commonly accepted definition: ‘By focussing on our chosen innovation type for this particular market category within this defined scope of time, we will so outperform our competitors that prospective customers and partners will cease to regard them as legitimate alternatives’. Notice the opening part refers to a chosen innovation type and that can broadly be defined around three possibilities:
- Changing the COST of production to such an extent that a clear and substantive advantage can be obtained and maintained. This is the traditional role for information technology, centralising and redefining processes in such a way that costs are reduced, efficiency improved and enterprise assets are better leveraged.
- Creating new VALUE through products and services that redefine markets and tap into whole new opportunities. Apple iPods displaced Sony Walkmans which in turn had displaced transistor radios as an example. For many companies this is the ideal but in reality it’s not that common.
- SERVICING existing customers and markets with such increased intimacy and understanding that competitors find themselves shut out of consideration. Amazon’s original entry into the book marketplace signalled a radical change in the definition of what a buyer expected from a seller in terms of availability, help to find and assess how good particular books are, etc.
Seen from this perspective it is clear that the ‘Value’ and ‘Servicing’ innovations are based on business technology, using technologies that can help a business to find new markets, or make more of existing markets. The breakthroughs that redefine a market are few and far between, but for most enterprises, if not eventually all, it is becoming clear that the stakes are continually being raised around how well they are servicing their customers and markets. This is reflected in the corresponding interest in enabling the front office with social CRM, decision support, intelligence and collaborative working for a flexible response to opportunities.
As Facebook grows 185% in a year and overtakes Google, just, as the number one place for ‘hits’, the trend towards not merely finding a product at an attractive price but checking to find if the product met expectations, or how good the quality of service from the supplier was, is clearly rising. This in turn means more business managers have to focus on innovating their capabilities with technology to compete in servicing. So perhaps the cry ‘we need innovation’ need not be quite so vague, as at least the target for why and where can be clarified.
So now you know a little more about what innovation can be used to address, the question shifts towards how to refine the conceptual choice into a tangible choice and that’s where various so called ‘innovation frameworks’ come into play. Capgemini has its own in TechnoVision, but all have to address the same challenge; ‘I don’t know enough about this topic to produce a clear requirement definition’. Capgemini TechnoVision does this by systematically examining a series of technology clusters to see exactly what they can deliver in terms of capabilities that will enable a desired business change as an example.
So next time you hear the statement ‘we need innovation’, its time to answer back with some real help to make innovation happen!