2 Good Pieces on Innovation

Booz Allen Hamilton's Strategy & Business Magazine had a good recent article that discussed an alternative perspective on Christensen's idea of Disruptive Innovation. One of the fundamentals of a Disruptive Innovation is the idea that it's typically "worse" in some ways than existing products. In his recent article, Carr argues that there can also be Top-Down Disruptive Innovations which outperform existing products:

But in its single-minded focus on bottom-up disruptions, the model is also potentially dangerous. It may lead managers to overlook a very different sort of disruption — one that emerges not at the bottom of the market but at the top.

Another good report I recently came across comes from BCG. This report covers many of the innovation issues that I've touched on in the past- including some good thoughts around the required culture and organizational elements of innovation. There is also some interesting survey data regarding innovation spending and companies admired for innovation.

A Week in the Past - the Pace of Innovation

Today I'd like to discuss a story I've heard a few times that's related to the impact of Innovation. It's about a school project where students and their families had to spend one week living the way people lived in a year of their choosing. I'm not sure if this was an actual school project or a fictional story to illustrate a point. If someone knows or can find references to the story, please comment on this post.

The way I've heard the story is that one of the students chose a year around 1984. Many people's initial reaction to hearing of the year chosen is that of surprise. When hearing about the assignment they expect that for this to be an interesting exercise, you would need a much earlier era or a year of notable historical impact- such as a year during the Great Depression (1929 - 1939) or one of the gold rush periods (1849, 1886), for example. The frequent question is something along the lines of: "1984- So what's the big deal?"

And that's when it gets interesting. Because when you think about just going back 20 or so years and all that you'd have to give up, you realize the tremendous number of luxuries and life-changing innovations you've grown to rely on. I've made a short list here of just a few of the innovations with which the student had a hard time convincing his family to part:

1. Cell Phone
2. The Internet
3. CDs/ DVDs (CDs were invented just a little earlier, but were just beginning to get distributed. DVDs weren't invented until 1995)
4. PDAs
5. Tivo
6. Ipod
7. Automatic Toll Paying Devices (EasyPass or Ipass devices)
8. Starbucks

Even over just 20 years, the impact of innovation on our daily lives has been enormous.

Firefox- Disruptive or Sustaining Innovation?

Here's a good post by Frank Hecker on evaluating whether or not Firefox is a disruptive technology or innovation as defined in the Innovator's Dilemma and the Innovator's Solution. These books both provide an excellent theoretical foundation for thinking about innovation. The post and its associated links are a great introduction to the ideas of disruptive and sustaining innovations. (This wikipedia article also provides a very good definition and can serve as another great introduction to the idea of a disruptive innovation.) Additionally, Hecker's post does a very good job analyzing the relevant elements of the browser market to draw solid conclusions.

Given Microsoft's recent announcements- the above article is quite timely. This BBC article talks about Microsoft's announcement to integrate RSS support into the next version of IE- with a mention that Firefox already has it. Without specific numbers there's also a comment that Firefox has been "gnawing away at IE's market dominance." This came a few weeks after Microsoft announced adding tabbed browsing to the upcoming release as well as making it available via a toolbar for current IE. Tabbed browsing was another big feature on which Microsoft followed Firefox's lead.

Innovation Culture- Google vs Yahoo

Here's an interesting article that addresses the topic of optimal culture for innovation with a comparison between culture at Google and Yahoo! The article raises some good points between the different way the two firms encourage innovation-- basically saying that it's assumed at Google and that Yahoo! needs to encourage it. While probably a bit of an oversimplification, it's an interesting point. I think a cursory analysis of the situation could potentially lead managers astray. I probably read a little too much into the article, but I couldn't help but come away with the sense that the author felt there was an inherent superiority to Google's method. The problem this can lead to is overlooking that the appropriate innovation program for a firm is completely dependent on the current situation at that firm. In other words, if- for whatever reason- a firm needs to encourage innovation or ideation it would be very difficult to jump to the type of culture at Google, and Yahoo's steps might be much more appropriate.

Cultural Elements of Innovation

I think it's very important to pay at least as much attention to the cultural and organizational changes required for a successful innovation program as it is on developing a pipeline of ideas. Here is a link to a short article that emphasizes the change management elements of innovating. The article misses a big piece of the puzzle by not mentioning goals but is still a good introduction.

Most goal focused managers are much more likely to focus on the strategies and tactics that helped them achieve last year's numbers as opposed to developing new methods for achieving goals two or three years in the future. Especially when you factor in the much greater likelihood of new ideas failing, it's easy to see why managers are not focused on innovating. The techniques mentioned in the article can definitely help form a foundation, but without changing goals to explicitly include innovation- and the acknowledgement that short term results are not expected from these efforts- it's difficult to change direction.

Cell Phone Entertainment - Mobisodes

Wireless carriers pushing to generate returns on their 3G investments have been partnering with media/ entertainment players throughout the value chain. Carriers are offering phone based entertainment including everything from movie trailers and additional scenes from existing television shows to mobile only series shows- some that even include the ability for viewers to choose the direction of the show. This article highlights some of the more popular and interesting entertainment options already available.

Google Potentially Moves into Payments Space
This Reuters article describes how Google might be planning to offer a Google Wallet. Google is one of the best innovators in the online space and this would be an interesting development for a few reasons. Most of the news analysis focuses on how a Google Wallet would compete against PayPal which is owned by eBay- one of Google's largest advertisers. Google's CEO has said that Google only offers services or products in a market with entrenched competitors when Google can offer a significantly enhanced value proposition. It will be interesting to see how Google can improve on PayPal's model. Yahoo and even eBay (prior to buying PayPayl) have both tried to unsuccessfully compete against PayPal.