Call me unobservant, but I’ve only recently noticed the Influencer Posts section on LinkedIn. Still, I’m grateful to have found it because through a posting by Gijs van Wulfen entitled "Innovation is Not Paying Off", I found myself looking at something called an Innovation Survey by Accenture.
The survey of 500 executives, entitled "Why ‘Low Risk’ Innovation Is Costly", found that 18% rated innovation as their top strategic priority and 70% placed it among their top five priorities. As many as 93% regarded their company’s long-term success as dependent on its ability to innovate but only 18% believed their innovation strategy was delivering a competitive advantage. For many (64%), the policy they were pursuing wasn’t innovation but "renovation", which Accenture defined as "more limited, incremental line extensions".
Accenture identified renovation and "the invention trap" (the over-reliance on the invention and "an inability to bring brilliant ideas to scale supported by a robust business model") as the two dominant obstacles to delivering higher returns from innovation. It suggested companies "introduce something new on a scale where it has sufficient impact to re-define a market while still not ‘betting the farm’ and pursue "a prudent and disciplined investment approach that specifically addresses innovation risk management".
Eminently sensible, I’m sure you’ll agree and yet… I wonder. If you look at the IT industry, for example, which is surely one of the fastest moving and most disruptive industries there is, there’s no doubt that "innovation" has been a major catalyst for change. There have been any number of technology waves over the past 30 to 40 years and plenty of large older businesses have disappeared to be replaced by newer upstarts.
But even in the IT industry is there any significant divergence from the figures provided by Accenture? For example, at any one time, are there really many more than 18% of IT companies that are delivering competitive advantage through their innovation strategy? And would it not be fair to believe that as many as 64%, if not more, could be pursuing a policy of renovation rather than innovation?
They might not put it that way. In fact, given the frequency with which IT companies invoke words like "innovative", "revolutionary", "leading-edge", "unique" and "best of breed", you might be led to believe that innovation is all they are focused on, but there are very few businesses in the IT firmament "betting the farm" on innovation year in, year out.
While IT companies might believe their customers are influenced by the emphasis they place on these adjectives, the fact is that if they were constantly innovative, their customers wouldn’t thank them for it. For the vast majority of businesses, renovation is perfectly adequate for what they want to do and for them to make a living. Besides, as the IT industry has demonstrated on numerous occasions throughout its history, even if someone else does something innovative and it’s successful, it won’t be long until there are a herd of other products on the market doing pretty much the same thing. And quite often the people who come in after the innovators are the ones who make the money.
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