Updated: Aug 1, 2019
Innovation is a popular topic and according to my experience often controversially discussed in companies, in particular on the executive level. Maybe what everybody may agree with is to consider innovation as a diverse and important subject in today’s world in general.
Joe Tidd and John Bessant (2009) describe „innovation as the core renewal process within an organization, refreshing what it offers the world and how it creates and delivers that offering“ (p. 54). They showed that innovation activities in different sectors show similar patterns. Their view on innovation has an integral character which goes beyond the development of new products and services.
Mihaly Csikszentmihalyi (2009) described in his research about creativity the „field of experts“ as those who judges whether something is considered as innovative or not. In case of consumer products and services this function is fulfilled by consumers, and different groups of experts and influencers.
Let us have a look on three traditional industries many people in the role of a customer are familiar with:
Automotive industry: There has been a strong competition among traditional car manufacturers for many years. Manufacturers have become extremely efficient and introduced a large number of new product designs and functions to the market. But it is Tesla that currently drives a revolution with its electric cars through the industry.
Banking: Banks and financial services companies in general have created a variety of highly sophisticated financial products and services, for institutional clients in particular. They have invested strongly in information and communications technology. Of course, from an average consumer perspective you are well aware of cash points and online banking services. In recent years traditional banks have added analytical functions to their client portals and have introduced applications for payments on mobile devices, almost 20 years after PayPal came along.
Watch industry: The watch industry has already seen at least one major shift before, which resulted in a serious crisis for some parts of the business. Surprisingly major watch manufacturers did not react to the signals of the increasing success of smartphones and more or less connected devices in form of fitness trackers entering the wrists of consumers. A couple of years ago Samsung and Apple introduced their smartwatches what could be understood as the ultimate signal, that a market for smartwatches might exist. Both companies work with platform strategies covering multiple types of devices and offering an attractive ecosystem to their customers.
It is up to you and all potential customers to decide which of those products and services you consider as innovative. Based on my own experience as innovator, I am absolutely aware that complaining about missing innovation is much more easier than innovating successfully.
All three examples show, that significant innovations have been introduced by companies that were not part of the group of traditional players in the sector. These outsiders have initiated major innovation shifts in those industries and are now challenging and threatening traditional players.
These developments are happening decades after Clayton M. Christensen (2016) described the phenomena of the „innovator’s dilemma“ and coined the term „disruption“. Of course, today the term „disruption“ is used in a broader sense, for example when a startup enters an existing market with new approaches often in combination with digital tools and pushes traditional business models and their owners aside.
According to my experience many people working in large, traditional enterprises are still not aware of the giant threats their businesses are facing. It is paradoxical, that they use as consumers latest technology, in terms of mobile devices and social media services, but are not willing to think about, what the impact of these technologies to their business is. For example, Google and Facebook are critical elements in both B2C and B2B relationships. These companies have already gathered large amounts of data. It enables them to create business ideas based on data analytics for any type of business in any sector.
Obviously, many but not all innovative companies that are challenging the traditional businesses, are related to the Silicon Valley. Despite this region has been a hot spot for innovation over decades, many leaders in traditional companies seem to be still underestimating the innovation power of Silicon Valley’s well known giants and upcoming startups. This should be no surprise to those, who are fully aware that humans are a critical factor to innovation and specifically to the success of innovations. There are plenty of methods and tools available to support companies in the domain of innovation. They cover the full range from innovation strategy, innovation management to the development of new products and services. Of course it can be challenging to choose the right ones for an organisation. But before you start selecting, it could be worthwhile to think a couple of minutes about the following questions:
Do you encourage regularly other people to come up with new ideas?
Do you initiate regular discussions about ideas that might change your business significantly?
Are you currently running an innovation project that goes far beyond continuous improvement?
Are you supporting at least one other person in innovation projects or activities?
Do you give people a second chance when they tried hard but failed with their innovation project?
Maybe you would like to share these questions with people in your organisation. I would be glad to learn more about your opinion and your experiences on innovation.
Get in touch with me today to discuss your needs and desires and find out how I can help you and your organization to reach growth, profit and success through technology innovation. Schedule Your FREE Discovery Call Now:
Christensen, C. M. (2016). The innovator's dilemma : When new technologies cause great firms to fail (The management of innovation and change series). Boston Massachusetts: Harvard Business Review Press.
Csikszentmihalyi, M. (2009). Creativity: flow and the Psychology of Discovery and invention. [Apple iBook]. Retrieved from https://itunes.apple.com/us/book/creativity/id360608711?mt=11
Tidd, J., & Bessant, J. (2009). Managing innovation: Integrating technological, market and organizational change (4th ed.). Chichester: Wiley