More on innovation

Pressures that create, enable and inhibit innovation

There are pressures that exist in the world that have an impact on innovation. There are also resources that are available for innovators today that in some cases are game-changing.

CapabilityReplaced byDark Room Digital CameraClay and Ceramic modeling3d printersFlatbed ScannersCellular PhonesPlanning, hosting and managing a physical conference roomAnytime, anywhere video conference roomsSymposiums and conferences devoted to innovationInnovation communities on the Internet.

The table talks about capabilities that were replaced by innovations, and in some cases, later innovations replaced the capability again. The digital camera market is in decline for the most part due to the reality of the camera in your cellular phone.

Table 2: Capabilities and their replacements

With this initial consideration of innovations let’s dive a little into some of the pressures that impact innovation.

Upward Pressure: Upward pressure has two components. The first focuses on innovation pressures from a need to create what doesn’t exist. The second one focuses on the overall impact of competition on innovation.

1. The first is the concept of a desired goal that cannot be reached with the technology that is available. A great example of this is Henry Ford and the invention of the mechanized assembly line. That simple innovation changed the rate, cost and eventually amounted of manufactured goods that could be produced.

2. The concept is simple where you are in a market that has competitors that have similar offerings. The competitor announces a major update, and you have to match that update. A great example of this is roughly 20 years old but still applies. FedEx released package tracking, and their competitors had to make major changes to catch up. The reality of upward pressure is that it is always reactive in producing innovation. You are in effect forced to innovate your model to cope with this new model.

Downward Pressure: The market is moving downward (either size (TAM) or value (cost) and innovation are required for two components.

1. The first is the traditional Boston Consulting Group (BCG)[1] Experience curve – you have to reduce the cost of the solution quickly to remain in the market. The reality of operational innovation is the acceptance of doing things differently.

2. The second is the innovation pressure – in order to escape the downward pressure of a Red Ocean[1] you have to innovate into a Blue Ocean. Interesting in that in a competitive market this downward innovation pressure can create upward pressure quickly for the rest of the market.

[1] “The Blue Ocean Strategy” W. Chan Kim and Renee Mauborgne Harvard Business School Press