Why is understanding innovation important?
Although companies are implementing many new invention ideas, most organizations are having trouble keeping up with the rapidly changing market. The rate of change in marketplaces has never been faster, and it is still accelerating. The ability to evolve and adapt with the marketplace is a critical competence area for all organizations, and innovation is a key part of this.
Organizations are recognizing the need to critically evaluate their own innovation processes. It is common for organizations to have a haphazard relationship with innovation because they do not understand the fundamentals. Without the proper building blocks, it is easy to get lost in the process.
The Innovation Framework
Innovation is a science, which means that organizations can get better at it. With an understanding of the overall innovation framework, organizations can learn how to tailor the innovative process to their own needs. The first step is to understand the fundamental building blocks of innovation.
Domains of Innovation
There are three main domains where innovation can happen. Most broadly, innovation can fall into scientific discovery, invention or technological development. Many products and services fall into multiple categories at their different stages of development.
It is important for organizations to understand these different domains before diving into the innovation process. Organizations will often go into the innovation cycle, only to run into the need for a scientific or technological innovation along the way. Given that scientific innovation can take years, this can be a big problem for the company’s innovation cycle.
In order to avoid having to change courses quickly, organizations should think strategically about what kind of innovation is needed, and whether they have the capacity to deliver that type of innovation within their given timeframe.
1. Scientific discovery
Scientific discovery is about understanding how the world works. It is one of the few truly objective types of innovation, as it involves finding underlying truths. Unlike the other types of innovation, scientific discoveries are learned or stumbled upon rather than invented. An example of scientific discovery is the Pythagorean theorem, which reflects a fundamental reality of geometry.
This type of innovation takes a long time, both to come up with a discovery and to commercialize it. If companies want to innovate on short cycles, they should generally avoid the need for scientific innovation. Scientific discovery tends to be the domain of the public sector, academia, and focused R&D companies, and it is rarely used in corporate sectors.
Companies will need to take an active role in the implementation of the scientific innovation that underpins their brand. Leaving innovation up to chance can create serious problems when it comes to rolling out new products.
The Concorde was once a breakthrough innovation that was set to disrupt the entire commercial aviation industry. This plane could cross the Atlantic in under four hours, but its innovators misjudged key aspects of scientific innovation.
The Concorde had roughly ¼ the fuel and passenger efficiency as a standard Boeing 747—it also had safety concerns related to its experimental design. The companies behind the Concorde were banking on future scientific advancements to solve their current problems. These problems contributed to declining investment which undercut innovation for the Concorde project. Ultimately, a lack of technological innovation was the driving factor in the downfall of a once promising aviation technology.
This example illustrates why it is so important for organizations to create a roadmap for innovation, where they determine exactly what kind of innovation they plan to do, and on what timelines.
2. Invention
If science is the core of all innovation, invention is built around it. Invention is the process of creating new products or services, and it often involves the application of a scientific discovery.
The lithium-ion battery is one example of an invention that continues to evolve. In the 1970s, it was discovered that lithium batteries could store massive amounts of energy. However, lithium batteries were highly explosive due to the pyrophoric nature of the metallic lithium present in the anode.
In 1985, Akira Yoshino invented the first commercially viable lithium-ion battery, which used petroleum coke instead of reactive lithium. Current Li-ion batteries rely on the same underlying scientific principles as the original lithium battery, but are much safer to use in the creation of new and improved products.
It is difficult for an organization to build an invention from scratch that responds to their specific needs. For this reason, invention is often about scouting and reconnaissance to see if somebody has already invented the product or is close to a breakthrough.
3. Technology
Technological innovation is the combination of scientific discovery and inventions. It involves blending and applying existing components to create products and services that are more useful than the sum of their parts. In short, technology is the application of invention.
Most innovation happens in the technological domain. It accounts for many of the new innovations in healthcare, business, and the consumer sphere.
However, technological limitations can also cause great ideas to fall flat. The Apple Newton, released in 1992, was a precursor to the iPhone. It was way ahead of its time, but technological limitations at the time meant that it could only store around 140 kb, and its highly anticipated hand-writing recognition feature did not work properly. Due to the technology that was available at the time, the Apple Newton’s breakthrough features were barely functional.
The Apple Newton shows us the dangers of releasing a product on the market before the technology is ready. On the flip side, Apple has also shown us what looks like when technological innovation goes well.
With the iPhone, Apple blended and creatively applied existing inventions to create something truly groundbreaking. It was assembled using easily manufacturable components that had been proven to work well. By using technology that already existed, Apple was able to innovate technologically and tailor to the needs of consumers and prioritize user experience.
Case study: Segway and the role of uncertainty
The story of the Segway shows us the importance of questioning assumptions before jumping into the innovation process. The manufacturers of the Segway believed that it would revolutionize transportation in dense urban centers. Forbes reported that they sold just 30,000 units in six years, much less than the 10,000 units a week that the company had anticipated.
The company had assumed that people would transport their Segways to dense urban areas via car. What they failed to account for was the fact that the Segway was too large and heavy to fit into a trunk.
What happened? The company got excited about engineering and technical development, and failed to consider the real-world factors which prevented Segways from finding mainstream success. In the creation of new and improved products, it is important to systematically examine the underlying assumptions and develop a roadmap for innovation that accurately assesses risk.
In order to innovate successfully, it is necessary to understand how innovation works. Companies need strategic processes that are tailored to their specific innovation needs.
HeroX uses a scientific innovation framework to understand each component of the process and intelligently manage innovation.
Types of innovation
There are three main types of innovation: disruptive, additive, and incremental.
1. Incremental
While large breakthrough innovations tend to grab the most headlines, most innovation happens slowly. Incremental innovation involves making small improvements a bit at a time to existing products or services. The most successful companies of our time—Apple, Google, and others—have all embraced the potential of incremental innovation. However, what most companies miss is that incremental innovation is only one part of the innovation space. It takes a holistic approach to open innovation to create a lasting impact.
Incremental innovation is often highly responsive to the needs of customers, since the product can be tailored to specific consumer feedback. While incremental innovation is generally considered to be low risk, it is important to keep in mind that the market may shift due to disruption, at which point incremental innovation will no longer be useful.
Incremental innovation should fuel a culture of innovation that embraces the potential of adaptive and disruptive innovation paths. Learning to deal with small challenges to the status quo helps encourage people to look for new opportunities for innovation. By flexing the team’s innovation muscles on a smaller scale, incremental innovation enables additive and disruptive innovation down the line.
2. Additive
Additive innovation involves creating new capabilities in an existing product or service. This type of innovation does not create new markets, but rather improves existing ones.
We can recognize additive innovation in the evolution of automobile design. In 1963, Robert Kearns innovated on windshield wiper technology to create intermittent wipers. This incremental innovation took existing windshield wiper technology and added new capabilities that changed automobile design from that day forward.
3. Disruptive
The term “disruptive innovation,” coined by Harvard Business School professor Clayton Christensen, is innovation that significantly changes the way that an industry operates, thus disrupting the existing market. This type of innovation tends to make the most headlines, but it happens rarely.
Examples of disruptive innovations include the digital camera, which shifted the market away from physical photo printing. Wearable devices such as smart watches are an example of a disruptive force that have prompted new innovations in healthcare.
Although we often think of disruptive innovations as being based on groundbreaking discoveries, they can happen without the need for a scientific breakthrough. For example, Tesla engaged in technological disruptive innovation when they took existing Li-ion batteries, and figured out how to manage thousands of them in one car using their signature Battery Management System. By taking an existing piece of technology and making a key breakthrough change, Tesla was able to revolutionize the automotive industry.
Disruptive innovation is difficult and risky, but it is often a first step. If a company produces a disruptive innovation, they can be hugely successful. Disruptive innovation can also threaten competitors by taking away, or otherwise disrupting, their core market.
This was the case with Kodak, whose failure to make the shift to digital photography caused them to go bankrupt. Even though Kodak had researchers exploring digital photography, the company failed to recognize that the digital photography disruption would completely take over their market share. Kodak continued to make incremental innovations in film photography, but what they needed to do was prepare for a market disruption.
Technology readiness levels
Innovation is all about managing risk. Some level of failure is inevitable, so it is important for organizations to introduce the right level of risk at every stage of the process.
Technology readiness levels (TRLs) are a way to estimate how far along a piece of technology is in order to help manage risk. NASA uses a TRL scale ranging from 1 to 9. At level 1, scientific research has just started. As a technology matures, it moves the TRL scale: experiments are conducted, proof-of-concept technology is developed, and the technology becomes less speculative and more implementable. Once the technology has gone through a successful mission, it reaches stage 9.
While most organizations do not need to implement a 9-part TRL, it is good for organizations to be able to evaluate how far along their innovation is.
In the case of Tesla, Lithium-Ion batteries were already at a high TRL by the time that Tesla started implementing them. Since they had already been tried and tested, Tesla was able to design breakthrough solutions around existing pieces of technology, without having to develop the science or technology itself.
The problem: why does innovation fail?
Innovation is always clear in hindsight, but rarely in foresight. At the time that they are first proposed, many great innovations seem like absurd ideas. Many organizations adhere to their tried-and-true approaches and fail to recognize breakthroughs, but then get left behind as the market evolves. On the flip side, other organizations jump headfirst into new invention ideas without a clear roadmap for innovation, and therefore do not know what they are innovating towards.
Successful organizations are good at risk management. As we know, not every innovative idea is the basis for a great additive or disruptive change. Successful organizations provide space for far fetched ideas to develop while allowing the less viable ideas to fail fast. They are able to determine which ideas have the potential to be groundbreaking, while sifting out truly risky ideas. They strike a balance between innovation and consistency that allows them to grow and change, while staying true to the approaches that work for them.
The solution: understanding innovation
In order to innovate successfully, it is necessary to understand how innovation works. Companies need deliberate processes that are tailored to their specific innovation needs.
HeroX uses a scientific innovation framework to understand each component of the process and intelligently manage innovation.
Opening up innovation with crowdsourcing
Companies are becoming increasingly aware of the power of open innovation models such as crowdsourcing, which brings in new perspectives and out-of-the-box thinking.
Crowdsourcing tends to work particularly well for technological innovation, as it allows people to come up with novel applications of existing inventions and scientific knowledge. Additionally, in the invention sphere, crowdsourcing allows organizations to scout for solutions that have already been developed.
Looking forward towards a scientific innovation model
In order to innovate successfully, it is important for organizations to have a cohesive vision of what they hope to get out of their innovation processes. By understanding the different components of innovation, organizations can recognize the limitations and opportunities of their own projects and work towards an intelligent model of innovation management.
