Friday, May 14, 2010

Why does Geoffrey Moore say, “Being innovative is not the goal”?

I sell innovativeness. In fact, I promise my customers that I can help them become more innovative. And hence, when Geoffrey Moore says, “Being innovative is not the goal”, I want to know why?

Geoffrey Moore is a venture partner at Mohr Davidow Ventures, Menlo Park, California and author of bestsellers like Crossing the chasm, Inside the tornado and Dealing with Darwin. Geoffrey was interviewed at in 2007 and asked a question, “How should companies be trying to become more innovative?” Geoffrey began by saying, “Innovation is a neutral substance. Being more innovative is not necessarily the goal. The goal is to be more effective in economic competition. You want to achieve competitive advantage. In order to do that you need to differentiate yourself from your competitors. And in order to do that you need to innovate. So innovation that does not lead to differentiation from competitors does not get repaid as much

What Geoffrey is saying is that innovation is a means to an end. That end is to do better than competition in an economic scenario. So let’s ask this question, “Under what circumstances, I may become more innovative and yet not enough to beat competition?” Let’s look at two such scenarios:

· No sixer: I have seen organizations whose innovation programs are several years old. Thousands of ideas are generated and several of them are implemented. But there is only one catch – all the ideas are incremental in nature. They haven’t had a sixer and in fact, there is nothing in the pipeline which can potentially be a sixer. If you take a parameter like “idea per person” the organization may claim “innovativeness” but such “innovativeness” is not good enough. In the innovation dashboard I presented earlier, such a situation will result in a poor “portfolio”.

· Inefficient innovation: We have seen earlier the story of an innovative company – Lego that forgot the cost of innovation. In 2003, Lego was churning out new products but at what cost? The company designers were dreaming up new toys without factoring in the price of materials or the costs of production. For example, a pirate kit included eight pirates with 10 types of legs in different attire and positions. Lego group had 11,000 suppliers, nearly twice as many suppliers as Boeing uses to build its aircrafts. Lego was certainly trying to be innovative but not being competitive. In the innovation dashboard, such a situation will result in poor “success rate” when success is measured in terms of profitability of the new products.

What can we do so that we don't forget the end-goal? We devise a strategy – a broad approach to “where to play? And how to win?” And I feel it should be an important element of your innovation ecosystem. And not losing sight of the ultimate goal matters.

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