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Friday, 19 December 2014

The innovation delusion

Andy Budd is founding partner and managing director of user experience design agency Clearleft – just the sort of person you’d expected to get excited about innovation. But at recent design events he’s been warning of a ‘cult of innovation’ and how it can lead businesses up the wrong path. We spoke to him about why this is, and what it means for the research that’s supposed to support innovation.

Why do you believe there is a ‘cult of innovation’?
In large organisations I see the term innovation being bandied around very loosely. When companies are planning their next year’s business plan they’ll say, ‘We’ve got a strategy for innovation,’ but I think often they don’t quite appreciate what innovation is. If you want to be a truly innovative company, first off you have to realise that a lot of the money and time you’re spending might never result in a new product or service, which is often really hard for companies to bear, because they hope that by spending a lot of money in R&D within two or three years they’ll get this massive rich vein of content or products. Innovation doesn’t really work like that. It happens through people spending time looking at markets, looking at how people are using services, and there is a chance that from that something innovative might pop up – but also there is a very real chance that nothing will happen.

“If someone on the board says, ‘This year we’re going to have a strategy of innovation,’ no one’s going to disagree with that. You can’t say, ‘No, innovation’s bad’”

Often I see large organisations that start by saying ‘Let’s let our R&D department be really creative,’ and after a couple of years if that team hasn’t produced any brand new revolutionary products they’ll start bringing in the managers and the accountants to try and force this team who are supposed to be innovative and freewheeling into one that just churns out products.

So do you believe innovation has to occur naturally?
I think it’s something you can set up an ecosystem to encourage. Obviously hiring smart people, giving enough investment, giving people time and space to play and explore is definitely a way of investing in this idea of innovation, but you have to understand innovation is a long-term thing.

For a lot of big organisations, their culture is very different from the culture that innovation comes from. The reason start-ups are successful is because they’re operating outside the normal corporate environment and they’re very agile; they’re able to respond quickly to market changes. But when these organisations get really big and have to worry about existing revenue streams their ability to innovate gets dampened.

The other thing is, a lot of people think innovation is about creating something from nothing, it’s this spark of genius. Actually most of the time innovation doesn’t even exist, because it’s people building on products they’ve seen before. You look at people like Apple who are lauded for how innovative their products are – the iPod, the iPhone, the iPad. The reality is, the iPod isn’t that innovative –  the first MP3 player was out years before the iPod ever manifested itself. Everybody now is running around with iPhones, but Apple weren’t the first company to create phones. You look at people like Sir Clive Sinclair, whose idea of an electric motorised vehicle was heralded as this great innovation, and yet nobody used it. But 20 or 30 years later, everybody’s talking about green technology and innovative electric devices. So what you often find is that the innovators are the ones who create the technology, but it takes a designer to understand the impact of that innovation and package it in a way that users actually want.

“Innovation is not always a key to business success. It’s often a key to spending an awful lot of money and preparing the market for other more successful products”

Why is there this fixation with the idea of innovation if it’s not really what’s happening?
Because it’s easy. If someone on the board says, ‘This year we’re going to have a strategy of innovation,’ no one’s going to disagree with that. You can’t say, ‘No, innovation’s bad.’ But people don’t understand what it really means, and innovation is not always a key to business success. It’s often a key to spending an awful lot of money and preparing the market for other more successful products. I think this race to be first to market is often a bad move, and a lot of products I’ve seen that are second or third or fourth to market are the ones that understand the market, that see where people have gone wrong and make those improvements.

What examples can you give of things that are innovative but only became successful because of good execution or good consumer understanding?
I think the two are often mutually exclusive. Lots of products that are incredibly successful like the iPhone or the iPod, are successful because they’ve built on other people’s innovative products. Touch sensitive screens are not an innovation that Apple produced, but Apple understood them and they perfected them. Mobile phones or MP3 players are not technology that Apple produced, but they understand how to use them and manipulate them because they’re industrial designers.

The big company everyone says is innovative is Google. People say, ‘Look at Google, they’re innovative. If Google’s strategy is to innovate, then our strategy should be to innovate as well.’ There’s a couple of fatal flaws with that. First of all Google hire the smartest people in the world to work for them, and they are in limited supply. Secondly, they have a strategy of innovation in the company and they allow everybody in the company to spend 20% of their time on pet projects. With a company that has several thousand employees, all of whom are really, really smart, you would have expected that Google would have hundreds of brand new innovative products coming out every year. And yet if you look at the results that’s not the case. Many of their most successful products are bought in - they tried to do an online video service, failed, bought YouTube. They tried to do an online marketplace, failed. They tried to set up their own social network, which works pretty well in the developing world but doesn’t have any kind of impact on Facebook in Europe or America. Their really big innovation was an algorithm for ranking search results. So even one of the biggest most powerful companies in the world, with 20% of time dedicated to innovation, shows you that the number of failures to innovate is pretty high – and these are just the ones they’ve agreed to push out there.

“Innovation has a sort of mysticism about it, almost like a magic formula”

I’m not saying that you shouldn’t innovate because of failure, but if you do have a commitment to innovate, you have to expect that you’ll be doing it for a long time, and you’ll have lots of failures. And most companies do not like failure.

What do you see more of – companies trying to innovate in a misguided way or businesspeople talking about ‘innovation’ as a meaningless buzzword?
I think the two are related. I think a strategy of innovation comes down from the board, and at that level it’s often used as a meaningless word, and that is then implemented really badly throughout the organisation.

What tends to happen is people in a corporate setting will often spend so much of their time and money visualising what the future in ten years will be like, and building what the future in six months will be like, they miss that important middle ground of envisaging products in three to four years and designing them properly. I think what organisations need to do is actually invest in design, because my opinion is that design – industrial design, product design – is where all of the great products come from. It’s where the iPhone comes from, it’s where the Dyson Airblade comes from, it’s where all these beautiful products come from.

What’s the role of research in this? Is it a help or a hindrance?
I think that, rather than understanding demographics we need to understand psychographics. We need to stop asking people’s opinion, which is what a lot of market research is about, and look at people’s behaviour. So I’m very interested in how ethnographic research can feed into product design. Understanding not the incremental changes that people want now, but trying to find new classes of product through observational research. To give people not the products that they’ve not been asking for, but that we know they would be wanting. This isn’t to belittle users – there’s been a lot of psychological studies to show people don’t really know what they want. But by observing people using devices, and observing people in their environment, we can make hopefully some fairly smart choices.

Innovation has a sort of mysticism about it, almost like a magic formula. I actually think good design is 99% perspiration, it’s a lot of hard work. There is a process, there’s a series of steps you can take that start with research and end with well-designed products that meet the needs of the users. And it’s only through this hard work and this process-driven slog, sometimes, that you come up with really great products. So I think organisations would really benefit from investing more in research and giving their design and product teams the time that they need to create something that is truly a classic.

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Readers' comments (3)

  • Some good points here, but perhaps too much focus is given to the "invention" side of innovation (unsurprising, given it is written from a design perspective). As Steve Wozniak has said, getting an invention to marketplace is as important as the product itself. Often, too little is focused upon the nuance of implementation - not just in product design but in promotion, distribution and all other aspects of the marketing mix

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  • Interesting article; it would help if, like business, Mt Bidd learned the meaning of the innovation. Spoiler: it's not the same as invention...

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  • I think think Andy Budd is right in his assessment that product innovation is a long term game and more businesses fail than succeed.

    But if we take Apple you have to realise that clever marketing and PR are equally important and this is really where market research ads value.

    Aside from this I also think that consumers will more directly be part of a company's innovation process as has been proven by Dell's ideastorm and others.

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