Innovation requires an environment that is open to new ideas. That's all well and good, but innovation is more than blue sky. In order to encourage new and novel solutions, you have to ask the right questions.
Many brainstorming sessions are centered around questions that boil down to "What should we do in response to our competitor’s product or service?" Now the reason you are having the meeting in the first place may be because your competitor has just taken a big chunk of your market share, so that seems like a legitimate question.
The problem is that you are in danger of limiting the discussion with the question itself. Even new ideas in response to this question are limited by point by point comparison to your competitor.
If you find yourself using a spec sheet of common features as your roadmap for developing your next product, it should be easy to imagine that your competitor is doing the same in a parallel brainstorming session. I've been in a few of these meetings, and believe me they are more sunshower than storm.
Whatever your goals with respect to your competition, the product or service as an object and the problem or opportunity it addresses don’t care. This is why, despite the advantages of established players, there is always room for an insurgent with a new approach, a new set of core competencies and the wherewithal to make them real. This is the nature of innovation.
Take a step back and ask what seems like an obvious question: "What is the problem?" Seems simple enough, but framing the problem is your most difficult task.
If your solution, challenges the way your audience thinks about a problem and wins them over you have created a problem for your competitor that is more profound than the loss of a few points of marketshare; you are controlling the agenda as opposed to making an isolated point in an ongoing tit for tat with them. Now they must change the way they think about the problem or challenge the agenda that you set. If they are inclined to respond by pinning your spec sheet on the wall, then they are now following you and limiting themselves.
For an example of this dynamic at work, you need not look beyond the perhaps overused example of Apple’s iPods. There has been a lot of talk about the demand Apple has created with their interface, the aesthetics of the products, the small size, iTunes, their branding. All of these are contributing factors, but the real reason for the success of the iPod is that they reframed the problem, executed a plan that was not in anyone else’s playbook and surprised the market with a new set of possibilities.
To date, their competitors have not managed to present a compelling enough case for the existence of their new products. They simply add features and follow the media player world view that Apple established.
Apple's competitors can’t do anything about Apple’s propensity to push the envelope. What they can do is push the envelope a bit themselves. Their own envelope, not Apple’s.
I'm sure the guys responsible for mp3 product development for Creative, the Zune, Samsung and the rest are sick of pronouncements that make their task sound easy. The truth is that Apple is a formidable and agressive adversary that managed to get everyone involved in development, branding, etc. on the same page.
Most industries do not have a dominant player with such a grip on the product development agenda. Usually the advantage is much more fragile. The opportunities to create standout products, compelling stories and take control of the market abound. The payoffs as demonstrated by Apple should be motivation enough to shake things up.