What innovation really is?
Innovation is about generating ideas that are convertible into a product, service or process that would add value to customers and society, so as to achieve results (economic and social ) sustainable over time.
Innovation becomes sort of a three-stroke engine (Ideas / value / results) that has to be continuously and systematically feedbacked. For this engine to start up and never stop, the organization must have a clear leadership with a commitment to stimulate cooperation between the areas that are dedicated to running the current business with the areas involved in the exploration of new business.
To innovate you must have ideas. These ideas are achieved both by encouraging your people to propose them (cooperative program) as by riding a systematic observation scheme of what and how others innovate (scouting program) . In both cases, there are many methods or mechanisms that facilitate the systematic generation of ideas as a team. Idea generation methodology requires some time to explore the market, both in our immediate environment as globally. This first step to innovate is to explore things that may be applied, in one way or another, to the needs of our market.
There is no use in a company to generating thousands of new ideas if they are not analyzed in terms of what value they could bring to someone ( customers or society ). This is where the innovation process really begins. Innovation is what the market will bear ( that’s clearly what distinguishes an innovation from an act of invention, which is mainly the result of a single creative act ) . The analysis of the value of our products and those of competitors, is a central theme in innovation. In old times, whatever worked could be worth. Today, the functional aspects are a necessary, but not sufficient factor. The style, the experience to use or live a value proposal, may be much more important than the thing in itself. In this context, it is essential to give a comprehensive analysis, the crumbling of an idea, based on the value it could bring to a particular niche, large or small. Knowing how to tune to a specific customer segment is the key to whether or not an idea makes sense. Therefore, the major innovation companies currently carry on ethnographic analysis, anthropological and sociological studies of customers, in order to determine how they act and what their needs and desires are.
With no economic or social outcomes, you simply can’t maintain this constant cycle of innovation, that has to generate new ideas, to be turned into new results. It is the fuel that powers the engine of innovation, which, in turn , moves the entire company. And an essential element to get results is how you manage the payback curve, i.e. the relationship between investments and outcomes : how long are you pouring money on innovation and how long you need to recover from the investment.
More in my book: Ideas x Value = Results