There's a lot of chatter about innovation. Business leaders are often told, "If you're not innovating, you're stagnating." But what do people actually mean by innovation?
In pre-industrial times, that might have meant using a cow to pull a plough instead of hoeing the fields by hand. In the 18th Century it might've referred to using a steam engine to mechanise your Spinning Jenny. Fast forward to the early 20th Century and the latest innovation of the time was the automated production line.
And now in the 20th Century, the word is used to describe all manner of digital transformation, whether that be eCommerce, blockchain or more recently the all-pervading promise of artificial intelligence.
Put simply innovation is the "practical application of ideas, resulting in new or improved products or services which add value to any organisation."
Delving a little deeper, it appears there are three different types of innovation: disruptive, sustaining and breakthrough. And to help illustrate the difference, let us consider the evolution of the mobile phone.
The UK's first call from a mobile phone was made in 1985. To the folk who had one, the mobile phone was a game-changing breakthrough innovation. However, to the incumbent telephone operators, this was a disruptive innovation. Whilst interesting, they didn't consider it a threat. The market was too small and the margins too slim for them to focus attention on it.
Those companies were far more interested in sustaining innovation. Making incremental improvements to their network, products and services. From their perspective, that's where the value lay.
Time moved on and the mobile phone market grew. As did the number of players in that space, including the aforementioned incumbent telephone operators. The once disruptive technology had evolved into the business of sustaining innovation.
Better products. Smaller, faster and more cost effective. Or better networks. Or clever partnerships. The aim of the game was now gaining market share by offering more attractive features.
That was until the iPhone came along as a breakthrough innovation. Apple opened up an entire new market by providing a service no one knew they even wanted via iTunes and the App Store.
Except to most of the other mobile operators, this wasn't breakthrough innovation, the iPhone was disruptive: whilst interesting, they didn't consider it a threat.
For the hardware manufacturers, they had good market penetration and were making good profits simply trying to outdo each other. Besides the size of the market segment to whom iTunes and the App Store catered was too small to consider upending a successful business model.
Whereas for the software companies, games designers and the music industry, the iPhone was a prime example of sustaining innovation. It offered them an opportunity to gain market share quickly and they could adjust and develop their business model in a cost-effective relatively risk-free manner.
What we might deduce from this, is that the "practical application of ideas, resulting in new or improved products or services which add value to any organisation" really does depend on your perspective.
What is innovative to one, might be business as usual for another.
Don't get caught up in the hype. Work out what is best for you, your business or your customers. Where might you or they, derive the most value?