Innovation Must Create Value, not Novelty

Is it possible to be too innovative?

Helen Walters points to an interesting post by Jens Martin Skibsted and Rasmus Bech Hansen called Over-Innovation Makes U.S. Firms Suck At Sustainability, which argues that it is.

They argue that the high levels of US carbon emissions are due to too much innovation:

The heart of the problem is that American brands push more and more products on the consumer without mechanisms for re-usage. With ever-shortening product life cycles, the problem is only getting worse.

Our experience tells us that it is exactly because American companies are so amazingly innovative, entrepreneurial, and intensely competitive that they can’t find ways to deal with the global challenges. Finding sustainable solutions isn’t about discovering new, ever-more disruptive ideas. It requires the opposite, something very un-American: standardization, slowness, and centralization. To most, more ideas are always better. But in this case, the more green solutions we have, the less effective and efficient processes become.

Reading the whole article is worthwhile, so you can make your own opinion. As for me, I’m with Enrique Garibay, who tweeted this in response:

This was followed up by bbhor, who said:

Both are correct.

Here’s the thing: innovation is executing new ideas to create value, it’s not just making more stuff. It’s not about about ideas. It’s not about novelty.

Skibsted and Hansen have an example of kind of thinking that can support sustainability:

In theory, you can grow in two ways: You can produce more, or you can add extra value to what you already produce. The latter is the way toward sustainability.

Take Starbucks: Despite the company’s impressive growth, it has hardly increased the amount of coffee beans the world consumes. Instead, it has grown by finding numerous clever ways to create value in all parts of the value chain — everything from interior design, product innovation, marketing, and services. More American brands must learn that they can minimize the consumption of goods but increase total consumption at the same time.

All of those value creation strategies that they are talking about are innovations.

The problem isn’t too much innovation – it’s bad innovation. Innovation that is divorced from a strong focus on creating genuine value is bad inovation.

Umair Haque’s great blog consistently tries to address this issue. Innovation is no good if it doesn’t create deep value. Here’s what he says in his latest post:

The pursuit of more, bigger, faster, cheaper, nastier too often seems to demand putting what, why, and who we love at the end of the list, the underworld of the inbox, the bottom of the heap. That’s a recipe for stagnation, whether for people, communities, cities, countries, or the globe. But the converse might just hold, too: if nations and corporations want to punch past the glass ceiling of mere opulence, to what I call eudaimonic prosperity — lives that are meaningfully well lived — well, then people might just have to begin by making if not radically, then at least marginally more meaningful choices themselves.

The problem isn’t over-innovation – it’s under-innovation in terms of creating value. To be successful, innovation must support strategy. To be sustainable, innovation must create value.

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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9 thoughts on “Innovation Must Create Value, not Novelty

  1. I really like your thoughts here primarily because the idea of over-innovation is so counter to the current innovation dogma. Innovation is perceived as the latest competitive advantage and often equated with novelty, so why wouldn’t you always want to have more? Innovation has become such a sacred cow that it’s very difficult to have a conversation about managing it with anyone.
    In this regard, it’s interesting to observe corporate reward systems. If a company creates rewards for generating new ideas rather than delivering long term value, it will lead to the kind of disconnect between value and ideas you mention.
    I have also seen this arise as the confusion between buzz (novelty) and profit. Lots of buzz is great, but it doesn’t always lead to profit, dents in the universe, and rabid end customers.
    The book “The Other Side of Innovation” starts with an analogy I really like: like climbing a mountain, everyone is excited about the ascent and the summit, but the most important part is getting down safely and that’s where the risk lies if you’re not prepared for both phases of the journey.

  2. Thanks for the thoughtful comment Olaf.

    The point that you raise about reward systems is critical – it’s one of the reasons that I put so much effort into getting people to realise that innovation isn’t about having ideas – because if you manage based on that assumption, you end up getting everything wrong.

    That analogy is actually my favourite part of The Other Side of Innovation…

  3. Important message, Tim – and a great comment indeed!

    Another interesting post by Tom Gillis fits quite well to your thoughts above:
    http://blogs.forbes.com/tomgillis/2011/07/14/the-end-of-the-engineer/

    Though I’m not sure about the title, it conveys a true message. “Value creation correlated with customer understanding – not engineering velocity”.

    I think this is an important point too – value cannot be created isolated from the addressee, just by focussing on (technical) capabilities.

    Cheers, Ralph

  4. That’s an interesting post Ralph – thanks for the link – I had missed it.

    Although, if I were him I’d advocate learning to be an engineer that can create value – that seems to be the killer combo these days…

  5. Can I be a little bit controversial and suggest that Tim’s proposition might be the innovation version of a social-Darwinian eugenics?

    This might be a metaphor too far, but I wonder if the evolutionary processes that underpin the innovation drive can be configured to only follow value-driven paths. Is innovation not subject to the emergent and random forces that ensure variation and drift?

    I reminded of an analogy in the Schumpeterian model of the firm. The first moment of innovation is the new firm itself. The novelty of the new firm adds value to the stock of firm by contributing to the fitness mechanism for the whole population. Even if the nascent entrepreneur lays victim to himself a niche has been tested.

    So, and maybe this is an obtuse leap, innovation itself might actually need a lot of under-innovation because its is testing new niches. If those niches aren’t sustainable then the waste is limited to the impromptu efforts of novelty creation.

    I’m being provocative but I hope its also a useful intervention.

    Garry

    • Thanks Garry – I agree with all of what you’ve said. I’ve written a ton of posts here on the importance of experimentation, and quite a few on approaching innovation with an evolutionary lens. So I believe that we’re pretty well aligned in that respect.

      I think that the issue in this particular post is that the experiments must take place within a value-creating context. I’m not trying to suggest that this value can be pre-determined, but rather that outcomes should be judged based on value. That’s probably not stated as clearly as it should be in this post.