Kieran Flanagan @ThinkKieranF
What makes an innovation successful? Why is it that one seemingly good idea that offers social and economic benefit succeeds when another seemingly good idea fails? Is it really just a function of being first to market or of throwing enough cash at the marketing campaign?
Great questions that I am often asked when working with leaders and teams on their innovation strategies, so let’s dig in.
Research published by Oded Shenkar, at Ohio State University, asserted that 98% of an innovations value was captured by the immitators, not the innovators. So, being first to market is clearly no guarantee of innovation success.
However, many big brands that have copied innovations by smaller organisations have also failed, despite having deep pockets and large marketing budgets and sales forces. Clearly, something other than their engagement strategy is also at play here.
In fact, what seems to unite successful innovations, independent of their quickeness to market or the scale and creativity of their engagement is an ability to pursue value-based innovation rather than technology-based.
And yet, that’s not how most organisations focus their innovation efforts.
Typically, leaders and organisations will invest in what might be best understood as a commercial punt. Gambling on being able to predict the next big trend or else crossing their fingers and hoping their designers, technicians and engineers come up with the next advance in their field.
Luck, of course, is a poor strategy, so how might we best focus our innovation strategy and increase our chances of success.
One of the reasons value-based innovation matters is that it is market tested - you already know whether the value you seek to provide is relevant and salient as it is already being met in the market, albeit in another format.
Consider Kodak as a well understood example of this.
Their innovation, like most organisations, was technically focused. They invested in better film technology and even explored digital photography. But this was all very product focused and took very little account of the value exchange they were engaged in with their customers.
The true value they provided was “memory preservation”. This value has spawned the cloud computing industry, among others, and billions of dollars in revenue. Value that Kodak could have provided had they innovated through a value-based lens.
So, how might we all engage in value-based innovation? Start with defining the universal value and need that you satisfy. In other words, what service are you really providing and what is it that you are actually selling?
Most importantly, be relentlessly focused on the value you provide.