When all you have is a hammer, everything looks like a nail.
That English proverb suggests that if someone has only a limited number of tools, instruments, or skills to resolve problems, they may be used in situations where they are not meant to be used.
If a business is facing a problem, they have to correctly identify it before it comes up with innovative ideas as their solution. To make sure that the solution can address the issue and bring in results, a company that operates like a tool factory should streamline its innovation process.
Incremental innovation
For instance, if a customer wants to use a screw to fix a picture on the wall, and the current tool they own, the hammer, is not suitable for this. With this, they may recommend and develop a better version of their already existing product.
The output could be a bigger hammer that would allow the customer to get the screw into the wall. This kind of innovation is called incremental innovation, which occurs when a company’s existing products or services have been upgraded to meet customer needs or further compete in the market.
For example, Apple Inc. originally created a touchscreen tablet, but now it combines the functions of an iPod, a cell phone, and an internet communication device.
If the tool factory wants to build an innovation culture within the organization, invest in research and development and intellectual resources and then come up with something new. This kind of innovation is called radical innovation, which refers to replacing existing products or services with new ones that have never been done before.
Amazon.com can be considered a radical innovator since it managed to revolutionize bookselling and introduced the portable wireless electronic reading device now popularly known as Kindle.
If the product innovation is successful and the customer buys the screwdriver and can fix their problem, this means that the tool factory can:
grow as they offer solutions for two types of issues
remain profitable since the customers who already have a hammer can now buy a screwdriver too
differentiate themselves from the other factories because they are offering something that competitors don’t.
Why innovation fails
However, a product innovation like the screwdriver could fail for many reasons.
One reason is innovation does not solve a customer’s problem all the time. For example, if the initial research was not correctly done, it could be possible that the customer needed only duct tape to put the picture on the wall. It may have nothing to do with the screwdriver because the customer does not have a screw.
Moreover, innovation may take too long to be launched in the market so the customer may look for other possible solutions. For instance, if the customer does not have the necessary tool to put the picture on the wall, they might buy a photo album and use it for all their other pictures in the future.
Another reason why ideas may fail is they are underfunded or poorly launched. If the company does not have the right marketing strategy for the screwdriver, people won’t hear about it and therefore, won’t be able to use it.
The execution of ideas requires time and resources too. The manufacturing machines used to develop the screwdriver are expensive. It takes a lot of time for employees to learn the manufacturing process and how to use the machines.
An iconic example of innovation failure was the Galaxy Foldable Phone by Samsung, which meant to offer large screens in small spaces to customers. However, when the device is folded, customers don’t find it comfortable to carry. It is also deemed too fragile. Because of this, the production of the device lasted for only a few months and then it was halted.
If businesses want to make product innovation work, they have to do their research properly and understand what customers actually need. Businesses must also allocate enough resources to develop new types of instruments.
If there is a new product, businesses must develop and test product prototypes first and identify all the possible problems that may come with it. It is also important to invest in introducing a new product to customers and educating them on how to use it. The most important thing is not to screw up, but to nail it!
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Editor’s Note: This article was originally published on August 20, 2021 and last updated on October 09, 2024.
Considering innovation as a system and having a goal to embed it within one’s organization is neither an easy task nor an impossible one. If this is the primary objective, and if this aligns with the consensus of all stakeholders, it becomes crucial, before commencing any actions, to adopt a mindset focused on innovation, akin to how one concentrates on developing the organizational direction to enhance revenue and profit.
This implies that to succeed, the same level of effort and methodology must be directed towards developing the organizational strategy and executing the most effective and efficient innovation methods. This involves clarifying the purpose, establishing the right mission (the reason behind the initiative and the desired impact), and defining values (principles guiding all stakeholders). Internal environmental analysis (identifying organizational strengths and weaknesses related to capabilities, resources, assets, skills, and competencies) and external environmental analysis (recognizing external opportunities and threats) are also crucial. Subsequent steps include performing SWOT analysis (aligning external opportunities and threats with internal strengths and weaknesses), conducting scenario planning (suggesting strategic scenarios based on SWOT analysis alignment to set necessary objectives), and identifying value drivers (features distinguishing the value generated from the innovation strategy).
Based on the aforementioned, it’s imperative to create a vision (the long-term goal for the innovation system), establish SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) objectives, select appropriate and balanced key performance indicators (KPIs), develop sound and aligned initiatives (supporting the achievement of selected KPI targets and objectives), and consequently, disseminate the entire innovation strategy throughout the organization at all levels.
Consequently, all stakeholders must align themselves, identify their needs and expectations, and determine how to meet these through the innovation strategy. Subsequently, they should proceed with the execution process, understanding and acknowledging the clear alignment between the innovation strategy and the organizational strategy.
It is essential to view the innovation strategy as a core success domain for the organization, understanding that progress, improvement, and profit growth are interdependent with the innovation system. Moreover, it’s crucial to ensure the involvement of all stakeholders in this system, while embedding continuous improvement as the primary driver in maturing the system over time. Similar to excellence, innovation maturity is an ongoing journey that continually brings added value, which should be appreciated and built upon.
The fourth industrial revolution has commenced. Linking it with innovation, transformation, future forecasting, and future change is pertinent, as they are all directly driven by and enabled by data management. Nowadays, the primary infrastructure for any company worldwide transitions from physical premises and branches to the cloud, where data are structured, organized, and interconnected, drawn from various sources such as customer interactions, product and service utilization, service and product development phases, defect management, product degradation, input and output resources.
This transition highlights that numerous data sources have been in place, yet not all have been utilized, analyzed, and transformed into information and knowledge. The shift towards big data and the advancements in artificial intelligence and conditional monitoring have changed the landscape. Decisions are now based on data, not just analyzed to reflect the current state but also organized and correlated to predict the future, facilitating decisions that secure not only the present or short-term future but also the long-term future.
This evolution underscores the importance of starting with the development of the right architecture to link various data sources, leveraging their mutual support and integration for greater benefit. It involves embedding in this architecture the correlation of data from different sources to build new components in the system architecture, adding value to the overall system. Understanding this aspect emphasizes the need to benefit from all data sources and install more sensors in development processes, products, streets, houses, cars, and everywhere, moving towards a products-as-a-service paradigm and eventually achieving the end goal of a planet-as-a-service, where data from everywhere are fed, analyzed, and used to identify new information and knowledge for the benefit of all.
The case study “Apple’s Future: Apple Watch, Apple TV, and/or Apple Car?” narrates Apple’s journey focusing on three products: smartwatches, smart TVs, and smart cars. It highlights how Apple has targeted the market and addressed customer needs to increase global market share and profit while enhancing the brand image. While this approach appears commendable, it aligns with the traditional viewpoint that continuous profit growth sustains a business.
However, from an alternative perspective, Apple has consistently aimed to shift from the red-ocean to the blue-ocean strategy, moving away from competition. The increasing number of competitors, open-source software, and global innovations necessitates larger leaps. Apple’s success also stems from co-creating value with its customers, understanding their needs, and embracing innovation and change.
Another facet is that Apple’s current endeavors represent a short-term strategy aimed at long-term value generation and delivery. Data serves as the primary driver, with all products and services yielding valuable data. This contradicts the notion that customers don’t know what they want; rather, it underscores the importance of understanding customer pain points and co-creating value with them.
Apple’s products evolve based on collected data and usage behaviors, generating new value with each iteration. The incorporation of health data into products like the smartwatch and analyzing consumer behaviors allows Apple to add value beyond traditional usage scenarios. Ultimately, Apple’s strategy mirrors a child playing a PlayStation game, controlling and directing the world.
While this may seem daunting and scary, proper use of data-driven strategies can benefit everyone, provided they are employed ethically and responsibly and not end up as Mikhail Kalashnikov puts it: “The fact that people die because of an AK-47 is not because of the designer, but because of politics.”
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About the Author
Malek Ghazo is a seasoned Senior Management Consultant with over 14 years of experience in the realm of organizational excellence (EFQM, 4G, Malcolm Baldrige), performance management, strategy planning/execution, and sustainability/CSR management. Throughout his career, he has cultivated expertise in developing benchmarking studies on an international scale. His clientele primarily consists of both public and private sector entities, to whom he provides invaluable services in organizational excellence, strategy planning and agile execution, KPIs and performance management models development and deployment, as well as EFQM model adoption and implementation. Geographically, Mr. Ghazo has dedicated his efforts to Europe (with a focus on the UK) and the Middle East, particularly in KSA, UAE, Qatar, and Jordan. Currently, he is engaged in pursuing his PhD at the University of Pécs in Hungary, with a focus on exploring the correlation between circular economy and organizational excellence and sustainability, aiming towards global sustainability.
Editor’s Note: This article was originally published on March 26, 2024 and last updated on September 17, 2024.
