Innovation Snobs

Let’s get a couple of things straight, right from the top: 1) I’m not against innovation, and 2) I apologize in advance to anyone who is offended by the title of this post, thinking that I’m referring specifically to them.

It’s just that I don’t see it as the cure for and salvation to everything. And, sorry, but there are some innovation “snobs” out there.

These innovation snobs continually harp on: 1)  How firms need to “innovate” their way out of just about any problem or situation they get into, and 2) How firms that don’t “innovate” are somehow missing the boat, or doomed to fail.

Sadly, innovation snobs often fail to understand a couple of things.

First, is the difference between product and organizational innovation. This difference is spelled out very well in a whitepaper from Harvard Business School professor Gary Pisano called The Evolution of Science-Based Business: Innovating How We Innovate. The paper states:

Alfred Chandler taught us that organizational innovation and technological innovation are equal partners in the process of economic growth. Indeed, one often requires the other. Today, the technologies driving growth are, of course, quite different than they were a century ago. But, the fundamental lesson — that these technologies may require new organizational forms — is as relevant today as it was then.”

Maybe it’s just my perception, but it does seem to me that the innovation snobs continually beat the drums for technology innovation, and fail to pay attention to the organizational side of the coin.

This is especially true in the world of banking, where the list of technology innovations over the past 20 to 30 years is quite impressive: ATMs, online banking, online bill pay, remote deposit capture, mobile banking, PFM, debit card, prepaid cards. The list goes on.

Yet banks have been slow to innovate organizationally. Product- and channel-centric departments still dominate. Most banks can’t calculate a reliable customer profitability number. And marketing ROI measurement remains a black art.

I had a recent conversation with a senior exec at a credit union who, for the record, is not an innovation snob. He recently saw Hal Varian of Google present some really cool ideas about how organizations could radically change they way they do things using data from Google.

My friend asked me if I thought some of the ideas were applicable to financial services. My immediate thought was “hell yes! this is amazing stuff!” followed by “but, most financial services firms can’t even integrate their own Web data with their offline data, can’t figure out how to use behavioral and not just demographic data to make marketing decisions, can’t look past their own data to make pricing and risk decisions, etc. — how the hell are they going to incorporate Google’s data?”

The second thing the innovation snobs fail to realize is that imitation isn’t inherently bad.

In a Harvard Business Review article called Imitation Is More Valuable Than Innovation, a professor from Ohio State University:

Found imitation to be a primary source of progress, even though that progress often went unrecognized by executives and scholars. He also discovered that good imitation is difficult and requires intelligence and imagination.”

The point is that if firms only did things that reflected their own innovations, there are a lot of things we’d be missing out on. Just remember, all my little Apple Fanboy friends, that Apple did not create the graphical user interface. That came from Xerox. I don’t hear the innovation snobs taking Apple to task for this, though.

But hey, I guess there’s a market for innovation snobbery, primarily in the form of blog posts for innovation snobs to reinforce each other’s view of innovation as marketplace savior. And who am I to criticize someone for meeting the demand for something that’s out there.

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6 thoughts on “Innovation Snobs

  1. I think we need some innovation in the innovation snobbery field. Nobody likes an innovator who sounds like a CD stuck skipping over and over… how ironic.

  2. Interesting post, but as an ‘innovation snob’ who writes an innovation snob blog, futures-diagnosis.com, I find we are living in different worlds. The greatest problem today is that we don’t have enough of a focus on technology, on R&D, on science and basic research, rather than too much of this. Instead the mainstream discussion is dominated by a superficial self-congratulatory focus on ‘innovation’ everywhere else – from business models to business process reformulation. Secondly, your counterpoint between innovation and organisational innovation is equally one-sided. All major innovations have resulted in massive organisational innovation or reorganisation: think about the impact of telegraphy on the office, of electricity on the factory, on the car for city planning and development etc etc. The two go hand in hand, but the question seems to me to be, what comes first? In the new space of Enterprise 2.0 (a term I hate) it is both the technology and user behaviour that is driving a rethink on business processes – processes that would never have changed under their own internal dynamic (or lack of it).

  3. My brain has been consistently thinking about this topic since Socialc20 in Boston last week. Greg Matthews (@chimoose)discussed how the social world and traditional organizations are constantly in conflict because they work in such different ways. I haven’t got it figured out yet, but look for technology innovation to support the thought innovation to help organizational innovation move forward.

  4. Interesting thoughts here. I just gave a presentation to a state league last week that focused on looking outside of the CU world to grow inside. So much R&D (rip off and duplicate) we get stuck like a skipping CD (props to Morris).

    Not once did we talk about technology but instead focused more on organizational structure and process thoughts.

    Innovation does not have to be all about technology.

  5. Norm: Thanks for taking the time to comment. I suspect that we’re probably in agreement on a number of points here. Especially about the mainstream discussion being “dominated by superficial self-congratulatory focus on innovation everywhere.”

    But while you may be right that major innovations like electricity or the phone have produced massive organizational innovation, I don’t see how organizations can wait for these uber-innovations to occur to create organizational innovation. What about “less than major” innovations? Do they also produce organizational change? It would be hard to make that point. Or do these lesser innovations not count? And how do we distinguish between major innovations and other innovations? And why should we even make this distinction?

    I also couldn’t say whether or not there is too much focus on technology/R&D/etc. or not enough. I don’t see how anyone can determine what the right amount is. But there are lots of people I see tweeting or writing in blogs that firms must innovate: 1) without being specific about what they’re talking about 2) and while ignoring the innovations that the firms they rail against have implemented.

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