Scenario 1
In the late 1970s, a scruffy bunch of college dropouts left their garage and approached a large computer manufacturing and technology company with a proposal. They simply said “We have this cool new software system that we think can change the way computers are used. We’d like to talk to you about selling you our system. We’ll even come to work for you to help.” As a result of their efforts, they were offered a licensing agreement instead and were sent home. As an innovation consultant, what would your reaction be to both sides (the college dropouts and large computer company)?
Scenario 2
It’s the early 1990’s. You are the president of a major bank. One afternoon your salespeople come to you with an idea. They talk at length about a new financial product, one that will make the bank a bundle of money. It is a variation on something the bank has done for years in the secondary mortgage market – packaging up mortgages and selling the bundles to investors. They call this new product the “Subprime Mortgage.” As an innovation consultant, what would your reaction be to both sides (the bank president and sales/marketing team)?
Scenario 3
The year is 1994. The regular use of the Internet is still in its infancy and its use as an e-commerce platform hasn’t yet been taken advantage of. Jeff, a recent career-changer from finance to business owner, decides to sell books out of his garage. Jeff knows that he needs to find an innovative solution to sell these books and thinks about using the new and unproven “Internet” to reach as many potential customers as possible. As an innovation consultant, what would your reaction be to Jeff’s idea?
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Our lesson was as follows:
Lesson Notes What is Business Innovation?
Four major types of business innovation:
1. Radical Change to Products and Services
Examples of a breakthrough product: the automobile, laptop computer, ATM machine, the iPad
2. Radical Change to Processes
Examples of breakthrough improvements in processes: assembly line automobile production; Lean Manufacturing, a process for greatly reducing waste
3. Incremental Improvement to Products and Services
Examples of incremental change to products: Microsoft’s Windows 7; Apple’s second-generation iPad; niche food products (e.g., 10 kinds of tomato sauce).
4. Incremental Improvement to Processes
Examples of incremental improvements to processes: adding technology to replace people in a section of the production cycle; reducing water usage in the production of food.
Strategic innovation – To be successful, a company’s culture, processes and infrastructure must all be supportive of innovation and it must accept the frequent failures on the way to radical innovation.
