Innovation is the foundation stone of business strategy

What innovation is, and how to manage it
Defining innovation as ‘the successful exploitation of new ideas’ reveals an important distinction between invention — the new ideas — and innovation — their successful exploitation. Fresh ideas are vital, of course, but ideas must hold value to become successful innovations. Value comes from economic or practical use, new knowledge, or emotional associations as in brands or reputation. Successful product innovations spin out of virtuous circles linking R&D and marketing, through which knowledge enters, flows and grows, driven by good project and people management. Innovation may also result from improvements in processes or technologies, new business models, or by patiently building the knowledge-base in a community.

Sources of innovation
What inspires innovation? One study of 200 innovations analysed their roots and track records. Successes rarely came from following trends, random brainstorming, or routine problem solving. Winners often came from chance observations. The ability to see these as opportunities demands, firstly, keeping watch on developments in technologies and markets beyond the horizons of current interests; secondly, allowing new knowledge to build on existing expertise; and thirdly, a deep understanding and intuitive knowledge or ‘wisdom’. Spotting innovative ideas with a high probability of success and weeding out likely failures means resources can be focused on a pipeline producing potentially successful products, fed by a wide, intelligent search for new ideas.

Innovation in action
Three case studies provide useful lessons in innovation. In agriculture, the discovery of selective herbicides revolutionised weed control. Work in Dutch and American universities in the 1930s identified the auxin plant hormones. Meanwhile, in the UK, ICI was investigating the effects of soil organic matter on plant growth. It realised that auxins may be present in organic matter and tests showed that b-indoleacetic acid (IAA) and a-naphthyl-acetic (NAA) stimulated the growth of roots. The idea of using auxins to boost cereal yields was proposed. However, trials showed no effects on crops, but some very distorted broad-leaved weeds were noticed and the concept moved on to weed control. However, the early dust formulations of phenoxy herbicides were not a commercial success. Innovations in sprayer technology had to be adopted for agricultural use, alongside the development of much more practical liquid formulations, to stimulate demand.

Gas chromatography theory was published in 1941 and spawned a number of DIY instruments in UK universities that subsequently caught the eye of a Perkin Elmer salesman. The US company specialised in optics and needed much convincing to move into chromatography. Improvements in speed, sensitivity and range of uses have been driven by the needs and ingenuity of users. Their ideas and technologies were cross-fertilised through publications and networking. Manufacturers gained access to these user innovations and made improvements to reliability, durability and ease of use, turning them into commercial successes.

More recently, magnetic resonance imaging (MRI) has been in the news with controversy over recognition for the ‘original’ innovation. MRI is based on nuclear magnetic resonance (NMR) technology for which Nobel Prizes were won in 1952. Medical applications were only conceived some 15 years later. MRI’s success relies on practical adaptations. These have included innovations in magnets large enough to allow whole-body scanning and the ideas which now allow the collection of spatial information. However, complexity led to patent disputes. The MRI story also includes other forms of ‘spin’ — premature claims of success occasionally bred mistrust.

Lessons
Selective weed control owed its success to trial and error plus diligent observation, creating new concepts from first ideas, and seeing the advantages in other new technologies. Gas chromatography featured the exploitation of theoreticians’ knowledge by practitioners and manufacturers, the conflict between old and new mindsets, and the value uncovered by involving widening circles of potential customers with increasingly diverse needs. MRI illustrates seeing the critical steps to the next level of innovation, securing intellectual property rights, and appropriate, effective market communications.

These cases demonstrate both step-change and continuous innovation. Importantly, they all involved collaboration, communication and complementary fits between people, organisations and technologies.
If SCI Members have any good case studies or other illustrations of lessons in innovation that can be shared, we would like to hear from you. Please contact Alan Baylis at alan.baylis@nuvistix.com.