23 March 2008

"Innovation . . . is generally understood as the successful introduction of a new thing or method . . . Innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services"

If a company is to truly hit the spot with innovation time and again with any consistency and wishes to achieve profitable growth and create an advantage, it must do three things.

First, it must understand the people it is trying to serve as the individuals they are -- apart from any connection or interaction with the company.
That is, it must be able to temporarily forget and let go of its current business, strategies, products and brands as it observes how people (not just customers and potential customers) go about their daily routines. It must understand their behaviors in context, and develop a deep, inner conviction of the changing outer world -- an objective view of how changes in people's ecosystem of life affect that behavior.

Second, it must know how to go beyond its own perimeters of products, markets, and competencies; let go and challenge the assumptions, common practices and golden rules of doing business still held today: and go beyond what it has learned from consumers.
Only then can it conceive of entirely new opportunities by innovating across those people's behaviors -- as Apple has done across the changing ways of how consumers buy and listen to music. It must know how to define the spaces of greatest opportunity that nobody has yet even imagined.

Third, it must see itself "from the outside in" and formulate strategies around people's behaviors, not just seek to satisfy consumer needs and wants or customer requirements. It must execute activation plans that engage consumers and seamlessly fit all kinds of innovations into peoples' and consumers' behaviors -- or a customer company's work processes -- so that the people absorb and assimilate them.

"All innovation begins with creative ideas . . . We define innovation as the successful implementation of creative ideas within an organization. In this view, creativity by individuals and teams is a starting point for innovation; the first is necessary but not sufficient condition for the second".

It must create transformational life experiences, not just communicate features and benefits. Only then can companies spot and consistently and successfully bring to market winning innovations, achieve profitable new growth, and reinvent their business for the future. This is not easy. But it need not be terribly difficult. The right instinct already exists in most companies. We are, after all, customers and consumers -- people -- ourselves. As our examples will show, managers must learn to protect and direct that instinct to lead, and embed it in the organization, despite, and along with, the nature and ever-growing complexities of business.

"Innovation, like many business functions, is a management process that requires specific tools, rules, and discipline."