Innovation

“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. But the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do”. Apple Inc.

 

Innovation is invention in commercial use. Edison, for instance, did not invent the light bulb; there were others before him who pioneered incandescent bulbs. Thomas Edison and his team of scientists were the innovators who made it practical to use light bulbs.

Looking back, over the decades, reinforces how our lives have been influenced by innovations. In the midst of today’s digital era we observe how every sector, whether agriculture, manufacturing, transportation, retail, education or finance, is being shaped by digital technology. As the human race relentlessly moves forward, business leaders recognize the need to innovate and make a conscious choice to do so.

One way of categorizing innovation is in terms of scale. Incremental Innovation results in small improvements to the existing design of a product. Radical Innovation, on the other hand, yields major enhancements in the performance and functioning of a product. When an innovation is so radical it creates products that deliver a different type of value, it is called a Breakthrough Innovation.

Another approach to categorization is on the basis of the impact that an innovation has on existing technologies.  Disruptive Innovation, a term coined by Clayton Christensen, describes “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors”. Sustaining Innovation on the other hand improves on the existing dominant technology to produce offerings that better serve the needs of existing customers. It can be incremental or radical, yet it remains on the same technology vector.


Exhibit 9.1   Illustration of the disruptive changes in the computer industry (Adapted from a presentation by Mark Weiser/PARC titled “Nomadic Issues in Ubiquitous Computing”).

The computer industry is an apt example of a sector that has experienced wave after wave of disruptions, from mainframes to mini-computers, to desktop computers, laptops and smart phones. In half a century, our world moved from virtually no computers, to the “one computer, many people” phase, followed by “one computer, one person”, before heading to the age of ubiquitous computing “many computers, one person” (see Exhibit 9.1).

While popularly perceived in terms of the product dimension, innovation in reality is broad based and cuts across all elements of the mix. Experiences are transformed not only by products or services, but also by the way they are delivered and communicated. These other elements of the mix become important means of differentiation particularly when the product matures.

Take books for instance, while we continue to read them in the form of hard copies, increasingly now, we also read them in soft versions on iPads, Kindles and laptops. We procure them from bookstores as well as from the net. More often we are learning about new titles from friends on Facebook, or authors/publishers who reach us on the net or by email, or from Amazon recommendations. And we may dispose the ones we no longer want to keep by selling them online, or, if it is a soft copy, by clicking the “Delete” button.

For businesses that face disruption, the challenge is how to pursue disruptive technology. As history bears witness technological waves can dislodge existing market leaders. According to Christensen entrenched players find it difficult to pursue disruptive technologies since their infrastructure and operations are geared toward pursuit and support of the established, mature technology. In computers for instance, leadership passed from IBM mainframes, to Digital’s minis, to HP, Dell, Lenovo and others in PCs, and Apple and Samsung in smart phones.

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