Innovation by declaration

Based on what I've been reading for the last year or so, "innovative" has become the new buzzword. But because true innovation is a very expensive process, I think we are about to see an explosion in what I will call "innovation by declaration", where companies innovate by deciding—and more importantly, announcing—something is innovative. It is the new New and Improved for what ails the industry.

For proof, witness the latest innovation in drug delivery: holes. Yes, sir. Apparently all we needed to do to improve the delivery of drugs to the body was to simply poke holes in the sides of the capsules. By this reasoning, my kitchen colander is the latest innovation in water delivery devices.

Further proof? The University of Colorado announced in early November that it would start offering a bachelor in innovation (BI), in fields such as business administration, computer science, and electrical engineering. The standard bachelor degrees will still be available, but to get the New and Improved degree, you'll need an extra 42-50 hours of study.

"This is a great opportunity for business and engineering students to gain skills that cannot be easily duplicated as they prepare to compete in the new global economy," said Venkat Reddy, dean of UC's College of Business. Mind you, it also begs the question: If you weren't promoting innovation with the old degrees, what were you doing?

It is hard to be innovative, or more accurately, it is brave.

Small companies don't want to be innovative because they don't have the resources to take the risks involved in innovation, and their venture capital supporters have told them to stick to their strengths.

By the same token, large companies don't want to be innovative because they're making too much money off existing products or services and innovation is inevitably seen as a line on the debit side of the balance sheet, so investors don't really want to hear about it. In fact, for this latter group, you'll likely hear the mantra: "We've been in business for 125 years. We know what we're doing."

Often, companies will pay lip-service to innovation by making small changes—incremental innovations—in existing offerings. These changes can be valuable as witnessed by sustained-release formulations of drugs that improve compliance by asking less involvement of patients.

For the most part, though, I believe that these changes simply delay the inevitable. Witness the dramatic spread of multidrug resistance in microbes because companies have focused their efforts on narrow families of antibiotics.

Innovation is such a challenge because we stick to our knitting. But true innovation—disruptive innovation—comes from the periphery. It blindsides you.

A chart created by Geoffrey Moore, managing director of TCG Advisors, in Dealing With Darwin (ISBN 1591841070) suggests that disruptive innovations literally come from left field, after companies have exhausted the various product, application, and platform innovations needed to keep people coming back for more. He describes it as "the sort of thing brought to life by brilliant inventors, rebellious artists, and daredevil entrepreneurs." I believe, however, that everyone is capable of this type of thinking.

People typically spend so much time looking directly at their problems that they are stuck focusing on the harsh outlines of the situation. That's why innovation so often comes from areas outside the original field of endeavor.

By staring directly at the problem, people are unable to see the parallels between their situations and those of others around them; they are unable to accept external input. The problem drills into their retinas to the point that they develop blind spots. Innovation comes from purposefully blurring the sightlines, ignoring the hard lines in front of you and opening yourself to what is around you.

Where most microbiologists saw failure in trying to grow viruses on certain strains of bacteria, one understood that the microbes had developed a way to defend themselves from infection. That observation led to the identification of enzymes that cleave specific DNA sequences and ultimately to the genomic revolution that obsesses us today.

In some ways, I believe that this is the premise behind a recent book by Wharton School of Business Professors George Day and Paul Shoemaker, Peripheral Vision (ISBN 1422101541). As the book's subtitle suggests, they are describing the ability to detect the subtle signs that will "make or break" a company, but I think the same concepts hold true whether you are looking a new business models or new product lines.

Yes, innovation is hard. Yes, innovation is daring.

But people (read: investors) aren't stupid, and it won't be long before they realize that your company's innovations are sporting bigger holes than the latest headache capsule.