The Wall Street Journal Makes a Stand Against Innovation Inflation

Microphones at a PodiumThe Wall Street Journal came out with a article that makes public what innovators have been saying for years; innovations are much more than a product extension or upgrade.

The overuse of the term innovation by corporate America is an indicator that executives still don’t appreciate it. A product extension can be a different color or flavor; a modification on the same theme. You haven’t changed the functionality, cost or quality. It affects nothing in a significant way. An innovation is the introduction of something entirely new, a new category, a product that disrupts an existing category, entirely new functionality or a cost savings so significant (usually > 50%) that it upends the market.

Professional innovators also understand that the nature of a new product is disconnected from it’s market acceptance, growth and profitability.  Many product extensions have become break-out hits (for example Taco Bell’s Dorritos Loco Tacos).  While just as many innovations have become costly failures (the Segway, Pets.com, Breakfast Mates, Frito Lay Wow Chips and Microsoft’s Zune come to mind), or perform just as well or as poorly as any other product on the shelf.

Executives understand that ‘real’ innovation is expensive, time-consuming, risky and rare. The tendency toward hyperbole has created Innovation Inflation, where almost any new product introduction is marketed as a breakthrough, ground-changing, and innovative.  Yet spending on innovation (both private and public) in the US continues to fall as foreign competitors (particularly in Asia) are reaping the rewards of increased product development budgets (Samsung Electronics, for instance, now ranks second among new patent winners, up from ninth a decade ago).

The underlying concern is that corporate leadership management of the new product development process reflects unreasonable expectations. Increasingly, innovation organizations are seeing their budgets cut and resources trimmed, while the expectations of new products are raised. This mis-alignment has real-world consequences. Innovation organizations are subjected to further cuts, commensurate to their under-performance, forcing CEO’s to try to pass off meaningless product extensions as worthy of customers’ attention.

Via The Wall Street Journal

photo credit: opensourceway via photopin cc

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