Three Innovation Truisms

By June 6, 2016 blog, Innovation No Comments

“When was the last time you, as a customer, called the support line for a product you own to complain about its lack of innovation? Or sent a meal back to the kitchen at a restaurant because it wasn’t innovative enough?”1)https://hbr.org/2008/07/why-innovation-is-overrated
– Scott Berkun

Fact: After the discipline of “thought leadership”, “Innovation” is the source of more cliches, buzzwords and jargon than any other field (OK, I made this up, but there is probably some truth to it).

Innovation is a word that has been bantered about by corporate executives for decades and much like a surrealist painting, it is a word left up to the user to define. “Innovation”, as a term represents a multidimensional concept whose very definition represents the keystone challenge in developing any sort of “innovation” process.

While much has been written on the topic of innovation, there seems to be a lack of agreement as to what the exact definition of innovation is.  We’ve cut through the hype, sorted the data and cut out the buzz words in order to come up with 3 truisms that can shape your thoughts as you consider “what comes next”  for your company.

business-561387_500Truism #1: Innovation represents your future top line revenue. 2)Discovering top-line growth through innovation; http://www.cio.com/article/3038876/leadership-management/discovering-top-line-growth-through-innovation.html

This definition gives you the goal of coming up with a profitable idea. Almost every product you use in your everyday life started out as a simple idea, the car, the cellphone, the toaster etc. Another reason needed to make the the concept more defined is to make it more relevant to the objective of business – profit generation. If you disagree with this definition, remember that consumers don’t buy “innovation”, they buy the benefits and solutions that your products provide.

Truism #2: Everyone has an innovation problem

America is in a constant innovation crisis

Lack of innovation is often blamed on investors’ focus on short term profits and stock market returns. The reason for the neglect of innovation is due to a relentless focus on maximizing shareholder value as reflected in the stock price. And despite ongoing denunciations of this objective by the CEO, boards endorse it and CEOs are compensated for pursuing it. Investors base their decisions on it and analysts unthinkingly endorse it. As a result, innovation suffers.3)http://www.forbes.com/sites/stevedenning/2015/02/27/is-there-an-innovation-crisis-at-us-firms

Americans aren’t the only ones concerned about their lack of innovation.

Despite its reputation as a primary innovator, Japan’s startup scene has yet to make an impact abroad. “This is because this sector is the most under-supported in Japan,” says Terrie Lloyd, an Australian entrepreneur and commentator based in Tokyo. As the global digital economy grows, this puts Japan, a former worldwide electronics leader, at a disadvantage. America and South Korea continue to come up with the technology and smartphone services that consumers want. Japan’s large, unwieldy corporations like Sony cannot match the quicker foreign competition and fall behind.4)http://www.bbc.com/future/story/20130820-plugging-japans-start-up-gap

Recently, Europe has also fallen behind. Larry Moffett, the founder of the European Young Innovators Forum, has said that Europe’s poor performance in the global innovation index was a crisis for the whole region; “Sadly, year after year, Europe does not score well in that comparison. In 2011, Commissioner Quinn called it an innovation emergency and we are still in that emergency today”5)http://www.irishexaminer.com/business/europe-lags-behind-japan-us-in-midst-of-innovation-crisis-234804.html

Truism #3: Successful innovation takes a long time and is always obvious in hindsight.

The Wright brothers’ craft took its first flight in 1903 and only a handful of newspapers reported. It took five years for the press, and the rest of the world, to pay mind to what the Wrights’ invention was. Not until the second World War did the significance of the airplane become appreciated.6)http://www.fool.com/investing/general/2015/06/26/why-it-feels-like-were-falling-behind.aspx

So, in summary, what can we be sure of when it comes to innovation?

There is an economic framework that governs businesses, certain rules by which we must all abide:

– The primary directive of a corporation is to create value, measured in dollars.
– Investors require returns on investments.
– It is impossible to accurately project the outcome of innovation and often, the solution is only obvious in retrospect.

The question is, how does a company spark the development of its future revenue, despite the constant focus on short term profitability?

References   [ + ]

1. https://hbr.org/2008/07/why-innovation-is-overrated
2. Discovering top-line growth through innovation; http://www.cio.com/article/3038876/leadership-management/discovering-top-line-growth-through-innovation.html
3. http://www.forbes.com/sites/stevedenning/2015/02/27/is-there-an-innovation-crisis-at-us-firms
4. http://www.bbc.com/future/story/20130820-plugging-japans-start-up-gap
5. http://www.irishexaminer.com/business/europe-lags-behind-japan-us-in-midst-of-innovation-crisis-234804.html
6. http://www.fool.com/investing/general/2015/06/26/why-it-feels-like-were-falling-behind.aspx