“All we ever do, is all we ever knew.” – The Head and the Heart, All We Ever Knew
I am a big fan of music. Real music. Music that stirs the soul. Music that’s not fabricated or perfected. Music that’s carefully curated, which is why I quoted The Head and the Heart. They’ve been in my favorites list for a few years. They’re been deliberate in every lyric written, in every song produced.
You’re probably asking yourself, “what does this have to do with innovation?” Plenty.
Music is similar to innovation. There’s music that’s carefully crafted and written, and then there’s remakes and covers. Both can be great. Similarly, a product can be developed or invented or it can be remade – or converted - into something new. And again, both can be great.
In my experience, innovation through creation tends to be the most difficult of the two innovation approaches. While this strategy requires significantly more money, time and human capital, it also requires a tremendous amount of perseverance and commitment – the sweat and blood of our industry. This doesn’t discredit the conversion approach, but it’s generally harder to create something than to remake it.
The creation-types are the first to market.
They’re looked to as leaders.
They’re the Carnegies, Fords, the Rockefellers and the Vanderbilts.
They’re comfortable making mistakes and being wrong.
But they thrive on getting it right (before anyone else).
They’re infectious, inspiring and sometimes even provoking.
They make the mold and then break it.
Innovation through creation has three viable strategies for the creation-type: new-to-company, new-to-industry and new-to-market. Most of the innovation we observe or experience today is usually categorized as new-to-company or new-to-industry. The edgy, and often unthinkable advancements, are the new-to-market innovations. Each of these strategies increase in difficulty as you increase the size and scope. So new-to-company is the easiest of the creation strategies, new-to-market is the hardest.
This stage is generally the easiest innovation strategy to undertake. In terms of the innovation through creation strategy, it requires less investment, less time and less people. This is the stage where employees all say, “finally!” after everything has been implemented.
I worked for a client several years ago that didn’t have an automated online acquisition platform. If a customer wanted a new account, they would complete a generic contact form online, a call center employee would contact the customer, identify the need and then open an account. When we finally automated the process, creating an actual application, removing the manual fulfillment and making everything self service, everyone breathed a sigh of relief. But everyone was excited about the solution and the potential for the organization. 7 years earlier, their competition introduced the same features.
This is the stage I refer to as crossover innovation. Using the music example again, it’s similar to a crossover artist. In 2006, an artist by the name of Taylor Swift showed up on the country music scene and experienced unbridled success with her self titled album. That album sold 5.5 million albums worldwide. In 2008, with the release of her sophomore album, Fearless, she sold 8.7 million albums worldwide and also took home the Grammy Award for Album of the Year and Best Country Album – taking her to pop star status. Fearless was also the first album in history to win the American Music Award, Academy of Country Music Award, Country Music Association Award, and Grammy Award for Album of the Year in the same year making it the most awarded album. Crossover success achieved.
Crossover innovation works the same way. The easiest and most useful case study for crossover is Amazon. Their retail product recommendation tool started a new wave of product recommendations and personalization solutions in a variety of industries. Insurance companies like Progressive and State Farm began using data to recommend bundled product opportunities for discounts. Health insurers like United Healthcare and Aetna recommended providers to patients based on personal attributes and location. Credit card companies used cookie data and real-time analytics to identify prospect personas to recommend credit based products. These industries borrowed from the retail experience within Amazon to improve the experiences for their customers in a completely different vertical.
It’s in this stage where we see patentable innovation. Creators like this approach because they turn heads and often times make the unthinkable a reality. New-to-market innovations in recent years include wearables (Fitbit, Apple Watch, Samsung Gear, Nike+), virtual realty, consumer drones, smart homes, etc. These are all advancements that people and organizations began to work on years ago but the mass market never bought into the validity of such products, until now.
The trailblazers that are committed to this stage are comfortable making mistakes and focused on getting things right. Steve Jobs once said, "sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations (The Wall Street Journal, May 25, 1993).” This is paramount in this creation approach.
It’s a remarkably smaller group of innovators because of the resources required to participate in this stage, but they ultimately have the most downstream impact of any other group. One last example to tie this together for you. You’ve probably seen The Devil Wears Prada, and if you say you haven’t, you’re lying. And if you claim it wasn’t a good movie, you’re also lying. In the scene, Miranda Priestly (played by Meryl Streep) makes the following comments about the fashion choice of one Andy Sachs (played by Anne Hathaway):
“You think this has nothing to do with you. You go to your closet and you select... I don't know... that lumpy blue sweater, for instance…But what you don't know is that that sweater is not just blue, it's not turquoise. It's not lapis. It's actually cerulean. And you're also blithely unaware of the fact that in 2002, Oscar de la Renta did a collection of cerulean gowns. And then I think it was Yves Saint Laurent... wasn't it who showed cerulean military jackets? And then cerulean quickly showed up in the collections of eight different designers. And then it, uh, filtered down through the department stores and then trickled on down into some tragic Casual Corner where you, no doubt, fished it out of some clearance bin. However, that blue represents millions of dollars and countless jobs and it's sort of comical how you think that you've made a choice that exempts you from the fashion industry when, in fact, you're wearing the sweater that was selected for you by the people in this room from a pile of stuff.”
The entire scene is worth watching.
I think many of the new-to-market creators think like this. They carve a path for the rest of us to follow. They’re so far in front of us that we don’t even stop to consider that many of the things we take for granted today were made possible by their work years before. It’s why this stage is called consequential innovation.
Regardless of the option an innovator chooses, innovation through creation comes with a great deal of differentiation. The ability to introduce a shiny new object tips the balance in the innovator’s favor, but it doesn’t without significant risk. But to an innovator, risk is a philosophical feat.