Can making something worse be innovative?
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.