What do we mean by Innovate?

This blog entry is in reply to Tom Foremski's challenge to one of the points in the previous blog.  Before proceding further, please do read that piece (see below) and then his piece.

Now I could just agree with Tom, because he is making some fair points, but what fun is that?  Instead I will try to maximize the difference between our points of view in hopes some new ideas will emerge.

Tom's key point is that innovation needs to be tightly tied to disruption, and that therefore the other forms of innovation I cite should be considered as categorically different, not really belonging to the set labeled innovation.  His first supporting point is that non-disruptive innovations will not overcome the inertia of the status quo, and therefore will not be classed as innovative. 

My pushback is that, if you are a member of the establishment, you do not want to overcome the inertia of the status quo.  It works to your advantage.  What you want to do is overcome the force of commoditization, which works to your disadvantage, eroding your margins.  But you do not want to disrupt the market, because that creates too much opportunity for new entrants.  What you need, therefore, is some kind of innovation that is not disruptive but does create new differentiation--essentially what all the othe forms of innovation I cite are all about.

Later Tom makes a similar point: "I think that innovation has to be very disruptive and offer a superbly excellenct ROI in order to gain attention, and overcome cost of switching barriers."  And thus he concludes, "every Silicon Valley start-up had better have some kind of disruptive innovation in its garage otherwise why bother?"  When it comes to start-ups, he and I agree completely.  For them the status quo is the enemy, and only disruptive innovations can penetrate it. 

But in my view Silicon Valley is no longer all about start-ups.  It is now somewhat about start-ups and somewhat about established enterprises, and both are under pressure to innovate, though from different quarters.  And I think it is the established companies that are having the bigger struggle with innovation.  And I think the main reason they are struggling is because they are defining innovation the way Tom does, and then realizing they can't do it very well, and then getting all down in the mouth about not being able to innovate.

Baloney.  They just need to innovate with their age group!  Don't try the tattoo.  Lose the earring.  And for God's sake, don't do your next pep talk as rap.  But do step up to reinventing your adult self.  Do redefine the way in which you can be of service to your customers.  Do reengineer your processes to be more adaptive.  Do improve and enhance, and even on occasion reinvent, your product lines.  And do it all as innovatively as you can, with the goal of creating outcomes that your competition will be unable to match.

Comments

[Douglass Turner]

This just slightly off topic but hey, it involves vector math.

In the case where an organization attempts to use N innovation vectors, what criteria (metrics) are used to ensure they point in roughly the same direction? Speaking geek: all pairwise dot products greater then zero as it were.

Regards,
Doug

[Geoff Moore]

Vectors in the hands of English majors sounds a bit like children running with scissors, but here goes. The mental image is that all vectors originate from the same point--you in the present--and extend like rays in different directions. Therefore, at the limit, no two vectors align, and you must focus on one to gain maximum differentiation from your competitive set.

[Christopher Meyer]

The tension that exists between Geoff and Tom's perspectives underscores the issues when valuing innovation from inside vs. outside the firm.

A internal process innovation may not generate value or be apparent if the cost savings or other value is not passed on to the customer.

Similarly, a firm that is catching up may be doing some very innovative things relative to itself, yet in the marketplace, the efforts are greeted with a yawn.

Geoff's basic broadening of the innovation landscape for mature businesses is appropriate but a high degree of intergrity is required when applying it.
Nearly every executive would prefer to view their firm as innovative. Like grade inflation in college, Tom's push back is also a warning against "innovativeness inflation" particularly for internal process and operational innovations.

[Antony Awaida]

Here is a - somewhat tongue in cheek - proposal to settle this detabe! Rather than quibble over semantics (and since I'm an engineer by training), I prefer to use numbers: Googling "incremental innovations" results in about 5.5 million hits, while Googling "disruptive innovations" yields a measly 2.6 million hits. If all innovation is disruptive, why are more people talking about incremental innovation? Or perhaps more fundmentally, if all innovation is disruptive, why would anyone bother to use the tongue twister "disruptive innovation" Vs just "innovation".
The entire article can be found on my blog: http://startleap.typepad.com/startleap_weblog/2006/02/microsoft_oracl.html

[Tom Foremski]

Geoffrey, Silicon Valley is ALL about startups. It is like a carnival slushie in which all the juice is in the bottom of the cup and the top is bland, chunks of ice :-). There are very few large companies in SIlicon Valley because of the M&A. However they love to use the word innovation. HP loves to use it, and so does Microsoft (which has a large campus in Silicon Valley.) Microsoft seems to think that the more times it uses the term it will make it true!

I agree completely that large companies have an interest in preserving the status quo--startups are attacking the status quo with innovation. Therefore innovation has to be disruptive but just because a large enterprise uses the term innovation does not mean it is innovative! Because by definition the large enterprise will not eat its own children it will eat the children of innovation--as Oracle is attempting to do with open-source imho.

Is innovation by acquisition innovation?

[Jim Plamondon]

For a detailed discussion of the theory of disruptive vs. sustaining innovations, as applied to a case study, see www.thummer.com/picking_winners.pdf. It takes Geoffrey Moore's "side" in this debate -- i.e., that disruptive innovation is just one kind of innovation, and that when choosing which kind of innovation to invest in, you'd better know the difference -- whoever you are.