It is widely and wildly believed that innovation is a very important competitive factor for a company to succeed. In this blog post I will explain different types of innovations and also explain how innovation has changed or evolved to be a more collaborative effort.
Innovation can happen in the following ways
- Innovation in product
- Innovation in service
- Innovation in market place
- Innovation in skills
Innovation in product can obviously defined as coming up with a new product. The less obvious definition is to take an existing product to a whole new level. While the former has many examples the latter also has few notable examples. The most important in this area is iPhone. Apple Inc did not invent cell phone but it took cell phones to a new level. Their expertise in this area has helped them have a huge market share compared to their competitors. This has forced their competitors to compete at new level rather than staying where they were. Now-a-days it is very rare to see a cell phone without touch screen. While there were many early cell phone manufacturers that had touch screen mobiles, it is because of Apple Inc that this became an obvious feature on modern cell phones.
Innovation in service can obviously defined new ways in which a company can provide the same service to its customers. For example the retail business serve their customers via E-Commerce, Stores and Catalog. It is very rare to think of retail business without E-Commerce channel. While this is a good a example in which innovation seems to be straight forward, let us look at another example in which innovation is not straight forward. Let us say a salon wants to innovate their service. You cannot provide virtual haircut over internet to customers and charge real money. The way innovation in service can happen here is around the core service. The salon can provide options for customers to schedule appointment on internet to minimize their wait time. The salon can provide virtual haircut choices for the user to select and try them virtually on their website.
Companies need to innovate services provided to its external and internal customers.
Innovation in market place is my favourite theme these days to talk about. Innovation is market place is really connecting consumers with other parties. The best examples are app stores for mobile phones. This connects developers or companies and consumers. One the first look the app stores can be overlooked as just shopping for apps. It is really shopping for service in most of the cases. If users are buying games, music and movies then they are not just buying apps they are buying an entertainment service. If someone is buying college books from app store they are buying an educational service. It is better to look at such market places and find out what service is missing and add them. The other market place example I quote is Facebook. It is a powerful market place. Companies are pouring their money on Facebook advertisement because they can directly connect to consumers. Facebook market place may look just like an advertisement board for the company on the first look but it is really providing lot more services to the companies. Companies use Facebook as a channel to receive customer complaints and address those complaints via Facebook. This combines the powerful hi-tech and hi-touch model of customer service. There are other online market places similar to Facebook but serving unique set of customers. For example LinkedIn.com is one such channel servicing professionals. One of the ideas I have been contemplating is how to create a market place for public to get all related government services in one place. I still see in developed countries people going to social security office or DMV for various services. Sometimes public has to go to multiple office to get some documents.
Innovators require both will and skill
Innovation in skills is often the neglected area in innovation. Innovators don’t just require will they also requires skill in some specialized areas. This is where I feel MOOC can play an important role. In addition to offering regular college courses online MOOC are offering specialized courses that can be the fuel to the innovation. While MOOC is a notable innovation in educational service area, MOOC itself requires innovation in the way it offers it courses and track the benefits of the course.
Now that I have explained various innovation types, I would like to touch upon the topic of how innovation itself has changed over the last few centuries. Before the industrial revolution, innovation was happening in certain families or group of families in a society. For example the Blacksmith families in the society were mostly responsible for key innovations in the metal based manufacturing products. Carpenter families in the society were mostly responsible for key innovations in wooden products. Not only innovations in products but also innovations in services were contributed by some families in the society. Before the advent of modern medical institutions, maternal services were provided by families who specialized in those services for centuries. Medical services like surgery and therapy were offered by a section of society who specialized in those areas for centuries.
Close to the dawn of industrial revolution individual inventors contributed significantly to the society by developing new products for the needs of people and business. Few example for this are Edison, James Watt, Thomas Newcomen and other popular scientists like Einstein, Rutherford. By the dawn of industrial revolution the innovation shifted from individuals to enterprises. The big enterprises invested money in research and development and developed significant new products and services. Now innovation is a collaborative effort between enterprise, universities, government and consumers. Few of the notable examples are innovations that were used in military once like GPS, Wireless phones are now used by consumers for their daily use. These innovations are output of collaborative effort of government, university, enterprises and consumers.
Hope this post ignites innovation in your personal and professional life.
Credits and References
Innovation and Entrepreneurship – by Peter F Drucker
Economics The Users’s Guide – by Ha-Joon Chang