The term “Innovation” is really really over rated

 

If I hear one more time that the key to success is from innovation or that a company’s number one value is innovation, I am going to write a blog about innovation and the REAL truth.

 

Wait, you are saying there is innovation; I agree there is, but nowhere to the degree that we are led to believe via the deluge of marketing, speeches, and emails.  For example, there is a TV ad that depicts two salespeople proposing a very innovative idea to a potential client.  The client is so impressed with the innovative idea and says he is sold… this is followed by a long pause and one of the salesperson says, OH, we just have ideas we don’t actually do anything!

 

I would propose that outside the implementation of pure R & D, two forces drive what passes for innovation.  One force is the customer, who is in the driver’s seat and is requesting (sometimes demanding) features that companies develop.  The second force is those companies who are leaders in their field execute well vs. being innovative.  Neither force represents true innovation.

 

As I stated there is innovation going on.  The internet (actually web browsing) has changed communication.  Digital photography is a disruptive technology and has replaced standard photography; and it appears that some of the social networking tools will change the way we communicate.

 

One world of caution about innovation; sometimes innovation does not hit the mark or is very slow to be accepted.  IP/internet telephony, while some might argue is innovative, has been slow to be adopted because of issues of reliability and ease of use.

 

Microsoft is not really innovative (sorry Microsoft), instead they execute (Vista is not a good example).  Microsoft Office does not sell because it is innovative; it sells because of Microsoft’s dominant market share and their integration of their products.  There are better Word or Power Point applications in the market, but major suppliers and complete suites sell. 

 

IBM was the market leader in computer hardware, not because of innovation, but more so because of having market share.  IBM realized that the hardware ride was coming to an end and converted to service and solutions company (still selling main frames but for different applications).  This was not innovation but pure survival (listening to their customers) and good execution.  As the world moves toward “cloud” computing, look for Microsoft to follow a similar path.

 

Dell and UPS are other examples of companies that execute with precision.  No one is holding them up as innovators. 

 

The common theme among Microsoft, IBM, Dell, UPS and other leaders is that they found a market niche where they have (or had) a differentiated product, and then listened to their customers.  By responding to their customers and executing well they maintained their growth and profitability.  Success was not driven by “innovation,” it was achieved by listening and execution.

 

So, while there are and will be many ideas out there to be discovered, the real driving force for success is to execute well in a timely manner, such that you beat your competition and respond to your customer’s demand.

 

 

RHL  6/4/09

1 comment to The term “Innovation” is really really over rated

  • BRM

    I agree; true innovation is a rare commodity. Perhaps, traditional business theorists and bloggers glorify the concept of “innovation” because the Utopian potential of being an “innovator” and/or the spectacular examples of wealth accumulation by people/businesses that are popularly perceived to be innovative are more appealing to write about (and read) than the notions of listening to customers’ needs and executing with precision. In the case of Microsoft, innovation was retaining the right to sell software, not managing to maintain a dominant market share in the infancy of personal computer history. Kodak was an innovator in traditional photographic technology, but the decline of its market share had more to do with the company’s lack of agility. Needless to say, I think you’ve shared some sage advice.

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