The Psychology Of Innovation

With new product failures exceeding successes, is it surprising that the rate of failure is not declining over time? As innovators, are we learning from our failures? John T. Gourville, of the Harvard Business School, may have part of the answer. He argues convincingly that the answer may be the psychological costs created when new products force consumers to change their behavior. Essentially, he argues that new products must not only provide a significant perceived benefit (i.e.- less costly, faster, stronger, etc.) but also provide minimal behavioral change.

An illustration of this idea is the differnce in adoption between the dishwasher and the microwave oven. The microwave reached 60% household penetration in 15 years while the dishwasher required almost half a century. The behavioral change from using a conventional oven to using a microwave oven (i.e. -open door, press button and cook) was minimal compared to the change in behavior required to use dishwasher.

Open Innovation Triage

Open innovation, by definition, requires that a company understand and assimilate highly specialized information from diverse inputs outside of its traditional competencies. That sounds scary. It requires the company to develop a new set of capabilities. That sounds even scarier to anyone who has tried to teach an old company new tricks. Among the most important of these new tricks is how to quickly and effectively triage information. To accelerate this process (and do it right) many companies have learned to use external subject matter experts to quickly and inexpensively synthesize information and assess innovation opportunities. It may be tempting to find the expert with gravitas but those having the most success are not using the big name HBS authors. They are tapping the "everyday"expertise of disciplines as prosaic as pharmacists, chefs and even auto mechanics. This "innovation triage" is a capability that tomorrow's best-in-class innovators are mastering today.

Innovation Defined

The word innovation is pervasive in business today. So pervasive, in fact, that the Wall Street Journal has identified something called innovation fatigue, which IBM lampooned with its Innovation Man Ad. But most of us know that real competitive advantage is the de facto product of some form of innovation. So which is it - lampoon or savior? The problem is that innovation as a business discipline has come with its share of hucksters and snake-oil salesman who define innovation as "facilitating a culture of out-of-the-box, goal oriented, value added, disruptive, web 3.0" thinking. For all of us in the business of innovation who are not selling snake oil, I propose the following basic definition:

Business Innovation (biz'-nis in'-e-va'-shen) n. a significant change to an existing business process, program, product or service that leads to profit growth

Note that under this definition innovation is well beyond "product" and, above all, it must lead to profit growth. Lampoon or savior? Profit growth sounds much more like savior to me.