WHAT IS INNOVATION REALLY?

The launch of a new book has had me reflecting on that most overused and misused word in the business lexicon – Innovation…

That book is Jeremy Gutsche of Trendhunter.com book: EXPLOITING CHAOS. Jeremy has kindly allowed me to link to a free download of pages and examples from the book.

It looks really exciting to me – I’ve always enjoyed the more visual business books such as Tom Peter’s The Pursuit of Wow or The Medium is the Message by Marshall Mcluhan and EXPLOITING CHAOS looks extremely enticing.

Some of Jeremy’s ideas and thoughts are powerful. He has created a good resource in this book of examples, ideas and provocative challenges that will help to inspire and stimulate thinking.

I’ve always thought that we should hold a high bar to what we regard in business as innovation. During my corporate career I seemed to be constantly working on the next “innovation” as were my colleagues. I think many businesses use the word to make people feel better about the work that they were doing! A new ad, a new twist on an existing product, a new concept in an existing category – most likely they aren’t going to be an innovation.

In my mind innovations need to meet at least the following criteria:

1. Its a truly new idea or the exploitation of an existing idea into a new context: like the invention of the lightbulb, or the creation of a domestic compact flourescent bulb; or the invention of the telephone or the cellular networks which enabled mobile phones;

2. It delivers something new against a new or existing need meaningfully and for the long term. I think an innovation should have context – it can’t be a good idea for the sake of a good idea.


The Honda hydrogen fuel cell car, for example, I think will be seen as truly innovative over time because it moves us on significantly into new long-lasting territory. Whereas the Toyota Prius won’t stand the test of time because whilst it was a step forward (and a good one), it didn’t fundamentally deliver against the need meaningfully and for the long term (although the harvesting of electrical energy from braking that Toyota developed is an innovation which I suspect will last).

3. It should significantly challenge the existing status quo. The introduction of an offsetting mortgage, much touted as a financial innovation, didn’t meet my bar – it was a good product and clever but not an innovation. Zopa, on the other hand, a marketplace for you and I to lend to each other safely is an innovation – it challenges the exisiting significantly and is truly novel.

The debate over innovation will go round and round. I just hope that more businesses can deliver value against our needs, whether they call it invention, innovation, or just plain old tweaking.

What do you think? As always please feel free to share, retweet, comment and get involved.

And congratulations to Jeremy on the publication of Exploiting Chaos.

Yours

Justin

justin@basini.com
http://www.basini.com/
justinbasini.blogspot.com

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RT @tomfarrand What will be the biggest trend in marketing in the next 3 years?

For those of you that follow me on twitter (@justinbasini or http://www.blogger.com/www.twitter.com/justinbasini) or follow Tom Farrand (@tomfarrand or http://www.blogger.com/www.twitter.com/tomfarrand) you may have noticed Tom’s question about the biggest trends in marketing in the next three years.

This made me reflect. I like the question because of its relatively short term nature which is especially pertinent given the macro economic environment we are in.

Dominic Grounsell (@domgrounsell or http://www.blogger.com/www.twitter.com/domgrounsell) suggested technology and thrift which I agree with. The transparency and access that the information age has given rise to will continue to change the rules of the game. The move from push to pull to interconnected collaboration will continue apace.

And thrift will be an ongoing zeitgeist.

What I believe is that we are at a turning point that will pivot around how long the recession lasts. If we see a relatively rapid recovery, say towards the first half of 2010, and unemployment peaks at around 3m then I think we may we’ll return to a modified version of the previous system but with less excess and more regulation.

If we go through a more prolonged recession, say until end 2010, with unemployment peaking at around 3.5m, then I could imagine more significant change with a rebalancing of the economy away from financial services and more social unrest. The leaders of businesses and our politicians will come under intense pressure to drive sustained change, raise taxes for the rich, submit to increasing regulation, all in the context of decreasing trust and perceived incompetence.

Now the most interesting scenario, with potentially massive positive benefits and undoubtedly devastating affects would be a really deep recession lasting into 2011 with unemployment peaking over 4m. I think this scenario has the potential to cause massive change in our system because of the social upheaval (at all levels) that this will cause and the increasing acute perception of the “haves” and “have nots” leaving us with a feeling that the economic system is fundamentally broken.

This will require new leadership to emerge. Potentially the US have found their change agent in President Obama. We need a new political force to arise that can drive change and restore hope. This will be a burning platform if over 10% of the working population are unemployed, house prices don’t recover, deflation starts and businesses find it hard to compete.

It will require businesses to change and adapt to increased levels of consumer activism’ increasing defaulting and money flow as the system deleverages and the continued rise of suspicion and the rising belief that making profit is bad or only feathers the nest of the “fat cats”.

Many of these changes, ironically, will be good in the long term especially if a new, more balanced approach emerges. However I’m definitely not rooting for a prolonged recession – the collateral damage on individuals and families is too great.

My prediction for what it is worth is that we will land somewhere between scenario 2 and 3 with recovery starting end 2010 and unemployment peaking at around 4m. What I do hope is that the seeds can be planted both in our leaders and in our economy that will grow into a more balanced, more holistic approach that puts well being at its heart rather than fear and greed.

As always feel free to comment.

Justin

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