Predicting Innovation

innovationSmallIsaac Asimov once said “The most exciting phrase to hear in science, the one that heralds new discoveries, is not Eureka! (I found it!) but rather, “hmm…. that’s funny….”. Based on a 30 year study across 300 product categories and 225 countries, the phrase might actually be “Hmmm…. that’s what I thought.”

A new whitepaper from Phillip Roos from GFK sums up 30 years of findings started by product guru Robert McMath. The paper deserves a deeper dive – (which will be coming in some form or another) but I’ll try to share the highlights with you at least:

The Chord of Familiarity – Great innovation builds on what comes before it. This lines up with something I have long believed – there is no such thing as revolutionary innovation, just a series of incremental evolutionary innovations that at some point reaches a tipping point and appears to be revolutionary. I’ve used the iPhone as an example before.

Great Innovation does not require people to make radical changes in beliefs or behavior – Again, with incremental innovation, the market must understand the innovation and relate it to something they’re used to. The iPhone made smartphones smarter, more fun and more useful. It didn’t require us to make a great leap of understanding (unlike Apple’s ill fated Newton, which was too far ahead of it’s time).

Consumer Needs evolve in predictable ways – Innovation tends to mirror a natural evolution in consumer needs.

Innovation “news” that addresses consumer needs gets adopted in predictable ways – Smaller players generally lead the way (as they naturally are more innovative), as competition picks up others build on the original innovation (witness what’s currently happening in mobile technology with Android, the Palm Pre and others) and then finally we reach the tipping point of mass adoption (we’re getting very close to this cusp with mobile technology).

Roos also shares some drivers of winning innovation:

Business Dynamics – Supporting innovation with strong business practices and process. A.G. Lafley built a culture of innovation at the core of P&G. 3M, Apple and Google are other corporate cultures that have injected systemically into their core.

Consumer Dynamics and Insights – It’s essential for innovative companies to consistently maintain the customer’s perspective and approach product development from this frame of reference. Again, Apple is brilliant at this, due in no small part to Steve Jobs amazing intuition about what Apple’s customers want. Intuit and P&G have robust customer insight programs that bring them to where the customer works and lives, outside of the market research lab.

Creativity and Design – Innovation specialists tend to be creative and design enthusiasts. They typically have a great ethnography process that keeps them squarely aligned with their customers and then excellent design teams that can translate this understanding into innovative products….

BUT

Roos says even if you do all these things well, it may still not be enough. Apple gets check points beside each of these prerequisites, but they still turn out clunkers. In the end, innovation in product design is a bit of a crap shoot and the trick is to stack the odds in your favor. Innovative technology, even if it’s superbly designed, is a failure if no one uses it. And it’s this last point that Roos says is critical. You have to understand the patterns of innovation adoption. You have to find the right place on Everett Roger’s Technology Diffusion curve. And it’s here where the same patterns have emerged with successful innovations over the past decades. Here are the steps Roos recommends:

To understand the patterns, you have to understand the drivers of the product category. Historically, why have customers come to this category. This will boil down to some primary human drivers: safety, convenience, gratification, productivity & well being/wellness. These needs don’t change. They represent the first wave. Example: The telephone introduced instant voice communication, offering convenience, gratification and safety. It wasn’t an “out of the blue” innovation, as it built on the consumers understanding of telegraph communication.

The second wave is when innovation allows these drivers to be satisfied in new and better ways.Typically, innovation is fragmented at this step. Single innovations drive forward one aspect of the product and yields a temporary competitive advantage. Example: The introduction of the mobile phone took all the drivers satisfied by the telephone and suddenly unanchored it. We could take those advantages with us anywhere.

The third wave is fusion of the drivers. Single point innovation is no longer enough. We want the advantages to merge into a more holistic experience. Example: The SmartPhone. Mobile voice communication was now supplemented by texting, web access, digital cameras and PDA functionality.

The fourth wave is where secondary needs come it. We extend the functionality of the innovation. Example: The mobile device, and the iPhone in particular, is suddenly become core to our lives. It ceases to be a single purpose product and becomes a personal platform. Computers have also gone to this level.

The fifth wave is addressing new targets in new occasions. Taking the innovation and extending it into all parts of our lives. Example: The iPhone becomes a GPS device. It becomes a shopping assistant.

All too often, I think we regard innovation as something magical and mysterious. Innovation is something predictable and replicable. It can be planned for, encouraged and fostered.

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