I remember delivering a short talk on innovation to a predominantly business group earlier this year. The event had been organised by a public sector economic development agency and many of their senior people were also in attendance. As part of my talk, I mentioned a family-owned food company that had experienced dramatic growth in sales and profits as a result of what I described as “an innovation”. The company in question was eventually sold to an international food group for a very attractive premium, making the family involved very happy indeed. No-one connected with the business was in any doubt that the key factor for this sale was the aforementioned innovation.
What was interesting for me was that, after the talk, I was chatting with one of the development agency’s more senior attendees and he challenged that the “innovation” I had described was indeed a genuine innovation. Indeed, he literally described the success as “cheating”. To be clear, the story related to the company in question taking an existing product and completely overhauling the branding – the name, the packaging, the positioning, and the story. The result was a product that not only stood out very clearly from the competition on the supermarket shelves but also a product that was seen by consumers as being meaningfully unique to them (as attested by the dramatic improvement in demand and margin achieved).
What seemed to bother the person I chatted to was that nothing about the product or the process to make it had changed. The inference was that if this was an innovation it was a marketing innovation only. Clearly, in the eyes of this individual, innovation can only be about technology – product and/or process. Anyway, we very amicably agreed to disagree.
A few weeks later I was in a meeting with another group which also happened to include some senior executives from a different economic development agency. One of these executives was responsible for overseeing a very large grant scheme to support R&D amongst businesses in their region. During a break in the meeting, I asked this lady about the biggest problem she faced in allocating these sizeable grants. Without hesitation, she said, “…discovering too late that there is no market for the ideas being developed”.
I later reflected on the irony that is obvious when putting these two stories together. To be clear, as far as we are concerned an innovation is something that is clearly meaningfully unique in the eyes of the customer – external or internal. What makes a difference to that customer is that they perceive that your product or service will provide a benefit, solve a problem, or make them happy in a way that they are currently unable to easily access any other way. We think more innovation effort will be better rewarded when the customer is put firmly at the heart of the process from the outset – technology or no technology.