Wednesday, January 12, 2011

Is Innovation an "unqualified" good?

I love blogging, and I love blog comments even more.  I get a chance to interact, at least from a short text perspective, with people who agree, and who disagree with my writing and points of view.  There's nothing better than a dispute or debate over ideas.

One of the comments on my recent post "Why innovation makes executives uncomfortable" asserted that I have a bias that innovation is an unqualified good.  That statement, and the issues that arise with it, are worth more than a blog post, but that's all I'll have time for today.

The key question is:  Is innovation an unqualified good, and do we innovation consultants have a bias that leads us to think all innovation is "good"?  Let's unpack, shall we?

First, I believe in Schumpeter, who defined capitalism as creative destruction.  Moreso, I think innovation itself is creative destruction, which means that for every really interesting, disruptive idea, there are winners and losers.  Instead of ignoring Apple, as the commenter suggested, let's use iTunes as an example.  iTunes is clearly and innovation, good for many people who wanted to share and manage music effectively.  It was also good for Apple and Apple shareholders.  The other side of that equation, since matter can be neither created nor destroyed, is that someone probably lost.  Those "someones" were Tower Records and other music distributors.  Those firms that were in the business of distributing music on physical media have been hurt by the creative destruction of iTunes.  So, while a rising tide may raise all boats, innovation isn't always an unqualified good.  Someone's ox will be gored.

The real question is why Tower and others refused to see a growing demand for managing music as digital content.  It's entirely possible that the music publishers or distributors could have developed a music sharing platform that would have solidified their position, and made the iPod an interesting MP-3 player rather than the center of music distribution.  However, nothing is more inevitable than a good idea whose time has come.  Tower chose to double down on traditional music distribution while their consumer base was shifting its desires and preferences.  Whether iTunes, Napster, Pandora or some other music management system was the winner, music distribution was going to change.

So, innovation is typically an unqualified good when you are creating the disruption, but it may not look so inviting when the comfortable market you've developed is disrupted from underneath you.  There are winners and losers in innovation, just as there are in life.

So, innovation isn't necessarily an unqualified good, although there are other examples where innovation brings social benefits that didn't exist.  For example, new ways to clean water for drinking or new mosquito nets to reduce malaria.  But even in these situations the innovation replaces some previous method for cleaning water or reducing malaria.  Creative destruction again.

So, let's turn to the second assertion - innovation consultants always promote innovation to their clients.  That's probably true, for several reasons.  First, as an innovation consultant, it's how I make my living.  I'd like to think that I try my best to work with firms that need innovation, and I have turned down work that was merely window dressing or poorly defined.  Second, what's the alternative?  Remaining stuck in the status quo is a recipe for slow death.  If your firm doesn't innovate - create new products, services, business models or processes - it will slowly wither away, and other firms will innovate.  The Luddites in the 17th century tried to stop the mechanization of the weaving industry.  Perhaps our lives would have been better without mass production, but many mill owners had a choice, and chose to bring more and more technology into the mills.  We can't stop progress, and we can't govern the rate of change.  We can either choose to participate - intelligently - or we can wait for others to do so.

Let's not assume that innovation consultants or innovators are Pollyannish, if that's a word.  We recognize that innovation is difficult work, but we hope it achieves a real benefit for our customers.  We also recognize that if there are "winners" in an innovation game, there are also "losers" - the products, services and markets that are being replaced.  However, innovation is agnostic - anyone who chooses to can innovate.  It's not a tool for the rich, or the well-connected, and many of the people we hold up as innovators started with little - H-P for example, or Apple, or tried and failed several times before becoming successful.
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posted by Jeffrey Phillips at 10:40 AM


Anonymous Thesis Writing said...

This comment has been removed by a blog administrator.

8:29 PM  
Anonymous Mike said...

Good point. Whether it's good or bad it's reality, and to survive we have to deal with it.

9:46 AM  
Anonymous Brijendra Dharampuria said...

Innovation is an unqualified good until people are not familiar with it. But, after getting popularity and being well known it move to qualified good and also accepted by other people as well.

11:08 PM  
Anonymous John W Lewis said...

That is, surely, a fundamental and extremely difficult question to answer.
Overall, we suppose, change is inevitable; and if innovations that occur are pulled by demand (rather than pushed by command) then, on balance, they will satisfy those demands. But do they?
Is innovation management the new change management? And is the distinction that change was imposed, whereas innovation is exposed?

1:58 PM  
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