Thoughts on Innovation
I recently engaged in a discussion about innovation, which provoked me to share a few thoughts:
There is no single, “complete” definition of innovation in my view. With that said…
Innovation is situational. Improvement within a single product is innovative to that product’s users; it’s innovative in the market if no-one else has done it; and it’s table stakes once everyone has done it.
Innovation is for business value; otherwise it’s just an invention. As a VP of Development I worked with once expressed, “we’re not running a research project!”
I strongly believe that product managers lead business model innovation just as much as they do product innovation. Business model innovation tends to be disruptive by nature.
It’s my view that we are living in a golden age of product management; SaaS is disrupting all forms of enterprise software at the business model level, and introducing microproducts that slowly chip away at the enterprise platform of yesteryear.
Today we see a LOT of disruptive, business model innovation; dramatically more than when I first took a product analyst role in 2007. (Is the escalation thereof the reason why the product management function has exploded? Is this trend itself sustainable?)
Companies that have progressed beyond startup stage have to manage innovation. McKinsey captured this in the Alchemy of Growth with its Three Horizons model–core products; new and emerging; long term opportunities, r&d and discovery initiatives. Enterprises need to devote some percentage of investment to “horizon 3” initiatives (r&d / discovery) or they’ll end up with a portfolio full of stagnant cash cows. I believe product and business model innovation are found in horizon 3.
There can be incremental innovations to existing products / services which serve to sustain that product/service (Christensen’s “sustaining innovation”) as well as the more profound, disruptive innovation (“horizon 3”) that we all know and love.
An important undercurrent here is that in the 21st century, M&A has effectively taken over horizon 3; startups innovate, and the successful ones are scooped up once an enterprise can see how to incorporate that innovative solution without damaging the quarterly results presented to Wall Street. Steve Blank touched on this earlier this year from a different angle – given that horizon 3 type innovations no longer take years to research and develop; he argues the concept is invalidated - as enterprises are often overcome by startups that simply fly past.
With that – what are your thoughts?
Photos via Pixabay: 1 2 3