Innovation and Strategic Intent

Gary Hamel isn't an innovation "expert", he's a strategy and management expert, which you'd know if you've read Competing for the Future or The Future of Management.  However, since there's a significant amount of overlap between innovation and strategy, you'll find that Gary has a lot to say about innovation.  If you haven't read The Future of Management, go out and get a copy, read it, and then consider your options.  But this post didn't come to praise Gary, it came to bury poor strategic management.

In his earlier book, Competing for the Future, Gary suggests that every firm needs a clearly communicated Strategic Intent.  When we at OVO train our clients on the relationships between strategy and innovation, we borrow heavily from Gary in this case.  Here's Gary's definition of "Strategic Intent":

An ambitious and compelling dream which provides emotional and intellectual energy for the company and defines the journey to the future.

Strategic intent is your firm's ability to create a clear and compelling statement or vision for itself, and to communicate that vision to its employees, shareholders and most importantly, its customers.  When anyone in a firm asks "why are we here", it should be easy to answer.  Does your firm have a compelling dream that provides emotional energy and defines its journey to the future?  If not, how can you possibly expect to innovate?

We at OVO believe that firms innovate best when they have a clear strategic intent, and when they innovate within that strategic intent.  Good examples here are, unfortunately, Apple and Google.  I say unfortunately because these are two of examples always used about innovation, but in this case they offer beneficial lessons about what to do, and what not to do.  Apple's strategic intent is based on user experience.  Apple didn't invent the MP-3 player, or the cell phone.  It simply improved on those products and amplified the user experience.  However, Apple's failures are insightful.  The Newton and the Lisa were two examples where Apple failed to innovate around the customer experience.  Firms innovate best when they innovate within the context of their strategic intent.  Hutch Carpenter explores some of these successes and failures at Apple and Google in a good post.

This is true because a well communicated strategic intent helps customers and business partners understand your value proposition.  Ideas that augment and extend your value proposition are more easily consumed, while ideas that violate or seem unaligned to your value proposition are difficult for employees to understand and difficult for consumers to accept.

So, there are two important possible failures when innovating when it comes to strategic intent.  The first is the failure to define a strategic intent for your business, but that's not really an innovation failure.  You may think many firms have this, but few firms have a clear, concise description of their strategic intent.  Most prefer to leave the issue a bit ambiguous, which makes innovation difficult.

The second failure is having a strategic intent and working on innovations that dramatically ignore or violate your strategic intent.  If, like Apple, your value proposition is around user experience, then your best innovation opportunities lie in extending user experience.  And where Apple has been successful, that's exactly what they've done.  And when they've failed, many root causes of the failure can be linked back to ignoring Apple's strategic intent.

Why clear strategy is so important to innovators

One of the reasons that it is so difficult to innovate successfully over a long period of time - say a couple of years or more - is that most organizations simply don't have very clear strategic goals or mission statements that are well understood and form the basis for what gets done.  When there's a lack of clear, concise direction and strategic goals, it is exceptionally difficult to measure or predict the value of an innovation initiative.  When the absolute value of an innovation effort is not easily calculated, the work is marginalized or worse, left on a slow burn just to "see what will happen".

Many organizations are taking the "slow burn" approach - keeping a pot of innovation cooking on the back burner of the stove to see what unfolds.  These firms are waiting to see what happens in the near future, and hoping that the stew in the pot on the back burner will produce something interesting when, and if, they need it.  This methodology is both reactive and unplanned.  Reactive in the sense that the firms are waiting for the future to unfold to see what products and services are important, rather than placing a big bet to move the industry with a radical new product or service.  Unplanned in that they are allowing the market, new entrants and consumers to shift demands, rather than creating demands with interesting new products.  When the future does unfold, they'll likely find that the good ideas that were in the pot are now outdated.  When that happens, innovation will be deemed a failure, since there weren't any good ideas ready when the organization finally decided to pull the trigger.

What's needed for innovation to succeed in these environments is a clear, definitive strategy about the future of the business, and what aspirations or goals the firm has for itself.  If the executive team thinks disrupting other markets or taking on product and service leadership is important, that must inform the work of the innovation teams.  Innovators can easily create ideas and products that will radically change the existing markets, in any industry, when given the resources and the direction.  However, a clear strategy comes with significant risk.  Often it's easier for executive teams to examine "best practices" and mimic the strategies of other firms, rather than embark on a different course.  Then, innovation is at best enabling a fast follower model, and it can prove difficult to get any long term value from being a fast follower, as your products and services are at best second or third to market and the innovation leader is well ahead on its course to create a new product or service.

Innovators in most firms aren't frustrated because they can't come up with new ideas, they are frustrated because they aren't sure which of their ideas is the most valuable and relevant to the management team. Compound that fact with the fact that few firms do a good job of trend spotting and scenario planning, and it's likely that few firms do a good job understanding the wants and needs of their customers just a few years into the future, or how to direct those customers to demand new products and services.  In fact, often the only people with a good sense of what will be required or demanded by consumers in the near future are the innovators who take the time to do trend spotting and scenario planning, which is another powerful yet underutilized process in most firms.

We as innovators talk about the importance of linking innovation and corporate strategy, but the fact is that often corporate strategy is unclear or poorly communicated.  In other cases the strategy is to be a lot like everyone else in the industry, which is anathema to innovators.  Until your firm has a clear strategic goal and communicates that clearly to its innovators, you'll have executives frustrated with the new ideas that aren't implementable and innovators frustrated that no one will help them understand what markets, customers or needs are important.

Weaving innovation into the corporate structure

I'll get up and bang on my innovation drum all day, hoping that people will listen to the message.  What's heartening is to find other firms and other people who do the same.  Well, perhaps their drums are a little louder or more in tune, but the songs they are playing are the same.

Accenture has come out recently with a survey entitled Overcoming Barriers to Innovation.  Their subtitle is "emerging roles of the Chief Innovation executive".  The survey looks at what's succeeding, and what's failing, in corporate innovation, and from this work concludes that a "Chief Innovation" executive is required.  While I agree with many of their findings, I'm not sure I'll draw the same conclusions.

The first point that I think is salient in the survey is the reported gap in satisfaction between the CEO and other executives around innovation.  In almost every attribute around innovation, the CEO's reported satisfaction is anywhere from 20 to 30 percentage points higher than mid and senior level management in the same firm.  This result can be caused by one of three factors:

1. CEOs had a very low expectation of innovation, so any positive outcome is great
2. Mid/Senior level executives had a higher expectation of innovation than CEOs so their disappointment is evident
3. CEOs don't have a clear understanding about what innovation is actually happening so they have no reason to be disappointed, yet, while mid/senior level executives understand exactly what is happening and are already disappointed.

In case you weren't sure which factor I felt was most likely, my vote is with number three.  My experience is that CEOs have big expectations about innovation but aren't clear about the commitments and investments necessary, while mid-level and senior executives understand the costs but don't expect much in the way of outcomes.

Another point made was that CEOs must do more than simply create a vision for innovation - the CEOs needs to take ownership and create accountability for innovation execution.  It's not enough to stand on the mountain top and tell Wall Street we're going to innovate, the CEO must put programs in place and hold people accountable to ensure his or her words are backed up by corporate action.

To do that, and this one is near and dear to my heart, since we believe in innovation as a sustainable business process, "companies must treat innovation as any other business discipline by aligning resources, tools and processes with a clear set of performance goals and metrics".  This statement is the difference between talking about innovation and doing innovation.  After all, as we at OVO have said many times, every business organizes around consistent processes.  Processes describe workflows, define roles and responsibilities and ensure a consistent flow of products, services and information.  Well defined and rehearsed processes leave little to chance.  Most current innovation efforts have none of these characteristics and leave everything to chance.

Finally, since many organizations don't have processes and methods for innovation, and aren't clear about how to convert ideas into new products and services, the conversion rate for ideas is low, and the timeframe is long.  In fact the survey goes on to say "organizations need to focus on findings ways to accelerate innovation frequency and speed.  This is a major weakness, which has been identified by the survey, and which could serve as a major source of competitive advantage...".  Note the words frequency and speed.  If innovation is treated as a discrete, occasional project, the frequency is based on how often we kick off the projects, and the speed is dictated by the urgency of the project and the abilities of the team.  If innovation is treated as a core capability, frequency is dictated by how often we spot new opportunities and speed by the knowledge and understanding of the innovation process.  Note one other point that Accenture stuck in there at the end - "a major source of competitive advantage".  Here's another point on which we agree.  Firms that are more adept at innovation than their industry peers gain competitive advantage, driving higher prices, better margins and more market share.

So, what's it going to take to weave innovation into the corporate structure?

1. Ownership by the CEO
2. Accountability by senior executives reporting to the CEO
3. A defined, consistent innovation process adequately resourced and regularly measured
4. Working consistently to generate ideas and create new products and services, with regular frequency and top speed

You want to know what it takes to be innovative?  There's your information, supported by an Accenture study and OVO's experience.  While Accenture concludes that a Chief Innovation Officer is necessary based on this information, we can look at a number of firms that are innovative and meet these criteria that don't have a "Chief Innovation" officer.  The attributes are more important than the individual, in fact if the attributes don't exist then the individual will fail, as will an innovation focus.

Innovation - an era or a fad?

I had a rather disconcerting part in a recent discussion with some senior leaders and executives who were discussing innovation.  It was interesting to hear from some of them that they believe "innovation" is a fad, and will run its course shortly.  They believe that innovation is simply another "quick fix" elixir cooked up by management consultants to find new things to sell to senior executives.  Some others in the discussion believed that innovation is more systemic, and will have a longer shelf life, and add value for many years to come.  I found myself disagreeing with both schools of thought.

The cynics suggest that innovation is simply a buzz word for creating new products or services, something that many firms already do.  In that regard they view innovation as the current flash in the pan, meant to distract everyone from the real problems and place a nice bow on a box that already exists.  To these cynics I say - you couldn't be more wrong.  In a market that is moving and changing as quickly as the one we are experiencing now, and an environment where consumers are demanding more, and better, products and services, and in a production environment where any new idea can be copied fairly quickly, the only real winners are those who create substantially new concepts on a consistent basis.  The old, static product lives and days of lower competition are over.  Innovation isn't a "nice to have" or a "flash in the pan", it is rapidly becoming the most important skill set your organization can acquire.

For those who believe innovation does add value and can be more systemic, I say they are right, but only partly so.  They see innovation as a tool that can be used, until the next tool comes along.  This follows the theory of "waves".  There was the "wave" of quality improvement, followed by the "wave" of rightsizing and outsourcing.  Now, these folks believe, is the time for the "wave" of innovation, which will run its course and introduce a new wave of something else yet unseen.  The problem with considering innovation as a wave with a specific time horizon is that new products and services will continue to be important long after the expected time frame of the "wave" is complete.  If your investment is to simply adopt innovation as the next tool down the pike, and expect to jettison it once the wave is over, your team won't commit the necessary resources to innovate effectively.  It will be a sideline to the "real work" of the organization, eagerly awaiting the next wave or fad.

No, here's where I diverge from the discussion.  We are in a fundamental environmental shift.  The pace of change and the increase in global competition means that the way we work has to change.  Innovation isn't an interesting sideshow or fad, unless your management team allows it to be.  Innovation isn't a wave or trend for the next "x" years to be replaced by something else.  Innovation is THE differentiator between firms that are thriving and healthy today, and those that will be thriving and healthy a decade from now, because innovation isn't a fad, and isn't a wave, but is going to become a permanent way of life, a sustaining capability for the firms that understand the shift underway and adopt innovation as a cultural imperative.

If you think this doesn't matter then simply consider the culture and environment of the organization where you'd most like to work.  Do you want to work in a firm that places emphasis on the future and staying abreast of trends and new ideas, or do you want to work in a firm where the constant activity is reacting to what other firms do in the market?  The most innovative firms will attract the best people and accelerate their capabilities, becoming a self-fulfilling prophecy.  The firms with less innovation skill will atrophy because they can't compete on new ideas, and they can't generate new products and services fast enough to retain customers.

What's it going to take for us to wake up and realize that innovation is the most important skill we can gain within most organizations?  I recognize that this kind of change threatens the status quo, but if we ignore the shifts underway in the market and economy we risk a future with far fewer jobs and far fewer opportunities.

Can making something worse be innovative?

I was working with a client recently while we were considering some new product ideas.  One of the engineers on the team remarked that we should seek ways to make the product worse.  I recoiled from that suggestion, but held back my comments to see how others would react.  Remembering the brainstorming rules "every idea is a good idea" and "No judging during idea generation", I was probably wise to hold my tongue.  Because his definition of "worse" wasn't less aesthetically pleasing or more likely to do damage to a customer, but had to do with removing features and attributes that customers didn't seem to care about, to allow the firm to make the product at less cost.  Sometimes this is called "defeaturing".  My question in my own head was: yes, but is that innovation?

We typically define innovation as an idea that is brought into valuable action.  We use the more inclusive "valuable action" because schools can innovate by teaching more kids or using different teaching techniques.  Governments can innovate by delivering better services.  It doesn't have to be a product.  If we take the definition at face value, then creating a somewhat new product based on reduced functionality that makes the solution more affordable and is just as acceptable could be innovation.  But what's more important is that we occasionally forget one critical factor in innovation:  it's not about what we, the developers and product managers want.  It's about what the customers and users want and need, and are willing to pay for.

If I create an excellent product, but it is too difficult to use or too expensive to acquire, then even though it may be very innovative, it may not be successful.  The ultimate goal of innovation is to create the right solution, for the right customers just as they become aware of their needs, and are able to acquire the solution.  If my timing is too early or too late, sure, it's innovation, but I don't capitalize on the market opportunity.  Timing is critical - too early and I educate the consumers and the second and third entrants win the market share.  Too late and I've missed the chance to gain the lion's share of the market.  Aligning to the consumer base is important as well.  If I create very interesting products and services that don't meet a need in the consumer base, I may be innovative but won't be around for very long. 

Ultimately, then, innovation is about recognizing needs or opportunities before others do, and validating that those needs are important and relevant to the targeted consumers.  If making a product that is over-engineered or missed the market window more relevant and appealing to customers by removing unnecessary features, then I'm willing to call that innovation.  The folks who brought us Blue Ocean Strategy used the Strategy Canvas to look at competitive features in most industries, and argued that we could radically increase or decrease offerings in most of those features.  For example, seating choices in airlines.  The major airlines suggested that being able to choose your seat at purchase is very important.  Southwest suggested that it's not important at all, and for some consumers they are right.  In fact Southwest "defeatured" a lot of the factors around airline travel - no food, no seating choices and at one time no frequent flier miles.  Yet by simplifying they opened the door to a different class of traveler, and by scaling they now compete with the majors.

Too often we are so interested in creating the "best" product or the newest product or service that we fail to realize that many innovation opportunities are available for us if we'll only adjust our thinking.  Far too many products and services only partially meet the needs and expectations of customers.  That means there are opportunities to make products or services that are much better, and much worse, than exist today.  As innovators we are expansive and interested in the really new, when sometimes radical adjustments of the existing are what is called for.

Book Review: OOBonomics - 12 Great Outside of the Box Policy Ideas

I have the pleasure to be asked to review books about innovation, and ideas quite regularly.  Some are great, and some not so much.  But most of the books I receive have to do with innovation techniques or stories in the private sector.  So it is refreshing and encouraging to receive a book about ideas for the public sector.

The book under consideration today is OOBonomics, or Outside of the Box Economic Policy Ideas, from Al Lewis.  You can find the book on Amazon here.

Al Lewis has taught economics at Harvard, run a healthcare company and has been a partner at Bain and Company.  Needless to say, he's smart and has good insights.  Fortunately for us readers, he presents a number of policy ideas in a funny, tongue in cheek approach that makes the book interesting and approachable.  After reading a few of his ideas, you begin to wonder why none of them have been adopted.

One of his ideas for stimulating the economy, for example, is a time limited gift card.  Since a significant portion of the last stimulus checks to households have been applied to saving or paying down debt rather than boosting spending and consumption, Lewis argues that the government should send out gift cards which have to be spent at certain retailers.  In this manner we ensure that the stimulus money gets recycled into new spending, rather than into saving or paying down debt.  This is just one of twelve fairly simple ideas that could work and make the government more effective.

Lewis has a number of policy ideas along these lines that would improve the way the government works and would require very little change to implement.  His ideas are insightful and based on the way people actually work and live, rather than the way Congress imposes laws based on the way they think we live.  His book of simple changes indicates what's wrong with much of what happens today in Congress:  big, sweeping changes meant to benefit some industry or segment of the population, rather than well considered, well-crafted ideas that address the needs of the vast population.

Check out his ideas, and more importantly, try to win some money from Al as well.  On his website, www.thinkoob.com, you can enter ideas and win up to $1M if you ideas is adopted and implemented into national policy, and $500 if you idea is used in the next edition of OOBonomics.  Got to like a man who puts his money where his ideas are.

Trend Spotting - Purpose, Frequency and Responsibility

I've written before (and recently) about the reactive nature of many businesses.  It often seems there are more incentives to ignore signals in the marketplace and then conduct heroic efforts at recovery than to simply plan effectively and study trends and act accordingly.  The purpose of today's topic is to examine whether or not trend spotting and scenario planning is important and valuable (hopefully already answered) and if trend spotting and scenario planning are important, what individual or team within your firm should be focused on this work, and how frequently it should be done.

First, let's put to bed the debate (admittedly a thin one) about whether or not your organization should track trends and try to understand likely future scenarios.  The answer for most firms is a resounding "yes", especially given the increasing pace of change.  In the past you might have been able to argue that change was slow and steady, and an occasional peak in the periscope was all that was necessary.  As globalization increases and the pace of change increases, you need to be identifying trends and making sense of those trends consistently, or the disrupters will eat your market share for lunch.  Your planning efforts can't assume the future looks a lot like the present, and also must look further out in time.  You need to look further out in time because even though the demand cycle has sped up, many firms haven't improve their product or service development cycle, so if you only look a year or two into the future, but it takes 18 months to two years to get an idea through the pipeline, you are shooting behind the curve.

OK, let's assume for the sake of argument that you agree that trend spotting and scenario planning are valuable.  Then the question becomes - who should spot and capture trends, who should develop scenarios and who should interpret the results?  These questions need to be answered on two levels:  at the corporate or business unit level, and at the product or service level.

Trend spotting should be underway, all the time, as a consistent activity by a wide range of people within your organization.  Those trends should be reported to a central analyst (individual or team) who is capturing, recording and tracking trends.  This model works at both the product/business unit level and at the corporate level.  We at OVO emphasize this work at the corporate level, because work at a product or business unit level can too easily be focused too narrowly on a specific product or market or geography, and miss trends or disruptions from other sources.  We'd rather see a number of people recognizing and reporting trends throughout the organization, centralized in some team at the corporate level, who capture, report and synthesize the trends, typically in four or five categories (demographic, technological, economic, governmental).  One central repository of these trends reduces the "my trends are more accurate than yours" debates and should ensure a more all encompassing view of trends.  Of course everything I've described can be replicated in a business unit or product line, with the awareness that these are often more narrowly tailored.

If we centralize this skill, what kinds of people are necessary to capture, analyze, report and synthesize trends?  Anyone in the organization who reads, or interacts with customers or business partners, or who has an interest in what's happening or unfolding can capture and register trends.  We've set up several systems like this where anyone can report trends.  Additionally, the central team can also track and register trends.  As trends are recorded and categorized, we can also begin to identify which are important and relevant for the business, and request more insight or investigation into some trends over others.  As this is an ongoing activity, over time it becomes evident that some "trends" fade away while some are enforced.  Periodically (we recommend twice a year) a team comes together to select trends and build scenarios about a 5 to 7 year distant future.

We tend to pick 5 to 7 year futures because in many firms the selection and implementation of a new idea and the rollout of a new product can take several years, so we want to get the product to market slight early rather than slightly late.  With the pace of change as is currently experienced, trying to understand more than seven years into the future is really a crap shoot.  Using a horizon less than three years is really not effective, as most concepts will be incremental.

Who should develop the scenarios?  We believe these should be guided or facilitated by people who don't necessarily have a vested interest in the outcome.  A scenario guided by a product manager is likely to reinforce his or her biases, since they have a stake in the outcome.  Again a central innovation team acting as facilitators with a representatives from a product unit or business unit can mix the best of both worlds and ensure a relatively unbiased examination of several potential future outcomes.

Note that through all of this discussion we assume that this function exists as a continuous offering over time, not a discrete, start-stop program but a team that builds insights and skills and offers them to executives within the business.  If you want the inexpensive, low hanging fruit of innovation, here it is.  No where else can you get a great understanding of the near future and your opportunities and challenges for less cost.  The only requirement after the scenario plan will be your ability to take action.

Contact us at OVO Innovation if you'd like to understand how to do this more effectively, or how to receive training to do it internally.

How to spot - or avoid - innovators

As always, we'd like to make our readers and clients happy.  In that vein, I'd like to introduce how to spot people who are likely innovators.  In this way, you can identify them more quickly, and choose to hire them if you want to be more innovative, or you can ignore and avoid them if the status quo is more your scene.  Good luck with that strategy, by the way.

Identifying people who are innovators is actually relatively easy.  They are the ones who don't actually seem to belong the organization in the first place.

Innovators tend to:

• Reject the standard framing of a problem and restate the problem or opportunity.  Rather than work within the given constructs or framing, many innovators want to toss out the framing and start anew.  Just like Galileo, this may require working against an orthodoxy, yet nonetheless, it moves and so must we.  Those folks who are so problematic about wanting to change or expand the framing of a problem?  Probably good innovators.
• Be optimistic.  They are almost always the glass half full people.  Pessimistic people will focus far too much energy on the "problem" while innovators will acknowledge the problem and move on to find interesting solutions.  They believe the problems are merely temporary barriers to more interesting solutions.
• Look to the future for signals rather than to the past.  In most businesses, many people will ask "has this been done before" and "what can we learn from that success or failure.  Innovators want to know "can we be the first" and what signals in the market or environment give us indications that we'll be successful
• Care about solving unmet or poorly understood challenges.  Often innovators are going beyond the obvious, ordinary problems to uncover deeper unmet or poorly understood issues.  If your team is captivated by solving an obvious and incremental problem, they aren't innovators.
• Network with people different than they are.  Evidence suggests that the best innovators are people who read outside of their industry, interact with people from many different backgrounds and interests and seek to bring solutions from outside their industry to the table.  People who are very deep in one industry but ignore signals and solutions from other industries are usually not very innovative.
• Are proactive.  Innovators actively seek change while many executives are content to wait and react to what other firms do.
• Are dissatisfied with the status quo and willing to change it rather than simply accept the status quo and merely complain.
• Are very comfortable learning, trying and failing, and then trying again.  They aren't stymied by a single failure and are usually very determined to start again, reframe the problem and try a new tack or approach, learning from previous failures and incorporating that knowledge.

So, if you are in the market to hire someone and want to know if he or she is likely to be an innovator, look for these signs:

• Ask them about an existing problem that you have.  See if they are perfectly willing to accept your framing, or if they request the opportunity to reframe or change the frame entirely.  If the latter, a likely innovator.
• Ask them about existing societal problems or corporate problems or challenges.  Listen to how they approach the problem and their willingness to suggest changes or alternatives and the possibilities they suggest for change.
• In the context of a problem, what information do they seek - external, future oriented or internal information about the past?
• Can they name a big failure in their lives and demonstrate what they learned and how that failure helped them gain more insight into an eventual solution?
• Can they name five people in relatively senior positions they interact with on a regular basis who are from different industries?  Can they demonstrate an active network outside of their "home" industry?

The kinds of answers you get with these questions will tell you how strong the "innovation" force is within the candidate, and whether you should hire that person or turn the Force against them.

Innovation does not equal technology

I had the opportunity to speak to a group at a university recently about innovation.  In fact, I've spoken to four universities about innovation in the last few months.  There's a growing awareness that innovation needs to happen in university settings. This would include innovation on the administration of the university, in the teaching methods and in what is taught.  But that's a sideline to what I want to write about today.

In my most recent speaking engagement I was confronted by a senior faculty member who argued that all this talk about "innovation" was pointless, and missed the main target, which was that we needed more focus on science and engineering education.  In his mind, innovation was equated to technology, and only scientists and engineers could bring new technologies to life.  While I agree that scientists and technologists can bring innovations to market, I'd argue that that definition of innovation is awfully narrow.  It seems to me that innovation can occur in many avenues that have little or nothing to do with technology, engineering or science.

In fact OVO has recently worked with a financial services institution, a health care insurance firm, a life insurance firm and several other firms in the services industries where there are no physical products developed and few if any engineers or scientists.  Yet these firms are innovating.  Innovating their service models, customer experiences, processes and business models.  Apple, the penultimate innovator (tic) is a technology firm but doesn't innovate around technology - more around user experience, linkages and partnerships and content.

There are a number of firms that innovate around technology and science, so I don't want to downplay the importance of technology in innovation.  However, we do need to understand the balance between product innovation and all other kinds of innovation, and the importance of engineering and science to innovation.  It's really a question of set theory.  Technology innovation is a subset of innovation generally, and while all technology innovation is innovation, all innovation is not technology innovation.  As much as it may pain my engineering friends to say it, there's a lot of innovation happening that has little or nothing to do with technology.  Conversely, there's a lot of technological research that will impact our lives through new innovations as products and services.

This dichotomy also explains a lot of angst in the intelligentsia about the termination of NASA's return to the moon program and the decreasing amount of federal research generally.  The belief is, and I agree with this, that we learn more and capitalize on that knowledge when we explore space flight or invest in primary research.  But curtailing space flight does not necessarily make the US less innovative.  It leaves us in a situation where, from a governmental point of view we may become more dependent on the Russians or Chinese to put vehicles in space, or perhaps it makes available a private enterprise approach to space flight.  But reducing investment in these areas doesn't mean we are less innovative, it just spreads out the responsibility for innovation more broadly.  But that had already happened in the 70s and 80s, as private enterprise took on more direct research and investment and the federal government's role declined.

OK, enough of the tangent.  Innovation depends on creating and developing new ideas.  Some of those insights are based on new technologies or improvements to existing technologies.  Some innovation, however, is based on insights about services, processes or business models, and don't rely on technologists or engineers for insights.  To claim that all innovation is technology innovation, and that without engineers and scientists no "real" innovation can be accomplished is to view the world of innovation with a very narrow lens.