Innovation is All Relative

by Kevin McFarthing

Innovation is All RelativeMany words and expressions are clearly relative, such as “larger” or “smaller”. These are easy adjectives as they often invite the word “than” after them. Other words are more subtly relative, like innovation; not grammatically but inherently.

These thoughts were crystallized in an online discussion with Jorge Barba on the subject of innovation failure. Innovation often fails because companies are beaten to market by a competitor who scoops your offering on performance, timing or another element of competitive advantage. The creative concept may have been compelling and original; the project execution done perfectly to plan; the launch implemented flawlessly. You called everything right, except for one thing. Relative to your innovation, somebody else did it better.

All innovation requires comparison to be successful. Companies often exhort their innovation teams to produce initiatives that are, for example in the case of Unilever, Bigger, Better and Faster. It always begs the question, “than what”? What exactly will the new innovation surpass in terms of size, performance and speed? In an ideal world, the innovation that is introduced to a particular market will work better, hit the market sooner and only as a result of that become bigger in terms of market share and revenue.

Very often the comparators for the Bigger, Better and Faster are existing internal projects that don’t reach the company’s strategic objectives. This is just a start but only tells you that you are improving against your own internal benchmark. Introspection may leave you with the warm fuzzy feeling that you’re getting better but doesn’t remove the vulnerability to external threat.

It’s much better to take an external perspective. It enables prioritization of those projects that will make the biggest difference; it will allow redirection of resource to improve those options with the greatest opportunity to have competitive advantage, and to those that are under the biggest competitive threat.

The choice of comparator, whether company or product, is a crucial element of any innovation project. It’s very easy to stick with the “usual suspects” of existing products in existing markets from existing competitors. It may be fine to do this if the market in question is robust, growing and resistant to rapid change, commoditization and disruption. However if there is an opening to disrupt a key element of the offering, innovation must take that into context as a minimum, and ideally seize the opportunity presented by the change in market dynamics.

Consumers/users/customers are the ones to define the parameters by which innovation is measured. Whatever is important to them should form the basis for understanding and insight; what is then tested; and what is the focus for beating current and future competition. In addition there should be some foresight to anticipate both opportunities and threats for disruptive innovation.

When Smith Corona decided to remain the producer of the world’s best typewriters they simultaneously defined the comparative set for any future innovation. As a result they were totally disrupted by the rapid adoption of word processing. Despite attempts to produce word processing machines, they remained firmly in the mindset of a typewriter manufacturer. They didn’t define comparators on the basis of consumer understanding.

So it is important to remember that innovation is always relative. In that context, companies should:

  • Fully understand what matters to consumers/users/customers
  • Define innovation on that user understanding
  • Put more emphasis on external comparison than internal options
  • Compare existing and likely future competition on user parameters
  • Actively include potentially disruptive options when testing innovation comparators

Innovation is relative, so always add “than x” after “better”.

image credit: word collage image from bigstock
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Kevin McFarthingKevin McFarthing runs the Innovation Fixer consultancy, helping companies to improve the output and efficiency of their innovation, and to implement Open Innovation. He spent 17 years with Reckitt Benckiser in innovation leadership positions, and also has experience in life sciences.

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