Geoffrey Moore (managing director of TCG Advisors, venture partner at Mohr Davidow Ventures and best-selling author of Crossing the Chasm and Inside the Tornado) wrote this opinion piece on Innovation for Sandhill.com. In the article, Geoffrey identifies and shoots down 10 myths surrounding innovation.
Here is a summary of the myths and Geoffrey’s explanations:
#10. We don’t innovate around here any more. Baloney. Your people are innovating all the time. The problem is, your innovations are no longer differentiating your company. Your innovations, in other words, parallel your competitors’ innovations, with the result that you all look more or less alike. Customers, seeing little to no difference, put more and more emphasis on price. Unable to distinguish your offer, you have no bargaining power, and most capitulate to their pressure.
#9. Product life cycles are getting shorter and shorter. And whose fault is that? If you do not differentiate in hard-to-copy ways, you cannot expect what differentiation you do create to be long-lived. Sustainable differentiation requires barriers to entry and barriers to exit.
#8. We need a Chief Innovation Officer. Like a hole in the head. Think about what your true goal is: you want innovation that creates differentiation that leads to customer preference during buying decisions. That sounds about as close to a core business strategy as you can get. It has to be grounded in the realities of operational capabilities, customer feedback, competitor investments, and capital constraints. So your chief innovation officer by default must be your P&L owner. If that person isn’t stepping up to the innovation task, replace them with someone who will.
#7. We need to be more like Google. Not on your life. Google is a once-in-a-decade phenomenon, a company riding a wave of adoption so powerful that not only is the first derivative of its growth curve positive, but so is the second derivative. If that describes your market, we doubt you are worrying about innovation.
#6. R&D investment is a good indicator of innovation commitment. No, it is not. R&D represents the engineering department’s lead, and in general pays off well in double-digit growth markets and increasingly poorly in single-digit growth markets. Continuing major investments in R&D in slow-growth markets is a good measure of lack of innovative thinking.
#5. Great innovators are usually egotistical mavericks. Not any more. In the current decade there is more competitive differentiation to be gained through collaboration than through busting out on your own. That’s because our extended supply chains reward each company for focusing on its core and outsourcing the rest of the offer to someone else in the chain. But actually orchestrating these chains to perform effectively in real time requires enormous innovation.
#4. innovation is inherently disruptive. Not necessarily. To be sure, authors like Clay Christensen and myself have spent much of our life’s work chronicling the impact of disruptive innovation, but it is only one type among many. Alternatives include application innovation, product innovation, platform innovation, line extension innovation, design innovation, marketing innovation, experiential innovation, value engineering innovation, integration innovation, process innovation, value migration innovation, and acquisition innovation
#3. It is good to innovate. No, it is good to differentiate on an attribute that drives customer preference during buying decisions. Innovating elsewhere costs money and entails risk but does not create competitive advantage.
#2. Innovation is hard. Actually, it is not. What is hard is deploying innovation, especially in an established enterprise. That’s because the critical deployment resources are all engaged trying to make the quarter on the back of the existing offer set in the existing market categories.
#1. When innovation dies, it’s because the antibodies kill it. Yes, but not how you think. The murder takes place in the customer’s world, not in yours. Here’s how. As a management team you hope to leverage the current relationships managed by your sales force to introduce the next-generation innovation. But the synergies implied by this tactic are revealed over time to be false – the current team does not have any relationships of merit with the new target customer. Instead it has legacy commitments to the old target customer who in turn is threatened by and resents the intrusion of the new innovation. Thus your own sales force finds itself more or less honor-bound to sabotage your next-generation effort. Whether they actually do or not, they are in no position to lead the kind of charge required, and it is no wonder when some piddly little start-up beats your finely tuned sales machine to the punch.
Geoffrey A. Moore’s new book is Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution. Moore is managing director of TCG Advisors, venture partner at Mohr Davidow Ventures and best-selling author of Crossing the Chasm and Inside the Tornado.
The complete opinion piece is available at http://sandhill.com/opinion/editorial.php?id=66&page=1.