The Barnes & Conti Resource Library:
Innovation Management

Innovation: Does It Always Have to Be “Disruptive”, “Game Changing”, and “Totally New to the World”?

by Nelson Soken, Ph.D

In Barnes and Conti’s Managing Innovation: Driving Ideas from Strategic Initiatives to Value Creation workshop, we define innovation as “optimizing the potential value embedded in an idea that is new to you”. The key point is that innovation generates value. We distinguish innovation from the concepts of creativity (process of generating new ideas) and invention (something that is new to the world).

A recent book by Kevin Kelly entitled, The Inevitable (2016) got me thinking about all the emerging technologies and trends that will shape our lives in the future. For example, current innovation trends tend to focus on topics such as IoT (Internet of Things), AI (artificial intelligence), AR (augmented reality), Big Data (data analytics), Autonomous Cars, etc. The list goes on and on. A recent Gartner report estimates that “8.4 billion connected things will be in use worldwide in 2017, up 31% from 2016, and will reach 20.4 billion by 2020.” (1) Another recent forecast estimates that there will be 10 million self-driving cars on the road by 2020 with one in four cases being self-driving by 2030.(2) By 2020, accumulated data will grow from 4.4 zettabyets today, to around 44 zettabytes, or 44 trillion gigabytes. (3, 4)

In recent weeks, I started reflecting on how these trends and statistics can create “shiny object” syndrome in which we assume there is only one future world filled with technology advancement as we get enamored with tunnel-vision focus on technology and “newness.” Perhaps, we might step back and consider that innovation and value creation can be achieved in different ways, one of which is looking to the past and/or not using technology. Maybe innovation can be created through experience and maybe that experience has a backward reflection for inspiration.

Innovation Through Experience

A few examples of this kind of innovation are:

• Sales of vinyl records have reached a 25-year high as the young and old have embraced the experience of tangibly owning a record in a physical form that a digital download doesn’t provide or owning a record of a deceased artist as a memento. (5)
• Polaroid: The current owner of the Polaroid camera assets is soon to introduce a product called the OneStep 2 for a $100 while still selling refurbished original analog products under the Polaroid Originals brand. In both cases, the new and old instant cameras bring back retro, nostalgic memories for baby boomers and also attract millennials who have grown up with digital photos on smart phones. As CEO of The Impossible Project (owner of Polaroid brand), Oskar Smolokowski says: “Right now, we’re actually adapting by not adapting” (what about changing the word adapting to innovating). He further states, “The smartphone is really saturating everyone's lives, and people are reaching out for other ways to experience photography... (Instant photography) is one of the things smartphones can't eat,” he said. “It’ a physical artifact.” (6)
• Carey Smith, founder of Big Ass Fans, found that only many of her customers did not want a fan in their home with connectivity, and that quality and aesthetics still matter more than smart features. A couple of questions she asks when evaluating product design are, “Does this connected device actually solve a real problem? Can I ensure a good customer experience?” (7)

Key Take Aways from Retro Innovation

With innovation, one must be careful about holding onto false assumptions or beliefs, whether conscious or unconscious, and that innovation is always about something new and filled with “shiny” technology. Case in point is the recent demise of the $699 Wi-Fi connected, app-enabled Juicero juicer that attracted approximately $134 million in funding from investors such as Google Ventures, Kleiner Perkins Caufield & Byers, Campbell’s Soup, and First Beverage Group, but was losing about $4 million a month. Maybe “technology-enabling X” is not always the answer. Here are some parting questions to consider as you consider innovations for the future:

• What problem am I solving with the technology and perhaps, more importantly, am I fulfilling a real customer need and going above and beyond by delivering it in a satisfying manner that creates a must-have, viral experience? Even if something is possible, if it doesn’t address a felt need, its value may be questionable.
• Can we create compelling services and experiences through process and/or incremental innovation?
• Can we shift the “paradigm” by going backward and retro to create experiences that are sentimental and nostalgic for one group of users (baby boomers) and “new” to those that never experienced it (millennials)?
• Can we avoid falling into the trap that one size fits all in terms of customers? Don’t forget the diversity of potential customers and the need to identify and position ideas for these different customer types (e.g., consider the innovation adoption curve concept proposed by Everett Rogers: early adopters, early majority, late majority, laggards [or traditionalist])
• Can we create a profitable business even if the market size is small because certain groups of customers are willing to pay a premium for the offering (profit margin) and we can work toward reducing production costs (read article by Michael Hammer: “Operational Innovation” in Harvard Business Review).

In summary, the next time the topic of innovation arises, avoid the instant and reflexive response to jump too quickly to conclusions about what innovation is and isn’t. Remember innovation is about “optimizing the value of an idea that is new to you” and not necessarily disruptive, game changing, and unique. Take a step back and reflect on the following questions to stay grounded in what innovation is really about and to avoid the unnecessary pressure of creating something new to the world:

• How can I identify different types of customers that adopt new ideas at different rates?
• How can I turn an “old” experience into a new, nostalgic experience?
• How can I adapt something from the past into something totally retro and new for a new generation that never experienced it before?
• How can I avoid falling into the trap of believing that cutting-edge technology always equates to innovation and value creation for customers?

Nelson Soken, Ph.D, is CEO of N.H. Soken Consulting and Chief Innovation Strategist at Barnes & Conti

(1) “Gartner Says 8.4 Billion Connected ‘Things’ Will Be in Use in 2017, Up 31 Percent From 2016”, Press Release, Gartner, Feb. 7, 2017

(2) “10 Million Self-Driving Cars Will Hit The Road By 2020 — Here's How To Profit,” by Olivier Garrett, Forbes, March 3, 2017

(3) “Big Data Facts,” by Vishal Kumar, Analytics Week, March 26, 2017

(4) “Big Data Statistics & Facts for 2017,” by Mark Mulcahy, Waterford Technologies, Feb. 22, 2017

(5) “Record sales: vinyl hits 25-year high,” The Guardian, January 3, 2017

(6) “Polaroid reinvented: A new camera brand and a 28-year-old CEO,” by Kaya Yurieff, CNN, Sept. 5, 2017

(7) “Do Your Customers Actually Want a ‘Smart’ Version of Your Product?” by Carey Smith, Harvard Business Review, August 8, 2017

Browse the Barnes & Conti Resource Library for more articles on innovation.