One of the biggest innovation myths out there is that the iPod was a new product, write Tim Coffey, Dave Siegel and Mark Smith in ‘Innovation: Myths and mythstakes’ (www.macmillanpublishersindia.com).
They explain that every single piece of the iPod product already existed and in fact was sourced elsewhere by Apple. “There was absolutely no innovation involved with the product. Ah, but the true innovation was the iTunes business model, which every competitor and analyst deemed insane, by the way.”
As the book recounts, Apple’s business model called for generating revenue not just through the sales of iPods, but also through convenient, relatively low-priced sales of downloadable content through iTunes.
More than R&D
What the authors find interesting about the ramp up to the iPod is that Apple’s R&D spend relative to sales was ‘steadily dropping from 8 per cent in 2001 all the way down to a measly 3 per cent in 2007.’ This, even as Apple’s stock price was up more than 2,400 per cent during that period!
Lest you infer that R&D is going to go away, the authors clarify that while R&D will continue to have its vital role in the sphere of new ideas, what will be playing an even bigger role in creating value and wealth going forward is not the products but the models.
Innovation is about more than R&D aver Coffey et al. “You just have to figure out how to measure the way you invest in and reward innovation beyond R&D. Because the fact is you can measure innovation outside R&D. It’s not a black art.”
They instruct, therefore, that it is not the money spent in R&D that guarantees the best overall performance in innovation, but rather a company’s capabilities, and that usually comes down to the genius of human capital.
ROKR tale
Elsewhere in the book is a story of contrast, about how even Apple, with its phenomenal iPod, iMac, and MacBooks, has had times in its 30-year history where wonderful mousetraps turned into super flops due to issues with compatibility, complexity, trialability, and observability. “Do you remember ‘Apple Cyberdog,’ the answer to Internet Explorer and Netscape Navigator in 1996?” the authors ask.
Another example they mention is the Motorola ROKR. “Technically speaking, the iPhone is not Apple’s first mobile phone. In 2005, Apple partnered with Motorola for the ROKR (say it with us: ‘rocker!’) phone,” the narrative begins.
The widely-anticipated product featured an MP3 player with an interface similar to the iPod, and allowed users to play back music purchased from the iTunes store; and it had great specs for its day (512 MB memory), plus Bluetooth, a bright display, and a Micro SD card for memory expansion, the authors describe. “It was the best mousetrap in the history of phones, right? The marketing just didn’t strike the right tone and within a year the ROKR was disconnected. Permanently.”
First vs second
Talking about mousetraps, a common question can be whether it is the first or the second mousetrap that wins. Consider Xerox, the authors note. “It was, in fact, the first to launch a photocopy machine. And it dutifully created a multi-billion dollar company selling photocopiers to a niche market of big corporations.” But the problem was this – it became so good at selling to a niche market that when competitors tried it failed to beat them at their own game.
For instance, “Canon came along and created a photocopier for small businesses and home users. Canon was so successful at producing a copier that was less expensive and less complicated that it captured the mass market and significant portions of the niche market.”
Not too differently, Amazon, eBay, Schwab, IBM and Microsoft were not the first to innovate, but over time they outmanoeuvred their rivals, Coffey and his co-authors observe. “They were so successful that most people cannot even remember who was first.” The moral, hence, is that innovation is a series of sprints, the authors advise. Winning the first does not guarantee that you will win again, they caution.
Curiosity, balance
An insightful section in the book lists the four characteristics that a Chief Innovation Officer should have in order to be successful. First in the list is ‘curiosity,’ because it is at the heart of innovation, the authors argue. They reason that curiosity propels you to discover new things, lets you hear old ideas in new ways, and lets you see things differently than others. “Curiosity is something we are all born with but, sadly, we seem to outgrow.”
Next in the list is ‘balance,’ because innovation leaders need to be creative but not crazy. The authors state that most great innovators still know when it is time to go home and still know how to keep their teams fresh and not overworked. “Overwork will cause teams to settle. Settling is the last thing we want when we are looking for that extra-brilliant unique idea.”
Maverick, math
The third characteristic is that the innovation leader has to be a maverick; for, to be effective, he or she will need to have the guts and the ability to go against the grain, to buck the trends and most importantly to say, ‘Why not?’ the authors urge.
“Since innovation involves meeting a need in a new way, it requires leadership from someone who welcomes the idea of doing things differently. And doing things differently, and getting others to follow means going against tradition and politics – a very tough test.”
The fourth and final attribute of successful innovation leaders is that they get the math right; the numbers, that is. Why so? Because there is far too much risk in business today to invest money in an uncalculated dream, and the old ‘trust me’ plea doesn’t work in today’s tougher economy, the authors warn. “For an innovation initiative to gain the support it needs, the key decision-makers are going to want to know how much money they are going to make. And, of course, how much money it will cost.”
Gaming in schools
Towards the end of the book is a section on gaming and the new company it has started getting, as exemplified in Nintendo being invited into American schools. If you wonder that with all of the bad press that gaming gets from parent groups and teacher associations, and with pressure from juvenile diabetes organisations that sitting on your duff playing games is the problem, who could imagine the two sides sitting down to broker a peace, the authors describe how with the Wii you don’t sit on your duff, and that Wii games have less to do with themes like stealing cars and shooting guns and more to do with harmless pursuits and sports.
“Wii Fit opened the doors to fitness, and Wii Music now quite convincingly stakes its claim to educate youth. It will not exactly teach kids how to play music, but it will at the very least create an interest in music by engaging them with some key concepts in a format they find appealing, in much the same way that Wii Fit didn’t provide jogging instruction, but rather, convinced folks that jogging could be more fun and immersive in the first place.”
The authors report that teachers are already lauding Wii Music because it requires students to use language skills, spatial awareness, and hand-eye coordination. Also that it is the ultimate win-win because it adds a love of music to children’s lives, while at the same time being educational.
To Coffey et al., these kind of activities are ‘accidental learning’ occasions, because when you are having so much fun, you do not even realise you are being taught something new. “Not a bad way to help kids discover their own creative voice…”
Ideal year-end read.
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Tailpiece
“When we ‘unleashed’ our staff and exhorted them to be innovative…”
“The first idea you got was to un-boss the office?”
“That’s right, but we had pre-emptively sent him on a long holiday!”
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