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.