Innovation Is Not An Option

Bauhaus art school building in Dessau, Germany. The Bauhaus principles of simplicity, functionality, and innovation underpin the minimalist design behind the iconic Apple aesthetic.

Executive summary

The modern economy is replete with stories of organizations that vanished (Kodak), others that survived (Fujifilm), and others that thrived (Apple). When you read the full adventures, you find that the main character was innovations ―plural because there is not just one but different kinds of innovations. In this article, I describe the six types of innovation that I have encountered through my experience beyond the common incremental innovation vs disruptive innovation dichotomy.

Why innovation is not an option?

Before answering this question, let me define what innovation means. Stated simply, it is any product, process, or service by which an individual or an organization solves a problem no one solved before (disruptive innovation) or finds a better, cheaper, or quicker solution to a known problem (incremental innovation).

There is not one but multiple innovations

Innovation is often classified in incremental versus disruptive innovation but we learn more if we classify it along six different categories:

  • Bottom-up innovation
  • R&D innovation
  • Creative-destructive innovation
  • Fortuitous innovation
  • Copycat innovation
  • Second, the project-structuring stage in which the project lead and project team conduct a more detailed assessment of the current situation and develop a strategy to move forward.
  • Third, the solution-implementation stage in which the project lead and team use one or a combination of multiple technical, organizational, and management methods and tools to solve the problem at hand.
  • Fourth, the change-selling stage in which the project lead and team promote the project, explain its benefits, and train the users to get endorsement and support.
  • They do not jump in any new disruptive innovation because an existing business has to take into account the legacy and can therefore only embark on incremental innovations. This explains why brick-and-mortar businesses lagged behind digital native counterparts in e-commerce.
  • Incumbents may seem uncomfortable with disruptive innovation because of the high costs, risks, and volatility to (re-)enter the market now that it has shifted and the newcomers have become the leaders. Digital advertising is a typical example where almost all the small agencies had only three choices: grow through merger and acquisition, change the business model to become a partner to Google and Facebook, or vanish.

Ingredients for innovation to succeed

In a connected world, innovation is global. Innovation is a competitive market on its own. To succeed, it needs a fruitful environment and additional talent that help it develop locally, then expand globally. Below, I focus on the most important ones I encountered in my research, consulting, and implementation work (5):

  • A large and unified market: There is also the reality of geography, size, and governance. Creative-destructive and fortuitous disruptive innovations tend to favor large unified markets with minimal regulations for business to develop quickly. The USA and China are each a unified and gigantic market. Comparatively, Europe is a large but fragmented market.
  • Business-friendly regulation and taxation systems: Last but not least, the regulation and taxation systems play a very important role in high-risk innovations. Creative-destructive and fortuitous innovations easily take birth in countries with low taxes and low regulations. This explains the drain in Europe of some of the best-in-class entrepreneurs and high-potential start-ups toward the USA.
  • Marketing from the first days: It is not because the CEO has decided to launch a digital transformation that all the employees are happy with it. It is not because you love your blog that everyone in your organization will take a look at it. It is not because your breakthrough innovation has outstanding features that the world will adopt it. Like any product or service, a new innovation faces competition from other new and existing innovations. The individual or organization at the origin of the innovation has to market it outside the early adopters.

Takeaway

Footnotes

(1) For more details on the four stages of top-down innovations, see my article “Managing A Complex Project, More An Art than A Science” available on Medium.

Disclaimer

Although based on research, consulting, and implementation work, the views, thoughts, and opinions expressed in this article belong solely to the author, and not to the author’s current or previous clients or employers. The article was not reviewed nor endorsed by the individuals and companies mentioned. The Photo is signed Spyrosdrakopoulos on the Wikimedia Commons site.

Data Strategy Consultancy

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