Defining Innovation

By Ty Hagler

What is innovation? Perhaps just as importantly, what isn’t innovation?  As an innovation consultant, I’ve heard several limiting definitions, particularly in the product development space.  But for me, it’s a pretty expansive term.

First, we need to understand that innovation isn’t merely some starting point or some particular new thing—be it a product, service, or business model. I like to think that, since the innovation space is an ecosystem that involves lots of people and companies with diverse backgrounds and perspectives, the concept takes in all three of these areas—products, services, and business models—in its expression within the commercial universe.

Since none of us pursues innovation for its own sake, we must contextualize discussion of this concept within the confines of the marketplace. That’s a long way of saying that the ultimate benchmark of innovation is commercial success.  This criterion is what separates invention from innovation.  Yes, innovation has to be new, whether it’s something completely new or a revision of a former product, service, or business model.  But nobody cares about the “failed new,” rather, we celebrate those new things that bring success.

Some like to think of innovation as a specific event that occurs at the stage of identifying opportunities through talking with customers.  Within this narrow definition (and narrow is often good), the thinking is that innovation can only occur when a product or service concept emerges in response to the identification of problems faced by the end-user.  While this is certainly a valuable activity that enhances the process of innovation, it leaves me unsatisfied with what I see downstream from this stage of development.

In a previous Tangents post, we cited an academic research study, “Does Customer Interaction Enhance New Product Success,” that provides a statistical correlation between robust customer research and the market success of an innovation effort.  Customer research is important at multiple stages of developing a product, in addition to the opportunity identification stage.  While highly important to the innovation team’s success, it would be a mistake to think that customer research is the total scope of innovation.

Many people must perform great work to achieve commercial success for new products and services. These people include sales, marketing, engineering, design, executive leadership, manufacturing, and external vendors and partnerships.  When these teams convene for ideation sessions focused around discovery, refinement, and implementation stages, they accelerate the  process of innovation. Each team member brings his or her respective expertise to bear on the problems being faced and effective solutions can be proposed.  If innovation were easy, everyone would do it . . . effectively.    

You can see this in how companies need to restructure their sales and customer service teams to meet demands created by new products and services.  And you can also see that when companies get a taste for innovation that’s successful, it changes the entire culture of the organization.  While many organizations have only change as a constant, companies that embrace innovation and see success from it will see positive change as a constant, as opposed to change for reactionary reasons. There’s a big difference between defining the market and being behind the curve.

Evaluating Your New Product Idea

By Ty Hagler

One of my favorite conversations starts with the statement, ‘So I’ve got this idea.’ As an innovation consultant and industrial designer by training, these words spark an engaging discussion that gives me a chance to not only share my expertise, but also to learn something new about my field. When someone forms an idea for a new product, there is a tangible thrill and excitement that I find infectious, and I always welcome the discussion.

Having recently spoken with several inventors, pre-funded start-up ventures, and generally creative people, it has struck me that many of the conversations start with a request for validation of their ideas, but ends up with a discussion of process. The discipline of industrial design teaches that the first iteration of an idea is rarely the best idea. 

This concept may seem counter-intuitive, but the merits of an idea depend on the customer’s problem the idea is trying to solve:

• Is this problem a real point of pain or frustration for a segment of the population? 
• How large is that population segment?
• Is the pain or frustration strong enough that people are willing to purchase a solution?
• What is the process that customers follow to seek out a solution to this problem?

Answering these questions is a critical part of the due diligence that will be required of any investment in your idea, whether you’re pursuing a license deal or full commercialization. A number of research tools help us find the answers to these questions, including customer mapping and concept validation studies. Ultimately, these tools all fall back on the overall concept of Kenichi Ohmae’s 3C Model—the corporation, the customer, and the competitors.

While the aforementioned questions address the customer aspect of the 3C Model, people with ideas must also examine their competitive landscape. When we engage in this type of work, the odds are highly likely that someone else has observed this problem and launched his own solution. How many competitor or substitute solutions currently exist to address that same pain point?  It certainly makes sense to know what the patent landscape looks like for your particular domain.

In my conversations with investors, be they venture capital firms, angels, or otherwise, I find that their initial focus is on “who” versus “what.” That is, investors focus their first-pass screening criteria on the corporation aspect of the 3C Analysis, because this typically overlooked by start-ups. Investors are just as interested in placing their bets behind a talented leadership team that is committed to their vision as they are in the details of a specific business opportunity. Launching a product takes an enormous amount of energy, and, to be successful, it ultimately takes a team of tireless, talented people. Of the many decisions you face when pursuing your idea, your ability and willingness to organize a team around your vision should have the greatest impact on the decision to license or commercialize.

As you evaluate how to best develop your idea, you should assess your capabilities at the very beginning of the process.  Full commercialization takes a lot of fortitude, determination, and the ability to recruit the right mix of talent to clear the initial hurdles, whereas inventors who want to stick to what they do best—inventing—may choose the patent-and-license route. Regardless of the path you choose to follow, the process of bringing an idea to life is a skill to be developed and you will find there is a whole ecosystem to support you in your creative contributions to the economy.