A full one-third of corporate revenue is generated through new product launches each year, a fact which speaks volumes about the importance of innovation. Because of this, and because of the concept’s popularization, innovation has gained an almost ubiquitous presence. We see its influence everywhere it seems, from the popular and professional literature all the way to company vision statements. But what is innovation, and how is it best achieved? We all know it’s critical for a company’s success in this highly competitive world, but the concept seems a bit hazy around the edges.
To clarify its nature, some basic questions seem to be in order. Is innovation rooted in the unique creativity of special individuals that have the ability to generate ideas (seemingly out of nowhere) that transform, or is it simply the inevitable result of the next stage of a particular discipline’s evolution? Are there people who, despite the way customers do things and in spite of the way they behave, are able to almost magically transcend present reality to create something special and transformative? Or, is innovation best seen as the necessary outgrowth, and rooted in, present reality? In fact, neither of these options do justice to the way things actually are. Concerning the former, transformative innovation doesn’t come from a mind that’s not deeply rooted in present realities. Ideas that come from speculative fancies are like an answer in search of a question; they’re bound to address issues that aren’t concerns of real people. They’re simply ideas divorced from reality. What I have in mind here is the guy toiling away in his garage to invent something without first trying to understand what his potential customers might actually want, which is often very different than what we think in solitude. Such an attitude is fostered by the plausible sounding argument that customers don’t know what they need, and that real innovators fly above the fray and are uniquely able to tell them what they need.
Reality however is quite different. While a person might think he can fly without an engine, he’ll soon be corrected by the reality of gravity. Founder of Southwest Airlines, Herb Kelleher, once said that “Customers are like a force of nature: You can't fool them, and you ignore them at your own peril.” That this is a widespread phenomenon probably has something to do with the astonishing failure rate of start-ups in the first five and ten years of business (over 50 and 70 percent respectively). As for our second option, true innovation doesn’t come by way of a natural evolution of the way things are. Japanese companies in the 1980s became masters of incremental improvements on operations and processes, enabling them to produce products faster and with higher quality. While it gave them an advantage for a time, they eventually suffered due to the fact that operational effectiveness isn’t the same thing as innovation. Minor improvements, which do result in operational efficiencies, simply don’t equate to the innovation which has become so key in today’s competitive environment.
I believe the best way to view innovation consists in recognizing its dual nature, in its dynamic relationship with both of our options above. What this means is that transformative innovation is deeply rooted in the way things are, while at the same time it has qualities transcending that reality in some significant way. We can thus say that innovation is emergent from present reality and arises out of it, but it does so by making unique interconnections between disparate elements of that reality, resulting in something new; something that, through those interconnections, gains new characteristics that were not part of the individual parts alone.
We might gain something by drawing an analogy with the human brain and its relation to the mind. The brain is a highly complex system of neuronal networks that operate in concert, and out of which something truly unique emerges that we call consciousness. What’s important is that this intricately interconnected system is a necessary physical substrate that sustains self-consciousness. And while consciousness is deeply rooted in, and therefore dependent on, those vast physical interconnections something arises - consciousness - which isn’t easily reduced to those systems. After all, among the animal kingdom humans have the unique ability for abstract thought and self awareness. Key to this is the concept of emergence, of something new/higher coming out of systems that operate at lower levels. We can point to the same sort of thing in a discipline like biology. While biology emerges from and is rooted in the fundamental laws of physics and chemistry, we can’t simply reduce biology to chemistry or physics; and that’s for precisely the same reason, namely, that the biological level has characteristics beyond those other levels in which it is rooted. Something unique happens the higher up you go. What’s important for our purposes is both that the higher levels wouldn’t be possible without the lower ones, and that the higher levels gain characteristics which can’t be simply reduced to the lower levels.
Truly transformative innovation is best seen as following the same pattern; as emerging from lower levels - defined here as present needs, products, processes, behaviors, and the like - and being rooted in them, but out of which comes something truly unique and endowed with characteristics that weren’t part of their individual elements. It’s precisely the result of the unique interconnections of those individual systems that allows something special to emerge (which is along similar lines to Michael Porter’s view on strategy). On this model we can see that innovation isn’t possible without being rooted in the lower levels; and then because of the unique interconnections it draws between disparate elements, it gains something which goes above and beyond those lower levels.
This view seems to make most sense of the fact that the more connections with reality that are made, the more fundamental the innovation and the harder it is to displace. An example of this is Steve Jobs’ “digital music revolution” in which the music lover (which is most of us) was given a single place to manage all of his music, along with a slick device that can go wherever he does. Or the iPhone, which brought together a whole host of things we love, from our music library, photos, email, browser, phone, all the way to thousands of other apps that connect our lives to technology - all again in a single device. Such innovations, being deeply rooted in activities we already engage in, aren’t easily dislodged - and, because they address deep needs, an automatic emotional connection is created in the consumer. Jobs’ innovations were thus deeply rooted in present realities, and therefore emerged from them, but they were able to surprise us through the interconnections of many different things - which created something truly unique. Either a lack of engagement with reality or mere incremental tweaks to current offerings would have preempted the Apple revolution that catapulted it to being the world’s most valued company in 2011. Here we see the both/and nature of transformative revolution.
Why is this significant? First, because our thinking is mixed with truth and error. Having innovation rooted in the lower levels provides a bulwark against speculative flights of fancy; or in other words, keeps us grounded in the real world with real people and real problems and desires. As we all know, the world is constantly changing, and reality is the best check against veering off in the wrong direction. And these very real problems provide the fodder for our creative processes, which as we zoom out and look at them from a broad perspective, allow us to make new connections that change the way people do things.
Second, it’s significant because viewing innovation as such suggests that to be truly transformative, we must dig down beneath the surface phenomena to the root causes of things - often hidden and difficult to surmise - in order to really address human needs and desires; with the ultimate goal being the discovery of patterns, which are an essential element in innovation and the thing that makes it compelling and emotionally significant to a wide audience. This shouldn’t be surprising, as it’s been the model for science for hundreds of years and thus might even be seen as reflecting something fundamental about how people best understand reality as a whole. Such a view tells us that causes with their corresponding patterns must be discovered with sensitivity and attention to underlying mechanisms and behavior. IDEO has risen to be one of the world’s most sought after design firms precisely because they’ve embedded these concepts into their core practices, which begins with their “deep dive” process that seeks to understand problems from multiple perspectives, and with a thoroughness one might expect only of the practicing scientist. Yet it’s been proven successful time and again, perhaps because that’s the way reality demands to be interrogated and the way our creative processes flourish.
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