The failure of innovation

FIRST BUT FORGOTTEN: The IBM Simon smartphone had a touchscreen and e-mail capability, back in 1993.

By Lee Yu Kit

Is it enough to be innovative to be successful?

Innovation … it’s a frequently encountered buzzword, appropriated by everyone from politicians to chief executive officers and all the way down the pecking order.  That’s understandable.

Enormous economic value is attributed to the innovativeness of companies and governments. The glitterati of the tech world – the Googles, Facebooks and Apples – are widely perceived to be innovative companies.

The poster child for innovation is often held up to be Silicon Valley, which has created a multibillion dollar industry affecting all aspects of our lives, from what was essentially land under fruit orchards.

One government after another has sought to recreate this magic formula, setting up tech-parks, innovation labs, incubators, and a host of other facilities.

There’s plenty of evidence though, that although you can create the conditions for innovation, you cannot command someone to innovate.

Innovation is an equaliser?

The basic premise for all this is that innovation leads to success and economic value, growth, advances in human civilisation, etc.  Yet, if we pause for a while, there is plenty of evidence that innovation does not always lead to success.

History is littered with any number of innovative ideas and products that either never took took off or took decades and multiple iterations to reality. You may be able to think of some yourself, but like the four-wheel steering in cars, Apple’s Newton PDA to Sony’s Betamax were brilliant ideas and concepts yet were not wildly successful.

In fact, many wildly successful companies didn’t even have to be very innovative. Apple didn’t create the smartphone with the iPhone. IBM did, with the IBM Simon in 1993.  Microsoft’s world-dominating Windows adopted its graphical user interface (GUI) from Apple’s MacIntosh.

Apple got the idea from the now-famous visit by Steve Jobs to Xerox’s PARC where he first saw the GUI and the computer mouse in operation. Similarly, the inventors of the world’s first spreadsheet, Visicalc, did not go on to become millionaires even though the electronic spreadsheet is now pervasive.   

The lesson is obvious, though it’s not one we like to hear: although much of the advances in civilisation have been driven by innovation, innovation by itself is no guarantee of success.  (In an interview in 1996, Steve Jobs quoted Picasso: “Good artists copy, great artists steal”).

Given a multitude of innovative ideas, many, if not most, wither and die while some bloom and succeed to become world-trendsetters. Nature has the right idea:  plants generally produce a lot of seeds, of which only a small proportion will actually grow, eventually, into trees.

The different innovation

For innovation to succeed, there are a host of other, accompanying factors.

These include developing an ecosystem, lots of hard work, a fierce and passionate belief in the innovation, and yes, a bit of luck.   On the ecosystem, remember how Microsoft back in the 1980s built an ecosystem of developers who wrote applications that ran on the Windows platform? 

In other words, their ecosystem beat out that of Apple’s with world domination of the PC market at stake.  More recently, think of Apple’s carefully-designed ecosystems built around its iOS platform.

In fact, entire ecosystems are developed and built around platforms, in the modern era.  Why would Google pay US$3.2bil (RM11.7bil) for Nest  which builds smart thermostats?

It is not how many smart thermostats can be sold to recoup that investment, but rather the platfform of interconnected things, and the ecosystem it attracts.

There are different kinds of innovation. We often think of product innovation, as in a new product. An example is Apple’s iPhone, and iPad, which have in and of themselves, spawned entire new industries.

There’s also Operational Innovation, which is tweaking or reimagining the day-to-day operational aspects.

An early and obvious example is Henry Ford’s car assembly line, which revolutionised mass production, while a more recent example is Toyota’s much vaunted just-in-time system, which did away with inventory holding costs, among other things. Another form of innovation is Business Model Innovation.

Examples are the direct factory to consumer model behind the success of companies from Dell to Xiaomi, and another is the M-Pesa mobile payments system by Kenya’s Safaricom, which essentially bypassed the entire banking infrastructure by moving banking into the hands of telecoms companies.

There are a good many lessons to learn about innovation, and because the technology industry regularly and rapidly undergoes reinvention and disruption, it’s a particularly fertile ground for innovation. The next time you have an innovative idea, remember that it’s not enough to have a great idea.

There’s a long way to go from the idea to the successful execution of an innovative idea, and if you fail, don’t be discouraged, because you won’t be the first.

Lee Yu Kit is the chief technology officer of IBM Malaysia Sdn Bhd.