For succeeding with Innovation, we need ideas. Innovators easily generate a Flow of Ideas out of brainstorming and other techniques. However, experimenting with ideas is costly. Instead of building a large pool of ideas, the challenge is to figure out those ideas which will systematically ferret value out of the market. Moreover, those ideas should fit in for consistently fuelling Waves of Innovation. Hence, we need to focus on a structured approach for leveraging innovation patterns.
Exercising systematic innovation in a competitive market is a key challenge for reducing resource wastage and innovation mortality rates. Profiting from innovation in a competitive market depends on addressing two major uncertainties. The first one belongs to the likelihood of the products’ fitness to get customers’ jobs done. How will competition respond in offering a similar, better or cheaper product is the next uncertainty. Innovators may generate a flow of ideas depicting many combinations of product features to fit customers’ needs. Similarly, we can envision a large variation of the competition’s offering.
However, the experimentation of each of them in the market consumes both time and resources. Hence, the main difficulty has been not generating a large number of ideas but coming up with meaningful ones. The originality should focus on making the product to get the job done better, and, also preferrable, requiring fewer resources to make and operate the product. Moreover, it should also shed light on justifying the innovation, like Walkman or MRI, whose parallel does not exist. Such necessity requires organized thinking and structured processes rather than the random generation of ideas.
Systematic inventive thinking
It has roots in TRIZ. A Russian acronym stands for “a problem-solving, analysis and forecasting tool derived from the study of patterns of invention in the global patent literature.” SIT deals with two main areas of creativity. They areIdeation of new ideas and problem-solving. In the 1970s, researchers developed many methods for idea generation. Some of them are brainstorming, synectics, random stimulation, and lateral thinking for increasing the supply of ideas. However, studies show that the main difficulty faced by problem solvers is not generating a large number of ideas but coming up with the appropriate ones. Hence, the structured approach to idea generation is the starting point for systematic inventive thinking (SIT).
SIT approaches new product development by identifying and applying certain well-defined schemes derived from a historical analysis of product-based trends. These are called patterns or templates. There is no denying that these templates can contribute to the understanding and prediction of new product emergence. However, historical data do not provide an adequate signature of like discontinuity in the product space. Moreover, the competitive offering makes the willingness to pay for an innovation function of time, often drifting downward. Hence, the SIT body of knowledge should also have a focus on detecting the pattern or trend of competition.
Contemporary patterns are keys for theorization of the innovation process
Finally, the focus should be on making products better and less costly to produce and operate to get customers’ jobs done better. Some of the contemporary patterns to support systematic inventive thinking are explained in the following sections. It’s the understanding that these patterns will shed further light to support the practice of SIT derived from TRIZ: “theory of the resolution of invention-related tasks.” Particularly, these trends reveal patterns of evolution of many great innovations across industries and time frames, starting from the light bulb, word processing to mobile phone handsets.
Keep changing technology core is at the core of systematic innovation in a competitive market
A product comprises one or several technology cores. Many of the industrial products started the journey with mechanical components. Ideas of making products better and also cheaper largely depend on the limit set by the underlying technologies. For overcoming those limits, the focus should be on changing the technology core. For example, a typewriter having paper tape type memory limited ideas of increasing word processing features. The change of this technology core led to the explosion of original ideas for performing word processing tasks far better and at less cost. Besides, the whole of Silicon Valley came out with the agenda of changing the electrotechnical switch of telephone exchanges with solid-state switches to increase reliability and decrease the operating cost of telephone services.
There has been a trend or pattern in changing the technology core of industrial products. It began with changing mechanical components with electro-mechanical ones. Subsequently, it led to replacing electrotechnical parts with electronics. The journey has been continuing to change them with software. The zero cost of copying and operating software has tremendously increased the scope of generating ‘original’ ideas for making products better and cheaper.
However, there has been a challenge to profit from ideas of changing technology core. Change of major technology core, invariably, leads to inferior emergence. These inferior products neither create appeal to major customers of incumbent designs nor produce profitable revenue. For example, Tesla’s attempt to change the automobile’s technology core has been at loss since its inception seventeen years ago. Moreover, the majority of automobile customers are not opting yet for an electric vehicle. To turn such loss-making revenue into profit, the underlying technology core should be amenable to keep progressing to be, subsequently, better and also cheaper than incumbent designs.
Optimum engineering designs are not sufficient enough for the success of systematic innovation in the competitive market
It’s understandable that Soviet inventor Genrich Altshuller made a wonderful contribution to developing TRIZ. His algorithmic approach of problem-solving, analysis, and forecasting tool derived from the study of patterns of invention in the global patent literature should face the issue of technology uncertainty, among others. It should also take into consideration of the culture of pursuing a relentless journey of perfection. Otherwise, it would be difficult to interpret Sony’s success in an electronic image sensor or also the uprising of Japanese tinkerers as innovators. Moreover, TRIZ’s 40 principles of the invention appear to be devoid of the effect of emerging technology core and likely consequences of loss-making revenue. Furthermore, the consequential effects of technology leading to attaining price-setting capability and causing disruptive effects in the competitive market are not within the scope of TRIZ.
Delegate increasing roles from human to machine
The delegation of roles from human to machine has been a major trend in the evolution of innovation. For example, three has been continuing delegation of roles of using automobiles, starting from firing the engine, opening the doors to driving the automobile, from human to machine. Similarly, roles in making automobiles are also increasingly being delegated to machines. Such a trend is making products incrementally better and opening the path of fueling creative destruction, leading to Disruptive innovation. For example, computers’ graphical user interface delegated tedious human roles of memorizing commands and typing them meticulously to the intuitive point and click operation. Moreover, this idea of innovation of role delegation from humans to machines fueled creative weaves of destruction, subsequently disrupting mini and mainframe computer industries.
Careful observation indicates that this pattern of innovation is highly dominant in the evolution of the industrial age. Moreover, this trend of role delegation is leading to cognitive role delegation from human to machine. Subsequently, the dumb devices of the industrial age will be artificially intelligent machines. We call them cyber-physical systems. They will be at the core of unfolding the Fourth Industrial Revolution. Hence, innovators need not wander around in pursuit of creating a flow of random ideas. Although innovations unfold like magic, however, there appears to be an option of pursuing systematic innovation in a competitive market.
Leverage externality effects for practicing systematic innovation in a competitive market
The Externality Effect is gaining increasing momentum. The ubiquitous mobile internet and software-centric innovations are expanding the scope of profiting from the externality effect of ideas. For example, both Facebook and Google are success stories from externality effects. Similarly, Apple has been gaining significant millage from the option of downloading the 3rd party apps to the iPhone or iPad from the app store. As a matter of fact, generating ideas for leveraging the externality effect has been at the core of competitive strategy in the digital space.
Expand Economies of Scale, scope, and externality effect for attaining price-setting capability
In addition to innovating a wonderful product, systematic innovation in a competitive market should also focus on economies of scale, scope, and externality effect to profit from such innovations. Particularly, software and connectivity-based innovations have changed significantly the competition space. On the one hand, the cost of copying the software is zero. Besides, over-the-air uploading of the next version of software maintains the innovation’s edge. Furthermore, network effects keep increasing the perceived Utility with the growth of the customers. Apple’s success in being the most valuable company is primarily due to generating and exploiting ideas of gaining scale, scope, and externality effects of its products like iPhone, iTunes, Apple Watch, or iPad. Tesla has also made a bid to monopolize the automobile industry by leveraging the innovation trend of making automobiles as software and connectivity-intensive intelligent machines.
Focus on releasing successive better versions, consuming fewer resources
Irrespective of the greatness of the innovation and patent barrier, invariably, the competition will be responding with replication, imitation, innovation, and also substitutions. Hence, systematic innovation in the competitive market must keep focusing on releasing successive better versions. This reality is so true that even Apple’s magical iPhone is not immune to it. In fact, like many other innovations, the iPhone is like a seasonal crop. This seasonal nature is an important underlying pattern of technology innovation dynamics.
Studies indicate, more than 80% of innovations do not survive beyond the first birthday. However, there have been increasing examples of systematically ferreting out value by a few winners with a handful of products. It’s time to focus on systematic innovation in the competitive market, instead of, randomly throwing ideas.