The Truth About Innovation by Max Mckeown

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Truth 2: A Beautiful Idea Is Never Perfect

There is no such thing as the perfect business idea. There are good ideas that reward effort. There are ideas that attract interest and inspire support. There are beautiful ideas change our perception of what is possible and what is desirable. People invest hope, time, and money in attempting to make beautiful ideas real.

You can always improve a worthwhile idea. Either the detail of the idea can be bettered or the implementation of the idea can be enhanced. Anything useful can be made more useful. Anything desirable can be made more desirable. Any practical limits may never be reached and certainly not in your lifetime. At the point that an idea approaches perfection, fashion and expectations surge ahead leaving the innovator with considerable room to find further improvements.

Wal-Mart, K-Mart, and Target all launched in the same year – 1962 - with the same idea. Discount retailing brought them all success but in different ways and at different times. The idea was simply to offer big brands at discount prices but has been tweaked, sculpted, and shaped by circumstance and creativity.

Attention K-Mart Shoppers - K-Mart boomed initially but failed to re-invest in technology or store concepts. At first, famous for its “blue light specials” complete with flashing police lights and in store announcements drawing attention to time-limited bargains. Later, famous for cheap, drab, dirty stores, falling behind rivals, declaring bankruptcy, firing thousands of workers, and merging with Sears Roebuck.

Always Low Prices, Always - Wal-Mart surged ahead with its slogan “Always Low Prices, Always” using its investment in state-of-the-art technology to reduce cost of products from production to sale. It became the largest company in the world by revenue before growth slowed. Younger customers wanted a more luxurious, less corporate experience. Many non-American customers wanted quality and conscience ahead of low prices.

Expect More, Pay Less - Target has focused on offering high quality goods at low prices rather than cheap merchandise at dramatically low prices. This has attracted younger, more affluent customers who affectionately refer to the store as “Tar-zhay" with a French pronunciation emphasis it’s boutique aspirations. Top fashion and product designers work with Target to develop exclusive ranges at value prices. The company maintains an extensive network of suppliers and trend spotters who provide information about what should be on their shelves. There are no in-store announcements or piped music. Instead, you will find cafes, banks, pharmacies, wider aisles, and more aesthetically pleasing store design. It gives the impression of acting on ethical issues before public opinion or legislation forces them to comply. For the moment, it is leading the way with its interpretation of the discount idea.

A powerful idea, well expressed is difficult to stop over time. Innovators want to deliver the promised benefits of the idea. They keep trying until the idea becomes practical and popular. People want what the idea promises and are willing to support the latest, greatest attempt to put the idea into practise. This mixture of individual dedication, often without reward, and mass-market interest in the possibilities inherent in the idea combine to provide innovation with enduring impetus.  

The founder of Wal-Mart used to visit his rivals with a little tape-recorder to steal ideas but Target still managed to deliver the discount concept in a better way. The founder of Staples sent undercover teams to his rivals so that he could find out about their weaknesses but missed the strengths that led to Office Depot overtaking them. The founder of Dell found ways of delivering Hewlett Packard’s most profitable products for much lower prices but forgot to deliver their quality so within a few years had fallen behind again. Ideas need constant renewal.

A great idea will never be perfect and will never work perfectly in all markets and all seasons.

Wal-Mart has imported its complete blueprint to Japan including a automated distribution centre with five miles of conveyor belts, an in-store computer system and low prices. It has also imported a certain disregard for national differences and replaced Japanese managers with American executives with no experience outside of the American Wal-Mart family. The result has been $1 billion invested and about the same amount in cumulative losses. Japanese employees fought back over the way they were treated and Japanese consumers object to their favourite tastes and brands disappearing from the shelves – even if they are cheaper.

By complete contrast, 7-Eleven has grown to become the biggest chain in the world with 1000 more outlets than McDonalds. Its idea is convenience shopping. The concept started when a dock employee from Texas started selling bread and milk to other employees. In the 1980s, Japanese investors bought the chain and who helped the format expand to eighteen countries. Its history has taught it that the convenience idea travels well internationally as long as it is adapted to reflect local tastes. Each country works with franchised partners who share 50% of the profits and contributes local knowledge that delivers convenience appropriate to local tastes.

All good ideas recognise opportunities and meet needs. Some variations on a specific idea can be protected legally in some countries for a few years, but no idea can be protected for long, and big ideas can rarely be protected at all. And since the idea that you try to protect isn’t perfect there is nothing to stop anyone doing something better. The only response is to keep improving on your idea particularly in ways that are difficult for competitors to believe or understand.

Amazon thrived because it implemented the online bookstore idea better than any of its early rivals did, not because it was the only company to have the idea or the first company to have the idea. It continues to grow only because it keeps trying to improve on the details of the idea and the way it puts it into practise. The name changed – from cadabra.com. The concept changed – from bookshop to trusted advisor and retail community. The product reviews, the wireless e-book reader, the free video previews, and its own search engine: All enhancements to the original idea that will never be perfect.  

In the real world, there are no ideas that conform absolutely to the description or definition of an ideal type. There are no ideas complete beyond practical or theoretical improvement. There are no ideas that exactly fit customer’s needs ever or forever. There are no ideas entirely without flaws, defects, or shortcomings. This is good news for anyone who wants to contribute and for any business that wants to grow.

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Truth 1: Innovation Is New Stuff That Is (Made) Useful

Innovation is new stuff that is useful. That’s just about the best definition. It clears up what’s interesting about innovation without overcomplicating. It also leads to the two questions that you should be asking next: Useful for who? How new is new?

Usefulness is in the eye of the user. If you have an idea for improving something but do nothing with it – then you have not invented or innovated. If you don’t share it you haven’t even helped anyone else to invent or innovate – the idea will die with you. If you share your idea then it becomes an insight. If you put your insight into practice, it becomes an invention. If your invention is useful to someone then the invention has become an innovation. If the innovation increases human happiness then perhaps we have made progress.

People invent solutions for themselves because they can’t find, can’t afford, or won’t buy, an off-the-shelf product that meets their need. The greater the need the greater the incentive to invent. People invent solutions for other people because they have recognised the need. Inventing useful things for people that they are willing to buy is the basis of commerce and economic prosperity.

Newness is also judged by the user. An idea you have never heard of is new to you. An idea your colleagues have never heard of or never used is new to your company. Two old ideas mixed together are new and may be new enough to be useful in different ways that are useful to someone. Even better, they may be useful enough to give you something you value in exchange. Swapping stuff that is accepted and perfected in one country but appears new and difficult to do in another country is the basis of international trade. Some of what we used to swap was raw materials that just happened to be in one country rather than another but increasingly what we swap is rich with ideas, insights, and innovation.

People may not want something to be completely new. An invention can be so new that it doesn’t fit into anyone’s life. They may reject an idea because it challenges their way of looking at the world. Or because it is simply too much work to change the way they have always worked. All innovations are new, however they vary in their degree of newness:·       

• Incremental innovation involves small steps, something that is a minor improvement to an existing solution. Small steps have taken Gillette from one razor blade, to two, three, and now five blades.  
• Radical innovations take big steps, creating major improvements that are often very different to existing solutions. Cloning ‘Dolly’ the sheep qualifies as a radical innovation – it was a first and it was certainly a breakthrough.
• Revolutions happen when groups of these innovations can together cause a huge, far-reaching impact. The computing revolution was achieved because of thousands of new technologies including the microprocessor, the telephone and the television. Globalisation, the Human Genome Project, and the Lunar Landing would not have been possible without it.

In reality, these innovations often rely on each other. Incremental steps lead to radical innovations that, taken together, lead to revolutions. Inventors take small steps without knowing what they will eventually make possible.

Deliberate attempts to take big steps can either fail or stall because other inventors have not yet taken the radical or incremental steps necessary. Leonardo Da Vinci designed plans for flying machines in the 13th century but these were not possible without advances in aerodynamic and manufacturing knowledge of the late 19th century. Armed with this knowledge, many inventors competed to make manned flight practical.  

They can also fail because the people trying to take the big steps are not aware of small inventions that they need. Philosopher-inventors designed telescopes in Ancient Greece but could not build them because they did not mix with the artisans who made the glass they needed.

Some innovations are dependent on other innovations or conditions. The electric light bulb is of no use without an electric light system including wiring, generators, power stations, and companies to maintain them. Other innovations are more independent, either because they are standalone or because the conditions for their success are already present. The first piece of sharpened flint qualifies as independent. Nearly all modern innovations are dependent on something else but not always on other innovations. Knowing what your idea relies on is vital to its success. 

The focus of the innovation also varies:

• Product innovations involve new products and new characteristics of old products. The process that makes them may be much the same but the product has changed incrementally or radically.
• Process innovation refers to new ways of doing something. The product may be the same but the way of producing is new, better, more efficient or more reliable. Computer-aided design and manufacture are process innovations.
• Organizational innovation finds new ways of structuring and managing people. The product and process may be the same but the way of organising people has changed. Bureaucracy, adhocracy, meritocracy are all ways of organizing.

These areas of focus are often interrelated. New ways of organising people can make it possible to produce new products and follow new processes. New products can require new processes. New processes make new products possible.

In all these ways of looking at innovation, the definition remains the same. It is new stuff considered useful by someone. It can be incremental, radical, or revolutionary. It can be dependent or independent. It can change products, services, processes, or organizations. In fact, it can change anything. Any belief. Any situation. Any nation. Any planet. Which is why understanding and getting better at innovation is vital to our shared future.

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Introducing the Truth About Innovation

Innovation rocks. It rolls. It makes the world go round. Our lifestyles are the result of other people’s efforts to improve the human condition. They mixed ideas and inventions together. They worked hard to create the must-have and often taken for granted stuff that surrounds us.

You have evolution to thank for your opposable thumbs and adorable belly button. And for your amazing brain, with more connections than stars in the galaxy, that has allowed millions and now billions of us to examine our world and seek to make it better. That is innovation and it matters.

Innovation is a fad. It’s a fashion. At least that’s what cynics will say after a few years talking about its importance. After the innovation boom will come the innovation bust. The smart companies will keep innovating and the wannabes will stop. Smart people know the difference between fashion and fact.

Our century’s greatest innovation will be the method of innovation. We are beginning to understand how to increase our ability to improve together. We are learning how to move from individual invention to group innovation.  

This blog shares some of what we have learned about innovation, what it is, how it happens, and how you can increase it. New insights into how our brains work collectively provide us with the opportunity to create the equivalent of a bigger brain, capable of dreaming and working together to make those dreams reality.