I admit to joining the ranks of the many who feel the word “innovation” is overused, often used synonymously with any form of product development. Real innovation does not represent adding simple upgrades to existing products, or developing products to compete with others. Real innovation is developing something no one else dreamed of.
Unfortunately, because innovative ideas are ones no one else has, we can’t know for certain how successful those ideas will be. Likewise, because they are new and different, the development expense of innovative ideas is often high. The bottom line is that the risk of new and different ideas is great.
For this reason, many businesses don’t really engage in truly innovative ventures. I recall sitting with a mentor and colleague years ago discussing our concerns when the business leader for our employer announced that the product development strategy was to be a “fast follower.”
In other words, the plan was to let competitors expend their energy and resources proving out new and risky ideas and then our business would immediately follow with a competitive product to those that were successful. That strategy drove an enormous change in product development process, which had been focused on absolute, incomparable quality.
It meant we needed to change from being slow and careful to being fast. I won’t say that there wasn’t some merit to the new CEO’s declaration of strategy. Market share was shifting negatively as the price gap between our quality products and other “satisfactory” products widened and the CEO was expected to remedy that. Still, it concerned me that the focus was to merely compete, and the plan to profit was to compete with, theoretically, less risk to product development cost.
Even so, the process change kept me very busy and I learned a great deal for the experience. It also taught all of us involved with product development a great deal about the fine balance between innovation and the cost and risk of it. It’s not a simple way to win in the market, though a successful innovation can indeed make a huge impact.
I say innovative development and, by implication, the business of innovation is not simple. Let’s consider some of the many complexities and challenges.