Innovation and change

What is an innovation? And what is a change in business? Is it a change if prices go up and then down (discount sale)? Under what circumstances would the customers see price changes as something new, as an innovation? How small a change can be to count as novel?

The answers depend on the specifics of the market situation and customer perception. On the other hand, if nothing changes, the market most likely will not observe novelty or innovation.

We’ll rely on definition bin dissertation by Robert van der Have, “Seeking Speed: Managing the Search for Knowledge Innovate Faster”

These [innovation] activities span from the creation and development
of new knowledge into an invention, and the process of its subsequent further
commercial development, including application toward specific objectives,
culminating in its practical utilization and economic/commercial exploitation.

Ideas are not innovations. Rather “an innovation is a new product, service or process that is commercially exploited.” This leaves open the question of incremental innovation, i.e. new product variants or service improvements. For the sake of this discussion innovation and change are considered the same. Thus, an innovation is a completely or partially new product or service that is commercially exploited. This leaves out failed innovations, i.e. ideas that may have been implemented inside a company but were either discarded before commercial launch or ended up as market failures. These need to be taken into account in discussing innovation.

Our interest is in concrete innovation practices, how to effectively develop and deploy new and improved products. At times a sequence of such changes is so profound that the product is actually a completely new innovation. New radical changes are somewhat outside our scope as that is closer to science and research, and as such subject to different mechanisms.

Blue bubbles represent products and services as seen by the customers. Small blue dots represent relevant features of the products. Highlight is used to illustrate how features and products are connected. Please note that there are mutual synergies between products. Naive illustration is a pizza, fork and knife where fork and knife are separate products, both essential and more useful together than one at a time. The author realizes that utensils are often sold together as a unit and begs for forgiveness on this silly illustration.

Orange bubbles, dots and areas represent companies’ view. Orange bubbles represent products, SKUs in concrete terms, and the small dots their components, features, inventions, manufacturing, delivery, service and other aspects that make the product complete. Competitive differentiation lies in these aspects and how they are packaged together as an offering.

Details matter, implementation counts, only products that have been delivered matter. To get from ideas to products to revenue and profit ideas need to be turned into innovations and delivered to customers. That is the interest and we’ll return to that in the next part. As soon as we are done procrastinating.

Published by Aarne

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