What innovates?

So many marketing organizations try to un-code the secret of innovation, some with decent success (e.g. Apple, Google, P&G), most fruitlessly and without real impact. I won’t pretend to know the final answer, but it might help to look at core sources of innovation that drive marketing.

Three categories seem to generate the most innovative impact:

• Technology still provides an incredible fertile ground for consumer oriented innovations. It starts with consumer oriented products like the iPod, Search Engine technology a la AltaVista or Google, and goes to more infrastructure oriented products like the latest campaign management solution or web based analytical applications.
• Consumers: Here it’s much more difficult to pinpoint one individual innovation, but consumers do innovate everyday marketing solutions, either through their participation in the R&D process, feedback to companies, or by building a particular demand for smaller and smaller gadgets. If I would pick two interesting and recent consumer driven innovations, I would vote for mass personalization (e.g. Nike shoes, personalized M&Ms), and Co-Creation where the Consumer becomes part of the Product or Service Creation process (e.g. Lego’s strategy of launching newest product line)
• Marketing Individuals: Great visionaries with an open mind are still a very important source to drive innovation. If it’s Richard Branson with his Virgin Empire, or start up founders with small or big business success (from BlueMartini to Space.com). Interesting enough there are not that many advertising personalities who could be regarded as true Innovators.

After understanding these three major innovation sources, every marketer faces a three-fold challenge: How to tap into any of these innovation sources? How to cultivate them? How to keep them as a competitive advantage? To attack these challenges, I recommend a very simple first step: Analyze how many true innovations did your organization generate over the last 3-5 years! If you were able to find any, cluster these innovations into the three sources described above. After these 2 simple steps, you will be able to better understand how innovative your organization has been in the past, and where do the main innovations come from.

Best-in-class organizations started long time ago to not only measure their innovation level with several metrics (e.g. number of patents or new products) but also have a clear process to nurture the three sources of innovations. One of the more interesting examples is Best Buy’s collaboration with several West Coast Venture Capitalists. Best Buy attempts to benefit from the Silicon Valley innovation kitchen by tapping into a lot of aggressive and very innovative start-ups. If you have seen any other interesting innovation approaches in the marketing industry, please feel free to share.