Innovate or die is a credo that is more relevant today than it ever was. What is innovation really about? Is it about competitive advantage, about reinventing business processes? About building entirely new markets that meet untapped customer needs?Selecting and executing the right ideas and bringing them to market in record time?
Is it about taking corporate organisations built for efficiency and rewiring them for creativity and growth? What can we learn from innovative companies? If we briefly look at the history of innovation, in the Sixties and Seventies, making things cheaper was the way to build competitive advantage, in the Eighties and Nineties, it was about making things better and as we ushered in the new millennium it is about making better things.
Innovation today is much more than technology or new products and even more than just new products, technology or processes, it is a balanced interplay of all elements.
How do companies innovate? What do innovative companies do differently? Let’s take a closer look at some of the world’s top twenty* companies to get a few mantras of innovation.
Apple is the first name that pops up when we talk innovation. Why? Because it delivers great consumer experiences with outstanding design; works towards a steady flow of new ideas that redefine old categories. iPod is an excellent example; addition of the iPod to Apple’s line-up essential grew the company’s top-line by 52 per cent!
What’s worked for Apple? To begin with, a focus on ‘end user experience’ - Apple’s early music success transcends technology features and is as much about basic human characteristics often overlooked by companies developing new products. What is the measure of success? Clearly, people and their feelings. Another key element is to keep an ear to the ground - how technology was going to change the world of music; converging technology and how it can entertain.
And, of course, organisational culture. Fostering a culture of innovation within the organisation is a subject by itself but suffice it to say that Apple encourages, supports and rewards new ideas. There are systems and processes to streamline the same and there is tolerance to failure.
Apart from the iPod and phone an interesting innovation from Apple has been The Nike+ iPod Sport Kit, a wireless system where some Nike shoes embedded with a sensor can communicate with Apple’s iPod Nano music player to track a runner’s performance and help choreograph songs to the moment. The Nike + iPod Sport Kit has already won an endorsement from Tour de France champion Lance Armstrong, who plans to run his first New York marathon later this year.
Another company known for its innovative approach is Gillette. It is known for its constant innovative thinking. It maintains focus to innovate at an aggressive pace, ensuring significant contribution of new products to the bottom line.
Fifty per cent of Gillette’s sales will soon come from products introduced within the past five years, up from 41 per cent in 1996 and twice the level of innovation at the average consumer-products company
What works for Gillette? Firstly, investment in R&D. To meet product-development challenges, Gillette religiously devotes 2.2 per cent of its annual sales, or over $200 million, to R&D, roughly twice the average for consumer products.
Secondly, a rigorous and thorough approach: Gillette develops multiple versions of any innovation. For a particular product, it developed seven different versions. Ultimately the winner incorporated many ideas from the six losers and 22 patentable innovations on top of the original idea
Gillette M3Power - a MACH3 innovation - was a groundbreaking, powered wet shaving system for men that delivered a totally new shaving experience. Yet another new product, Fusion Power, is Gillette’s breakthrough design that features five blades, a flexible comfort guard, and an enhanced Lubrastrip.
The combination of adding more blades and narrowing the inter-blade span creates a ‘shaving surface’ that distributes the force across the blades, resulting in significantly less irritation and more comfort. With every innovation, be it for men’s grooming or getting into women’s personal grooming space, Gillette keeps setting new benchmarks in comfort and performance. Gillette has been acquired by Procter & Gamble, which also has a reputation in consistently delivered innovative offerings to consumers.
P&G focuses on continuous product innovation based on an understanding of changing consumer lifestyles. It breeds not just a culture of innovation internally but also sensitises and seeks outside partners for new expertise, ideas, and even products. What works for P&G is technology that makes a difference, its consumer focus, ensuring that products meet active needs or create new needs.
Second and most important is rigour in approach. It took eight years and 180 researchers to develop a special polymer that helps prevent diaper rash.
The result? Ultra Pampers, and happier babies. And a collaborative approach. Some examples of P & G’s innovative products available internationally are Crest Whitestrips, to whiten teeth, and Dryel, a way to care for dry-clean-only clothes at home.
As we study innovative companies and what makes them tick, it is clear that they do have some ‘ways of working’ and a culture that is carefully nurtured. All the examples provided interesting learnings. Here are eight mantras for driving innovation:
Rigour: Innovation isn’t Botox. Inject it in the right corporate places and improvements are bound to follow.
But too many companies want one massive injection, one huge blockbuster, to last them for the foreseeable future. Unfortunately, successful innovation is rarely like that, it requires rigour.
End-user experience - consumer focus: The new forms of innovation driving organisations are based on an intimate understanding of consumer culture, the ability to determine what people want even before they can articulate it,
Inclusive vs exclusive: Involvement of all - employees, partners, channel, stakeholders, consumers. Listen to the said and the unsaid. A great idea can come from anywhere, not just an R&D domain.
Demystifying technology: Technology is meeting users half way to achieve ease of understanding and hence higher acceptance among users, unlike the past where a technological breakthrough was first about technology, leaving people in awe and admiration.
Innovation culture: The organisation has to cultivate a culture that breeds new ideas and encourages creative thinking. There has to be no fear of failure, enough stimulus to give wings to imagination and it’s almost mandatory to be in touch with the grassroots reality of consumers.
Innovative organisations are wired differently
Creative economy vs knowledge economy: The focus of the economic environment has changed. Increasingly, the new core competence for executives is creativity - the right-brain stuff that smart companies are now harnessing to generate top-line revenue growth. The game has changed. It isn’t just about maths and science anymore. It’s about creativity and imagination.
Design mojo: Innovation in product design combines what is described as “fanatical care beyond the obvious stuff” with relentless experiments into new tools, materials and production processes, to design ground-breaking products such as the iMAC and iBook. The iPod is a good example as it is not only a very new product but it clearly turns users’ previous experience and understanding of storing and listening to music upside down. The devil’s in the design!
Continuous process: Companies cannot rest on their laurels and need to be constantly innovative.
To sum it up, innovation is not a process, it’s a way of life for the organisation. Innovation is about fuelling growth, and doing so in a strategic manner, and in a creative manner. Innovation is about trusting the unpredictability of ideas and surrendering to them with passion and purpose alike.
(*2005 poll of 940 senior executive in 68 countries by Boston Consulting Group)
(The writer is Associate Vice President & Strategic Planning Director, JWT, New Delhi.)
Jul 17, 2008
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