The term innovation is thrown around way to often for my person liking. It seems like everyone is touting how their process is innovative, or how they can make your business more innovative. At Awecomm we’re even guilty of throwing around the term in our offerings occasionally. Unfortunately, this over-use of the term leads to a ton of confusion. Especially for those of us trying to define what an innovation strategy even means for our business. The fact is, innovation comes in multiple flavors, and the path you chose can have some long term implications.
Gut check time. When you think of innovation do you think of something that is disruptive, breakthrough, maybe new and exciting? Or do you think small incremental changes? I know when we started Awecomm in 1999 it was most definitely the former. We were guilty of being drawn into the constant media and hype of transformational start-ups (pre dot com bust of course). It’s understandable, innovation under that lens sounds exciting. It conjures up images of billion dollar IPO’s and investors falling over each other to finance corporate jets and lavish “business” parties. The truth is, it’s sexy. Who wouldn’t want that? I mean when you start a business you see success, you envision your utopia, and a breakthrough product or service that can redefine your industry is exactly what would get you there. Right?
The problem is; it’s not that friggin easy. Innovation resembling that of the unicorn companies is statistically, nearly impossible to achieve. Yet for some reason; maybe it’s our competitive nature, we still believe breakthrough innovation is the path to success. Well here’s some tough love we’ve learned; breakthrough innovation is not the path to success for most businesses. Breakthrough products and services can be a component, but it most definitely comes later. First you need to create a system of iterative innovation.
Iterative innovations are small, digestible advancements that keep notching you forward. They are not necessarily exciting, but they are unquestionably powerful. It starts with defining what makes us who we are as a business. These differences are mapped out into processes that identify every component and every procedure necessary to deliver them to the market. The innovation comes from ferociously examining every step in these processes to identify and prioritize small changes necessary to make them better. The approach translates into our products, services, delivery mechanisms, customer engagement, and business models. The iterations, over time, are focused on increasing profit margin (read operational efficiencies), and creating differentiation (read product advancements). Iterative innovation is all about understanding what we do, how we do it, and then constantly evaluating how we “should” do it. It is a much more controlled, consistent, and risk adverse method to advance what we deliver to our customers.
It is only when we have this system in place that we can inject breakthrough innovation into the mix. The ability to execute on these iterations actually prepares us to roll-out significant, disruptive changes. As Scott Anthony from Harvard Business Review so eloquently states. “Iteration and Innovation are friends, not foes”. He is right, and I would even argue, iteration is the enabler of success, breakthrough innovation is just adding a little gasoline to the fire.