INNOBLOG

People typically associate innovation with the introduction of a sexy new product or service. While this kind of innovation gets the headlines, innovative ideas applied to everyday problems can have just as much business impact.

Consider a recent Wall Street Journal article describing how top fashion companies like Gucci and Burberry are working hard to better manage their supply chain. One critical problem: replacing dud collections before retailers grow antsy. Burberry has spent more than $100 million to improve its ability to ensure that the right products get to the right stores at the right time.

These challenges of course require a fair amount of blocking and tackling, but there's also ample room for fresh, innovative thinking. And think of the top- and bottom-line impact of finding better, cheaper, and faster ways to get products into stores more quickly.

Innovation should matter to you if your job doesn't involve strategy or product development. ...

Read the rest on Scott's Harvard Management blog, Innovation Insights.

Companies just starting innovation efforts often begin by getting a group of people together and telling them "It's innovation time!" I've never seen efforts like this succeed in meaningful ways.

Instead, we suggest that companies begin innovation efforts by creating an innovation strategy that details clear targets and tactics.

Clear targets help internal innovators know what they're shooting for. A reasonable starting place is to imagine what success looks like five years in the future. Are you seeking to double your business? Hold it steady? Something else? Setting a target that is several years in the future can help to de-politicize a potentially charged discussion.

Then think about the sources of growth. How much can you reasonably expect your core business to contribute? In some industries your five-year contribution might be below today's contribution, and that's okay.

Next, look at what's already in your development pipeline. What can you reasonably expect that pipeline to contribute in the future? One tip here: make sure to risk-adjust your pipeline. If you assume all of your projects will succeed, you are being wildly optimistic....

Read the rest at Scott's Harvard Management blog, Innovation Insights.

How do you sell more computers to more people when almost all of us already own one? Recent and ongoing innovations in the computer industry provide a fascinating answer to that question: rethink the idea of nonconsumption.

In The Innovator’s Guide to Growth, Scott Anthony, Mark Johnson, Joe Sinfield, and Elizabeth Altman describe a presentation for a major cable broadcasting company during which an audience member said of nonconsumption, “More than 90 percent of U.S. households subscribe to cable television. I don’t see how this concept applies to us.” The speaker replied, “How frequently do people watch your programs when they aren’t sitting at home in front of their television?” Instead of conceiving of consumption narrowly and focusing on bringing cable TV to more houses, the authors suggest, the company might consider offering video in new contexts such as PCs or mobile phones.

In other words, considering consumption in terms of people (am I a consumer or not?) can be much less informative than considering it in terms of contexts (are there circumstances in which I could be consuming but am not?).

Although the vast majority of people in the developed world own (or at least have access to) a personal computer, there is still a great deal of nonconsumption in the computing space. Until fairly recently we were all nonconsumers of computers and Internet access in places like airport terminals, taxis, and sidewalks. Innovations expanded consumption: smartphones and netbooks are making the Internet and productivity applications available not necessarily to new consumers of computers or new segments of the computer market but rather are making them available in new contexts.

A nascent project may soon expand consumption to public spaces and group settings in which computer use (a generally solitary activity) rarely occurs today. Microsoft’s Surface project was famously mocked when it first became public, but now the – ahem – tables have turned as the massive touchscreens are being introduced as part of a pilot program in Sheraton hotels in five cities.

It is easy to imagine an enormous variety of other applications: Surface computers installed as interactive product displays in retail outlets; as automated ordering devices in tables at restaurants; as game-playing and Internet-accessing time-passers in transit stations; as board games, message centers, and media consoles in homes… Some of these ideas may turn out to be optimistic or unrealistic, but broadly speaking Microsoft is on the right track as it prepares a device designed to bring interactive computing to nonconsuming contexts.

These and other products are strong evidence of both established manufacturers’ and new entrants’ willingness to explore and tap into the circumstances in which computers are not yet being used. This understanding – that nonconsumption is contextual and highly relevant even in markets that appear to be saturated – should continue to lead to robust growth in the computer industry.

The recently christened “netbook” market has exploded over the past year as new entrants and established computer manufacturers have released a bevy of new, inexpensive products into the disruptive category.

Netbooks, relatively small and very inexpensive notebook computers designed primarily for mobile Internet connectivity and useful for little more than browsing, e-mail, and running productivity software, fit nicely in a niche for consumers who have been simultaneously overserved by traditional laptops and underserved by high-end smartphones.

If this niche seems familiar, it should. Manufacturers have struggled to shoehorn attractive products into this niche for years, but until recently they tended to be unwilling to aim low enough on features or on prices.

Some have sought to fill that gap by focusing primarily on size and producing ultra-slim laptops with feature sets (and price points) comparable to those of larger computers. Lenovo’s X Series and the $1799 MacBook Air, for instance, actually charge a hefty premium for providing features similar to those of a midsize laptop in a more portable package.

Microsoft, on the other hand, was more willing to limit features and provide a “good-enough” product when it developed its “Ultra-Mobile PC” platform (known as Origami), but Origami-powered devices failed to catch on as high prices (not to mention horrific usability problems) turned potential customers away.

Netbooks, however, seem more attractively positioned than these products, and they have great potential to disrupt the laptop industry. Consider, for example, Acer’s new Aspire One, now widely available for $379. It’s hopelessly outgunned by pricier laptops: its screen is small, it runs Linux instead of Windows, it comes with relatively little RAM, its processor is slow, and its solid state drive is Lilliputian.

But those shortcomings aren’t terribly important to consumers when their goals are simply portability, connectivity, and productivity at a low price; an ultra-portable that can run Crysis is ludicrously overwrought in comparison.

It seems very likely to me that there's much more expansion in store for this segment of the computing market as manufacturers introduce still more products, the cost of computing power continues to decline, and consumer awareness of these options grows.  I'll be curiously watching as the low-end disruption develops.

Earlier this year on InnoBlog, Natalie Painchaud discussed the ASUS Eee Surf's potential to be used as a second computer for families.

Innovation inspiration can come from outside the business world. Today's source of wisdom: The Simpsons. Today's lesson: Be wary of peddlers offering skin-deep fixes for deeply rooted innovation issues.

Companies looking to boost their abilities to innovate routinely turn to companies that seem to have solved the innovation equation for inspiration. They observe elements of the company's environment (free food! no doors! online jam sessions!). They seek to mimic those environmental elements to get similar results.

The problem is that a "culture of innovation" involves much more than these superficial elements. In fact, my colleague Steve Wunker is fond of saying that culture is a lagging, not a leading indicator. Changing culture requires changing activities. Changing superficial stuff without changing the real stuff doesn't accomplish much.

If you have trouble remembering this, think back to the episode of The Simpsons when, after a random bear sighting, the town of Springfield invests heavily to guard against future "attacks." The town thinks the heavy investment pays off, because bear sightings drop by 100 percent.

Read the rest at Scott's Harvard Management blog, Innovation Insights.