Journal of Product Innovation Management

There are some very interesting papers on disruptive innovation by the likes of Rebecca Henderson and Clayton Christensen in the free sample edition of the Journal of Product Innovation Management. After reading all these papers, and all the divergent views on innovation contained within them, you realize just how complex a subject innovation is. Gatignon et al. (2002) summed it up nicely:

" . . . after 30 years of research into innovation and business performance, key concepts and measures are often ambiguous and, consequently, there is substantial empirical confusion on the effects of different kinds of innovation on firm performance and competitive superiority."

What paper/book had the most impact on you?

When things start to get frothy, I always re-read this paper: Strategy and the Internet, by Michael Porter

Be different, but remember the past

One of the difficult things about managing innovation is that you have to, at the same time, seek out new ways of doing things and respect the old theories of business. The old rules of creating value for customers profitably still apply in 2007. And no, it probably won't be different this time.

Basic stuff for innovation: the function of money is a store of value.

So what of all these "Web 2.0" firms that we hear so much about in the media? Are they creating value that users will be willing to pay for? There's a huge difference between using stuff in the online space for free and valuing it enough to crack open your wallet to pay for it. Let's face it, YouTube.com did/does not have a profitable business: it was lucky to have been "saved" by the Google purchase. Will YouTube ever make money from standing on its own two feet? Who knows. The fast followers that came after YouTube's apparent success like bees to honey (or lemmings) may not be so lucky.

Will we see a repitition of the carnage we saw after the bursting of the first dotcom bubble? You just have to look back at the first dotcom bubble for some historical guidance: today, it's not Pets.com that endures, but the old bricks-and-mortars supermarkets, like Tesco.

Disruptive: the most over-used word in innovation.

Nice little tool

I came across a great tool for making your own motivational/demotivational postcards from your own images at the Despair Web site. You can have a lot of fun with this if you want to make some innovation-themed cards for presentations etc. Here's one I made:

Finding good marketing in unexpected places

It's a good habit to search out other industries for tactical marketing ideas. Why? Other industries may be more competitive than the one you're in, suggesting that marketing will also be relatively more innovative. Also, there's a good chance your competitors are not doing this (until you do).

I received today what I think is an excellent example of customer relationship management from a company that I buy music from. The files I buy are WAV files, which I then burn to CDs.

As a thank you for supporting Beatport in 2006 we would like to offer you three free credits*. To redeem your three free credits* visit Beatport, click 'Redeem A Gift Card' from the left menu and enter the code below.

This offer is great because it is a real "thank you" from the company to a customer (me) for supporting it during its first three years in business. It's not a measly 10% discount. It doesn't require making a purchase before getting the credits. No, it's a genuine gift! (The three credits amount to three free songs, which would normally cost me around 6 bucks.)

Somebody at Beatport really knows what they're doing. Sure, it's cost them a bit in the short term, but they've gotten themselves a loyal customer as well. So there you go: customer relationship management innovation!

Those pesky fast followers

The last post, which was posted over a week ago (time flies in the blogosphere!), showed examples of firms pursuing a "fast follower" innovation strategy. You can also look at this as an exploiting innovation strategy (as opposed to an exploring innovation strategy). Of course, no firm follows only an exploiting innovation strategy, but there will be a preference -- which will be evident in the firm's actions.

Firms operating in Asia (particularly China) can learn a thing or two from Japanese firms about innovation and, importantly, protecting those innovations. There is no love lost between Japan and China, yet Japanese firms still want a piece of the action over in China. A key goal for firms like Toyota is to make the outcome of its innovation activities intangible: hard to copy. It is the cumulative, ongoing, incremental innovations across an entire organization that are hard to pillage.

The following Manifesto from the ChangeThis Web site presents some wonderful insights into Toyota and its culture of innovation. This piece places a lot of emphasis on the importance of attitude to innovation.

Fast followers in Asia

It is going too far to say that it is only firms from the West that can innovate. However, there is a lot of truth in the stereotypical view that copying is rife in places like China and Taiwan. The following photos offer some real-life examples of what to expect if you're thinking about entering the Greater China country-markets with your product offerings:

 

The Taiwan-based company that produces this MP3 product, Luxpro, is currently fighting Apple in the Taiwan courts. This news has been picked up by mainstream media, including the BBC.

Kayaking and lead-user innovations

One of the big differences between incremental (continuous, evolutionary) innovations and radical (discontinuous, revolutionary, breakthrough) innovations is that, from the firm's perspective, incremental innovations follow an inside-out trajectory to market. By contrast, radical innovations tend to follow an outside-in trajectory. In other words, radical innovations often come from users or, more specifically, lead users. Eric von Hippel, professor at MIT, defines lead users as users whose, "present needs foreshadow general demand" and, importantly, "expect to obtain high benefit from a solution to their needs."

In some industries, such as medical instruments, many radical/breakthrough innovations come from users themselves (e.g. brain surgeons), which is totally understandable, considering the environment in which they work. Another area in which lead users create radical/breakthrough innovations is leisure. This is partly due to the fact that in this industry, people are quite passionate about what they are doing: there is an incentive to innovate. Examples of products that were originally developed by lead users here include sports drinks, the sports bra and skateboards.

There is a really fascinating interview here with Carla Bliss, professor at Harvard Business School. In the interview, professor Bliss discusses her research into lead-user innovations in the water sports industry, specifically, kayaking. This interview sheds some interesting light on how industries develop, dominant designs, user-manufacturers and established manufacturers.

After reading the article, you should note that there is a definite shift, or "tipping point," where the emphasis moves from exploring to exploiting an innovation. A must read!

Assume nothing

Today's Daily Telegraph has quite an interesting article on the brain, along with some interesting links. Some of the brainteasers and optical illusions are a bit old, but there are a few new ones in there as well. I thought this optical illusion, which is a just a static image, was pretty good!

More of these can be found here.