There are three necessary elements of any innovation. This blog explores these and provides our view on where priorities should lie.
It takes 0.86 secs to find 581 million results on a Google ‘Innovation’ search. The word innovation is massively overused and misused and it’s amazing how many different definitions there are out there. Is innovation the same as creativity? Is it all about implementation? Does it really matter?
We believe that definition does matter. The more definition we can put around terms, the less time we waste talking (at cross purposes) and the more easily we can get on with the business of making innovation happen. Our definition is simple:
Creating something valuable out of a new idea
There is a surprising amount of detail in there, so let’s unpack our definition a little:
A new idea. To qualify as an innovation, there has to be something new about the idea. There is very little new stuff out there so finding a ‘new’ idea tends to require innovators to look outside their domain/industry (see innovative use of drone’s at Zipline) or to connect 2 existing ideas together (Azuri uses solar and mobile phone tech to create a high impact energy solution). Let’s not get precious about newness – new to your market or industry is great, if it's valuable.
Creates something. The idea is not enough – something must be done with it. One of the things we pride ourselves on is our ability to move things beyond talking, to building, testing and refining prototypes – most ideas don’t survive contact with reality and so early prototyping is essential so that ideas can be modified, ditched, etc. The iterative lean startup approach is great for this purpose.
Valuable. New ideas and creation are pretty common aspects of most definitions of innovation, but we feel that the third dimension of value must also be there. This is where we connect to our blog title, inspired by the 'show me the money!' scene in one of my favourite films - Jerry Maguire. Value, as you will read below, is definitely not just about ‘show me the money’, but pretty early on in the innovation process the value must be defined. It may take a lot of time and iterations to find it, but it is essential to ‘show me the value'. We see 3 types of business related value:
Customer – what problems could your product, service, process or technology solve and for which customers (or non customers)? Busu’s award winning mobile app helps people who want to learn a new language but otherwise wouldn’t have the time. This is the most important dimension of value to figure out – if the customer doesn’t want what you have, the other 2 forms of value, below, will not occur.
Company – this is generally about ways of generating revenue or minimising cost (show me the money). Nespresso has now started a subscription based machine and pod deal – convenient for the customer and recurring revenue for Nespresso. Value is not always about profit – impact on society and environment are more and more important. Philips have introduced a pay per use lighting solution – simultaneous profit and environmental impact.
Ecosystem – enable financial or other value in the ecosystem of suppliers, partners or other stakeholders the company operates with. If there is no value, then why should they work with you? Take Eden McCallum as an example - a boutique consultancy staffed by an ecosystem of freelancers, who get regular, interesting work and belong to a virtual community.
Real innovation occurs when ideas, creation and value come together. All three dimensions are important but we challenge you to put disproportionate effort into figuring out the value. A lot of the time this must start with customer insight – ensuring that we really understand how our offers solve their problems. Product/service-customer fit sets the foundation for growth.
So the next time someone comes out with a crazy idea in a meeting - share the family motto – ‘Show Me The Value!'......just kidding ;)
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