I've been asked to prepare a presentation on the subject of innovation in the high-tech industry and spent the last couple days doing some research on the subject. What I found out was so fascinating that I decided to share it with you in a couple blog entries. So, let's start today with the fundamental question, what is innovation? And let me start with a quote from a French writer, Marcel Proust. He says "The real act of discovery consists not in finding new lands, but in seeing with new eyes". And that really made me think. I believe we often misunderstand between innovation and invention.
Indeed, innovation and invention do not have the same meaning. One definition of innovation I found a long time ago sounds like this: "New ways of leveraging existing ideas, technologies, processes etc. to create value". This includes two important elements, first innovation may consist in the new use of existing ideas, not everything needs to be new, and second, innovation is related to the creation of value, in other words to the notion of doing business. Invention on the other hand is: "The creation of new ideas which may or may not prove to have value." So, invention inherently includes the concept of coming up with something new. Whether that something new is valuable or not remains to be seen. Obviously, invention and innovation can go hand in hand. When Edison created the light bulb, not only did he perform a great invention, but he did it in such a way that it became economically viable. He innovated through the creation of an entire integrated electric system of which the light bulb was one component.
Enterprises today can innovate in a variety of spaces. The most known one is obviously the product/services innovation, but it is not the only one. I count five spaces, I'd like to discuss briefly here:
- Business Innovation, finding new business models, new processes to reach the customer or consumer, new efficiencies in the approach taken, new channels of distribution etc. That innovation is often left to the line of business managers. Marketing will innovate in how to approach customers and make the brand visible and desirable. Services will find new ways to help customers out and resolve potential problems during and after warranty. And I could go on like this.
- Ecosystem Innovation, finding new approaches to use the strength of the supply chain and distribution partners to delight the customer. This includes supply chain integration, visibility, exchange of information across the ecosystem, improvements in operations etc. It is all related to tying the enterprise better with its partners up- and downstream. Functions such as Supply Chain and Distribution are focused on this type of innovation.
- IT Innovation, finding new ways for IT to support the business better. This can go from the development of a private cloud to support the changes in workload throughout the year, to the development of platforms to support interacting with suppliers, distribution partners and customers.
- Product/Services Innovation and I put products and services together as the lines between both are increasingly blurring. How can new technologies improve the experience of an existing product? Can the integration of the product with some services deliver a new user experience? Can new things be invented by the creative combination of existing products/services with new technologies, channels, approaches etc. In a world where new things appear all the time, where software takes an increasing role in products, where the internet becomes ubiquitous, many new things can be dreamed up. This is the role of business units in general and the product development team in particular.
- And then, there is a last type of innovation that supports all of the above, and this is Technology Innovation. Indeed, identifying new technologies and making them available to improve the business approach, the ecosystem integration, IT or product/service combinations, is critical for companies that want to stay at the forefront of innovation. This is often how inventions will enter the innovation cycle. Having a technology watchdog that reviews what's new out there, is critical. Is this the reason why the role of CTO (Chief Technology Officer) is becoming so popular?
The key thing for enterprises is to carefully choose their bets. This requires curiosity and creativity. Indeed, curiosity to go and find out the new ideas that might be of interest and creativity to see how those could best be used in the context of the enterprise. In a future entry, I will take the example of the electronics industry, look at key trends and how such trends could lead us to innovation as described above, so stay tuned.
