The Great Innovation Hi-jack: Part 2

By Alan Brew

What is the purpose of innovation? Does it have to be disruptive to be of any value?

Much has been written about Steve Jobs and his undoubted genius. If you are looking for the personification of both innovation and disruption Steve Jobs is your man.

Apple has disrupted entire industries – computers, movies, telecom, television. The iPhone effectively killed Nokia, Motorola and Blackberry and pushed AT&T, Verizon and Sprint into entirely different business models.  iTunes put Tower Records and Blockbuster out of business. The iPad has reshaped the news and movie industries.

And yet…think about what Steve Jobs actually did. He wasn’t so much of an innovator as a reinventor. He built on what was already there.

There were MP3 players before the iPod, smartphones before the iPhone, tablets before the iPad, laptops before the MacBook Air; Jobs even took the idea for the graphical interface from Intel and the mouse from Xerox PARC.

As the Economist put it: “Jobs was a revolutionary, he recognized opportunity where others failed. He thought about how people will use the products, not just what products they use.”

Jobs connected the dots between ideas and the available technologies to create something new and different. This idea of continuing reinvention, connecting things, building an ecosystem of content, the internet and devices, is the core of Apple’s continuing brand relevance.

Without relevance brands wither. They either become phantom brands like Kodak, Xerox, Westinghouse, Nokia and Yahoo!, or they just die and go on display at Museum of Failure along with the Palm Pilot, Classic Coke and the laser disk.

Innovation is not all about “big bangs.”

As Scott Anthony observes in his useful book, The Little Black Book of Innovation, pushing for big bangs often leads to overly risky ideas that have little hope of getting approved. True big bangs are rare.  The best way to do something big is to start small.

And, as Jill Lepore points out in the New Yorker, when the financial-services industry disruptively innovated with subprime mortgages, collateralized debt obligations, and mortgage-backed securities, it led to a global financial crisis.

She tells the story of TD Bank, which traces its roots to 1855. And how it forswore disruptive innovation to become one of the strongest banks in the world.

Since 2005, TD Bank has opened thirteen hundred branches in the United States, bought Commerce Bank for $8.5 billion in 2008, and adopted the motto “America’s Most Convenient Bank.” With the money it earned by expanding its traditional banking services it set about marketing itself as the bank with the longest hours, the best teller services, and free dog biscuits.

In similar vein Scott Anthony tells the story of a librarian working at CNN. Her job was generally reactive – if a reporter needed some reference material she found it. She wondered if there was a way of being more anticipatory, so she began assembling verified facts on important topics in the news and put them on the company intranet as “Fast Facts.”

This simple idea allowed journalists to verify facts quicker, allowing CNN to get stories on the air faster and win in its marketplace, and keep the CNN brand relevant. The added-value improvement freed up resources to pursue new opportunities and create growth.

In her breakthrough book The New Science of Radical Innovation, Dr. Sunnie Giles makes the case that innovation in business has to be systemic. It thrives in what she refers to as “psychologically safe organizations” in which people trust each other. Innovation becomes a serendipitous result of many self-organizing employees learning from trial and error and following a few simple rules.

According to our research conducted among B2B customers, they associate the following attributes from companies they regard as innovative:

  • Progressive (forward thinking)
  • Provide innovative recommendations that customers can use
  • Are ahead of the curve – they think ahead and anticipate where their customer’s business is going
  • Can lead me safely into the future – my trusted guide through change
  • Up-to-date with technology products and services
  • Nimble/innovative enough to be reasonably leading edge

None of these attributes involves or implies the need for bleeding edge technology or disruptive innovation. Being up-to-date with technology products and services is a basic requirement for doing business these days. Technology does not differentiate, it facilitates and within that facilitation is where innovation lurks.

In most firms, too much effort is spent on building brand preference and way too little on brand relevance. It is not really possible or wise to forget brand preference but, at the margin, companies should shift their culture, strategy, and resources to focus on brand relevance.

Think brand relevance, not innovation. It is the only way to achieve sustainable growth.