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If Innovation is Your Only Card, Don’t Play it

Innovation is important to business — and increasingly so as market needs have become more demanding in light of advancements in social, mobile and cloud-based environments. Even the Enterprise 2.0 Conference, a leading event on all things enterprise-y, this year changed its name to E2 Innovate in order to reflect these shifts.

But as the need for innovation accelerates, so does a general misunderstanding of how to apply it. Indeed, “innovation” is becoming a buzzword, and as anyone who’s been hanging out in the tech industry for just about any amount of time can tell you, that equals foggy misuse and, even worse, overindulgence.

Innovation Only = Boom Splat

While being ahead of the competition is definitely something you want, focusing all of your energy on that one ambition risks allowing innovation to be the news itself.

Bruce Levinson, VP of brand strategy at Anthem Worldwide, named a couple of examples in a recent Fast Company article, including Listerine PocketPaks breath strips. I was still in high school when the company rolled them out in 2001, so I can personally vouch for their immediate and tremendous popularity (teenage approval being the ultimate measure of success, obviously). To Listerine’s credit, it’s true the strips reinvigorated the brand, spread much-needed awareness and birthed a slew of copycat products; but, with the honeymoon phase long gone, annual sales have dropped from the initial $175 million to roughly $25 million. What was once a trendy and seemingly promising product is now considered by many — myself included — as turn-of-the-century nostalgia.

“Listerine Pocketpaks were so closely associated with a product form, rather than a brand equity, that it lacked the authority to sustain a category leadership position,” explains Levinson. “The brand may have been more successful had it pinned its brand proposition on, say, Listerine freshness to-go or intimate togetherness or anything other than the product form itself, which was quickly copied.


“It’s always best to build equity that elevates the conversation to emotional benefits, values, and beliefs, rather than a purely functional one. That’s much harder to copy.”

Copycat Innovation = Splat Splat

Before we treat copying innovation as a viable business model, let’s consider the sad tale of Hipstamatic. Sure, Instagram essentially mimicked the digital photography app by providing various vintage-y filters and immediate gratification, but its creators also managed to leap-frog the product by tacking on what Hipstamatic had left out: a social element and a much friendlier price tag. By the time Hipstamatic realized it had to “catch up” it was already too late. Though they tried, they couldn’t provide anything consumers didn’t already have.

Fast Company recently published a three-part series on the downfall of Hipstamatic (No Filter: How Hipstamatic Pivoted Into a Flat Spin), but I think what it boils down to is quite simple.

“For a startup that prides itself on the originality and creativity of its users, Hipstamatic spent much of 2012 chasing many other companies’ ideas,” writes Austin Carr, before plugging the following quote from Hipstamatic founder, Lucas Buick: “I can honestly say that there was a lot of talk about Instagram, Path, and social. Ultimately, that’s what shifted our focus away from who we really are.”

No Innovation! (?)

I was lucky enough to catch Clay Christensen, Professor of Business Administration at the Harvard Business School (HBS) and author of The Innovator’s Dilemmaat this year’s BoxWorks conference in San Francisco (coverage of that here if you’re interested). In his talk, Christensen dismissed innovation, labeling it a job-killer and even putting the future of HBS into question. Instead, he argued for the importance of creating a product or service by way of understanding the job that customers are trying to accomplish.

Christensen used IKEA as an example of a company that by now probably should’ve been disrupted — except there’s no cost-effective way to copy or improve upon their model. He went on to explain that this is simply because IKEA entered the scene with a true understanding of the job their customers want to do: furnish their place that same day. They then optimized their entire store flow and shopping experience around that one want.

So, what can we learn from all of this? I think it means that companies have certainly got to roll with the punches, and part of that is strategically innovating and changing at a continuous pace. But to Clay’s point, staying afloat is about much more than the razzle dazzle and the desire to be the next big thing — it’s about keeping tabs on the other basic fundamentals of business: customer needs, a strong team, a clear vision, etc.

As eBay CEO John Donahue says in this interview with ZDNet, “The balance of those two things is what makes it fun and what makes it interesting.”

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