Can Innovation Ever Be Bad?
10 Comments Latest comment by: Paul
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I recently read a nice article by Geoffrey Moore titled "Top 10 Innovation Myths" after finding the link in Tyner Blain's blog.
Moore Says "No" to Innovation?!
One of Moore's points specifically caught my eye:
Myth-3. "It is good to innovate"
No, it is good to differentiate on an attribute that drives customer preference during buying decisions. Innovating elsewhere costs money and entails risk but does not create competitive advantage.
Reason it caught my eye? I had lunch with a friend of mine yesterday, he's a Product Manager at a medium sized software company in the valley. He was recounting a recent incidence at his company.
Their engineers wanted to do a project - which upon review by the Product Management team (standard practice at their company) was voted down. This caused the person who originally proposed the project to get a little bit mad and claim that they were killing innovation at their company.
Killing Innovation - Good or Bad?
When you vote down a project that has low/no commercial potential, are you killing innovation?
Technically speaking - yes, you're killing innovation. Is this good or bad then?
In my opinion, it is good to kill innovation that has no commercial potential. How so? I think, in most cases (though not 100% of the cases) it is fair to draw a conclusion that lack of commercial value means lack of real value created for customers.
Adding Customer Value via Innovation is Good
Innovation is only good when it creates real value for customers, especially value that they recognize and will pay for. When it does, odds are quite high that it will also be a commercial success. Even better when it also results in sustainable competitive differentiation.
Or as Moore says: "...it is good to differentiate on an attribute that drives customer preference during buying decisions. Innovating elsewhere costs money and entails risk but does not create competitive advantage"
Till next time...
About the Author: I'm your author, Michael Shrivathsan, an expert in product management and product marketing with successful experience spanning two decades. I live in Silicon Valley, USA. For my day job, I manage the product management group at an exciting software startup.
Comments
You know what the engineers will say, right: "How do product managers know which idea has commercial value and which doesn't?"
Since PM's cannot prove it beyond doubt, engineers will choose to never believe PM's! That is the recurring story. Don't you think?
Posted by: Josh Thomson | February 28, 2006 09:32 PM
Thanks for the link to Geoff Moore article. It was very useful.
Posted by: Dongbin | February 28, 2006 10:41 PM
"Can innovation ever be bad?" - this is very thought provoking question. Most organizations will feel innovation is always good. Yet, many times innovations risk too much resources and provide too little return. Innovation should be market-driven, not technology-driven. Innovations shall also aim to give huge benefits to clients. Then innovation is useful and contribute to success of organizations.
Posted by: Raj Pandi | March 1, 2006 02:18 AM
Hey Michael, thanks for the link to our blog! I was explaining how innovation can be bad today to a non-technical manager with the following baseball analogy:
In a large corporation, business is day-in-day-out about hitting a bunch of singles and the occasional double. You win the game through consistent execution of low risk plays.
One of your players suddenly starts hitting the ball 500' every time. Do you discourage him?
Yes, if every hit is a foul ball.
Innovation that doesn't differentiate you is a foul ball.
Posted by: Scott Sehlhorst | March 1, 2006 08:43 PM
Hey Scott,
That is an excellent anology. As a big baseball fan, I can certainly relate to that.
- Michael
Posted by: Michael | March 1, 2006 10:36 PM
Josh,
That is an interesting point - albeit a bit cynical! It is indeed hard to prove beyond any doubt.
Posted by: Michael | March 1, 2006 10:39 PM
However, think about the morale value - this is value to your employees. If you want your employees to be in top shape and hit the homers that really matter, you might want to let them take the foul balls even if you judge that it isn't adding value.
Posted by: anon | March 6, 2006 01:41 PM
This is an OK rule of thumb, as long as it is not applied absolutely. Many of today's greatest companies were started by engineers who left their previous employers because the innovation they proposed was not seen as commercially valuable. Since you can never be 100% sure (as a marketer, it pains me to say that), some times you have to take a leap a faith.
Some (many, most) small innovations don't provide obvious short term differentiation, but they can add up to long term advantages of quality, design, completeness, superior utility, etc.
So, my take on this is business managers must use their judgment. Some times they'll be wrong. Some times they'll be right. But 100% application of any rule like this will almost always be wrong, much as I respect Geoffrey Moore.
Posted by: Paul | April 28, 2006 07:57 AM
Paul, I agree with you that 100% application of any rule is not good. I think many companies seek to innovate in areas where they can't create meaningful differentiation any time soon. Because of that this is a good rule to follow, that is, always seek to innovate in areas where you can create differentiation that influences customer purchase. I agree with you that this comes down to business judgment.
Posted by: Josh Thomson | April 28, 2006 12:39 PM
Josh:
My fear is that people who need to live by rules like this are exactly the ones least qualified to use their judgment. On the other hand, I also agree with your point that too many companies don't understand the concept of relevant innovation (i.e. expands utility, fits with brand identity, is something customers want, improves differentiation). In that case, they are probably best to stick with the rules, to minimize operational cost. It is better to be a profitable follower than to pretend you're something you're not.
Posted by: Paul | April 29, 2006 06:08 AM