The purpose of innovation

Martin Recke

Where there is danger, the rescuing also grows. We hope for innovation, and this hope is poised to be fulfilled. It's the purpose of innovation.

Innovation often happens where we don’t like it or don’t expect it. 2020 has been shaped by a terrible discovery: the novel coronavirus. It wasn’t truly unexpected — people had been warning of a pandemic for years — but we collectively failed to listen to Cassandra’s voice. However, this more or less novel threat has also spurred another huge innovation in the closely-related space of vaccines.

As 2020 draws to a close, humanity finds itself on the eve of the launch of several different vaccine candidates. Innovation was manyfold: what normally takes years or even decades was accomplished in mere months, new technology like mRNA was introduced, and the regulatory process, production and distribution all speeded up. As Azeem Azhar rightly asked this week:

“What would happen if we harnessed this pandemic mindset and applied it to other less visible pandemic-scale problems on our doorstep?”

Climate change is only the most obvious example. But this apparently successful innovation – launching multiple vaccines in a very short time – could also spell the end of a period of stagnation, and the catalyst would have been a major crisis once again. Also, we can already expect the cycle of innovation to speed up as well. The initial phase, which is called market-creating innovation in Efosa Ojomo’s parlance, will soon be followed by a second phase of sustaining innovation.

At this point, it will be all about making good vaccines even better (and weeding out the bad ones).

Purposeful, focused change

The coronavirus vaccine in all its different flavours might well turn into the first truly global product. The sheer scale of production and distribution will be massive, requiring a third type of innovation: efficiency innovation. Humanity will learn a lot through this entire process, and we might even see byproducts like protection against other coronaviruses which cause the common cold. But be sure, we’ll see a lot of failures as well. Innovation can fail for a variety of reasons, and most innovative projects do just that.

Innovation is a risky business, and that’s already in the definition of the word. But it also is the antidote to the commoditisation of products, which inevitably happens in the last phase of the cycle (efficiency innovation). Today, we’re already seeing the commoditisation of customer experience (CX). Digital interfaces and consumer touchpoints have reached a quality plateau. It has become very hard to differentiate a product through its customer experience. Innovation has to happen elsewhere.

Peter Drucker defines innovation as the effort to create purposeful, focused change in an enterprise’s economic or social potential. This definition, published in 2002, is a classic, and it even includes the purpose, which has gained much attention recently. If the purpose is crystal clear, like it is, to stick with our example, for a vaccine, then change can happen. The important point is: innovation takes both time and effort.

Product is another word for innovation

Regarding the vaccines, we’re now at a point in time where the iPhone was in January 2007: After Steve Jobs unveiled the product, it still took almost six months until it finally hit the shelves, and then some years to grow into the massive success it has been so far. Pre-orders for the vaccines are huge, pre-production is huge as well. For these reasons alone, the adoption curve will probably be steeper than it was for the iPhone, so far the only product that comes close.

The vast majority of innovative products needs more time than the first-generation vaccines, both for development and for adoption. It took years of sustaining innovation to get the iPhone from where it started to where it is now. It took a quarter-century for Amazon to grow into the behemoth it is today, and for Bezos, it’s still day one. This means that Amazon doesn’t work along the lines of the “department of innovation” approach. Instead, the organisation quickly adapts to changing situations, as it has done this year.

Here’s a caveat: An organisation shouldn’t embrace change as an end in itself, but as a means to an end. Innovation is another word for change, and product is another word for innovation. The outcome for the customers and their needs or wants is the product. And since customer needs and wants change all the time, products need to change as well. According to Peter Drucker, marketing and innovation are the two basic functions of any company, “all the rest are costs.”

The field is vast

Marketing and innovation can’t be separated although it’s often done, to the detriment of both. If the product doesn’t fit the market, the marketing department quickly degenerates into a cost centre. In that case, marketing spending works like a tax on bad products, and on the separation of marketing and innovation. However, if the two functions are integrated, marketing can get more efficient, freeing up money to invest in even more innovation. Thus, the CMO should get into the driver’s seat for product innovation.

The field is vast. We are facing enough big challenges that are worth solving, purposes worth working towards, with commercial success. Innovation can and should play a major role here. In the words of Azeem Azhar:

That old catchphrase, “another world is possible” seems strangely apt here. At the beginning of 2020, who would have thought we could achieve medical breakthroughs such as the development of these vaccines as quickly or as cheaply as we have. Looking at the planet-wide pandemic-scale problems that define our future, what will we gain if we embrace the urgency, creativity, constructive competition and collaboration of the pandemic mindset?

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Photo by Olena Sergienko on Unsplash