The Myths About Innovation

This article first appeared in The Straits Times on 13 June 2006.

Innovation is more applicable to hi-tech industries. Innovation means inventing new products. Innovation is doing R&D. Only big companies can afford to innovate. Innovation is good but not a necessity.

Thanks to misconceptions such as above, many organisations don't innovate and, as a result, fail to enjoy a competitive edge. The truth about innovation is different.

Myth # 1: Innovation is for "other" industries
The very competitiveness and nature of certain industries put them in the forefront of innovation. For example, announcements about new products and technologies often come from semiconductor, biotechnology and IT industries. But what about other industries?

Is innovation applicable to industries like construction, hospitality, retail, food, healthcare, tourism or consumer goods? The answer lies in recognising that innovations in one industry invariably have ripple effect on other industries.

For example, wireless Internet access, a relatively new technology, is fast becoming a differentiating feature in cafes. Advances in medical sciences are prolonging human life, but with that comes the need for innovation in industries like insurance, health-care, food and even housing.

No industry is an island. Innovation is applicable to all industries-hi-tech, low-tech, old and new.

Myth # 2: Innovation is inventing new products
Hot new products like latest digital music players, mobile phones and cameras are the most visible form of innovation. But innovation is more than inventing new products. Innovation can also happen in services, business processes and business model itself.

All hospitals provide care for patients' bodies. If a hospital adds a service to take care of a patient's mind and spirit, for example, by providing something soothing and inspirational to read, watch or listen, it would be an innovation in services.

When a manufacturing company modifies a process to cut down production time, worker's effort or quality problems, that's process innovation.

Dell's strategy to eliminate retailers and directly deal with customers is an example of innovation in business model.

So innovation goes well beyond inventing new products.

Myth # 3: Innovation is R&D
R&D is a highly sophisticated, organised and focused form of innovation, which is more applicable to certain industries such as pharmaceuticals, biotechnology, and information and communication technology. R&D requires deep pockets and long patience.

But equating innovation with only R&D will be like equating education with only Ph.D. Many industries, for example, hospitality, tourism, retail, consumer goods, financial services and construction don't need an R&D department to carry out innovation.

Innovation should not be seen as an exotic activity to be carried out only by scientists and engineers, but as an everyday activity involving all departments and people in an organisation.

Innovation is everybody's baby.

Myth # 4: Innovation is for giants
Innovation is often associated with leading companies like 3M, Toyota and GE. A valid question to ask is, "Did these companies become giants because they innovated or they innovate because they are giants?"

For 3M, founded in 1902 as a mining company, the first major turning point in its fortunes came in 1925 when one of its engineers, Dick Drew, invented masking tape. After tasting the dividends of that first innovation, the company caught on to the idea of innovation like no other company. Today, several innovations later, it's a 20-billion corporation and continues to be a shining example of what innovation can do for an organisation.

Innovation is an engine of growth for an organisation, not an after-effect of growth.

Myth # 5: Innovation is optional
To a business struggling for survival, innovation may appear as a distraction from the fight for survival. On the other hand, to a business doing fine today, innovation may appear to be an unnecessary activity.

One should not, however, forget that winners in any competition, whether in academics, sports or business, are always those who do something more, better, new or different than the majority. That's what innovation is all about.

To a business that is struggling, innovation is the cure. To a business that is doing well, innovation is insurance for the future.

Innovation is not an option; it's a necessary response to the growing heat of competition in today's globalised world.

Copyright © Atul Mathur, 2005

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