流程创新最紧要

　　据著名的欧洲工商管理学院（INSEAD）调查，86%的企业采用低风险渐进类型的创新，而企业30%的利润来源于此。剩下的14%采取激进式创新类型，其利润达到60%。

　　从1980年到2001年二十年间，在财富排行榜前100名的名单中，只有26%的企业依旧保持存在。换句话说，维持企业100%安全的做法是最危险的。正如著名作家以及创新专家希金斯（James M. Higgins）所言，“要么创新，要么灭亡”。

　　《www.fastcompany.com》日前发表文章《拓展你的创新视野》（Expand Your Innovation Horizons）指出，太多的企业强调创新的低风险性，目标只是单纯地扩大现存的商业范围。

　　大部分创新失败的原因也非常明了：模式化、缺乏想象、枯燥乏味，事实上并没有满足任何真正的需求。大部分所谓的创新，实质上并非是真正意义上的创新，那种对现存产品和服务过于平凡的延伸方式并没有得到挑剔的、时间宝贵的客户们的认可。

　　文章认为问题出在大多数企业把创新的大部分努力投在了第一种类型的创新上，这种创新的特点就是低风险、只是以单纯扩大现存的商业范围为目标。

　　有一些公司超越了水平创新的第一种类型，他们开发了新的产品和服务，以在现存的市场中创造新产品为目标，这被称为第二种类型的创新。这种类似于一鸣惊人式的创新无疑是比较困难的，但对于有足够的智慧、勇于尝试并且坚持不懈的企业来讲，也会有所回报。

　　第三种创新类型，通过全新商业模式和高科技的运用，以推翻现存市场为目标。这是一个全新的领域，在那里传统行业被重塑，新兴科学和科技被采用，来重新应对似乎并不存在的需求。因为很少有企业拥有如此这般的想象力和勇气来采取这样大胆的举措，因此差不多是这样一种状况，别人如果只说你“荒谬”都基本上算是表扬你了。而这也正是财源滚滚而来的原因所在。

　　文章最后还向有意创新的企业提出了两点建议：1、企业在维持低风险的渐进式创新方向的同时，必须思考如何进行激烈性的第三种创新；2、企业需要更多地集中在流程创新上，重新思考市场和企业运作的现状，以及将来怎么做才能向顾客提供更多的价值。换句话说，企业需要更少地考虑新产品，更多地考虑如何通过新的业务或者新的业务模式来供应产品。

Too many companies emphasize low-risk innovations that aim to incrementally extend their existing businesses.

Most innovations fail and it’s easy to see why. They are expected. They are unimaginative, boring, and fail to excite or fill any real need. Indeed, most so-called innovations aren’t innovative. They are mundane line extensions to existing products and services that have no currency with cynical, time-starved customers. So why do companies keep churning out me-too innovations that have no magic or address problems that have been adequately met elsewhere?

I think part of the problem is that most companies put most of their innovation effort into what I’d call horizon-one type innovations. These are low-risk innovations that aim to incrementally extend the existing business. They usually make sense internally but most customers can do without marginal innovations, especially if switching from one product to another costs valuable time or money.

A few companies look beyond this activity to horizon-two type innovations. These are new products or services that aim to create entirely new categories within an existing market. This type of blockbuster innovation is difficult, but there are big rewards for any company that’s smart enough and persistent enough to try.

The third area of activity is horizon-three type innovation. But outside of technology this is as rare as a red carpet no show by Paris Hilton. Horizon-three type innovations seek to disrupt existing markets through the use of new business models, processes, or technology. This is an area where old industries are remodelled and where emerging science and technology is harnessed to address demand that does not seem to exist. It is an area at the very edge of what’s possible where comments like ‘ridiculous’ are often a favorable response because few companies have the imagination or the courage to follow such bold moves.

This is where the really big money is.

According to an INSEAD study, 86% of innovation is low risk and generates around 30% of current company profits. The remaining 14% of innovation is radical but generates over 60% of current company profits. I’d add to this that unless you are actively looking at horizon-three type innovations, chances are your company won’t be around in another 20 years to invest in lower risk incremental innovations. For example, only 26% of the companies in the Fortune 100 in 1980 were also on the same list in 2001. In other words, playing it safe 100% of the time is a dangerous business. So ‘innovate or evaporate,’ as author and innovation expert James M. Higgins says.

Another reason innovations fail is that successful innovations that remain in market are quickly copied by competitors. Not only that, competitors playing a ‘follower strategy’ are not disabled by many of the costs associated with bringing a new idea to market. Fast followers can quickly learn from the mistakes of the original innovator who is invariably bogged down by the double whammy of internal resistance and external inertia.

For example, can you imagine the money Unilever must have spent to put black laundry detergent (for washing black clothes) on shelf only to find archrival Procter & Gamble putting an almost identical product on shelf a few moments later? (I actually forget who was first and who was the follower--but that’s my point).

Furthermore, companies often seriously underestimate the hidden costs associated with innovations, so what looks like a success on paper is often a commercial flop over the longer term when hidden costs like logistics are taken into account. Incremental innovation (horizon-one type innovation) is something companies need to do to stay in the game, but it rarely delivers any long-term competitive advantage unless you can create continuous company-wide innovation as a core competency.

This is not to say that companies (or individuals) can’t get rich by inventing and capitalising upon a single new product (look at Red Bull, Dyson, or Swatch), but it’s getting increasingly difficult as mass markets fragment and consumer attention spans evaporate.

For instance, Apple (pre iPod and iTunes) held approximately 1,300 patents and had fanatical brand loyalty. The company was also held up as a poster child of the innovation economy. But Apple had only around 2.5% to 3.0% of the global personal computer market behind grey box brands like Acer and Legend. In contrast, Dell had a share of around 18% of the worldwide market thanks to process innovations like its ‘built-to-order’ production system. In personal terms, Michael Dell is also worth considerably more than Steve Jobs. Dell is the 12th richest person on the planet with around $17 billion, while Jobs languishes in relative poverty in 140th place will around $4 billion. This is ridiculously simplistic, but surely these numbers say something about the value of process versus product innovation?

Another good example is the no-frills airline business. Ryanair (a low-cost European airline) has a higher market cap that most European national carriers. Why? Because no-frills airlines like Ryanair have re-invented flying for millions of people -- not through glitzy product or service innovations but via operational innovation.

Similarly, Wal-Mart isn’t the sexiest retailer from a traditional innovation point of view but they are creative thinkers where it counts. Wal-Mart’s ‘cross-docking’ system (where goods are transferred directly from supplier trucks to store delivery trucks) has been fundamental to logistical efficiency -- which in turn allows the company to deliver low prices to customers. It’s not glamorous but it works.

So what’s the take-away here? First, companies must think more radically while simultaneously maintaining an incremental innovation course. Easier said than done of course but there is no easy route to any place worth going.

Second, companies need to focus more on process innovation. This is not innovation process (which they also need) but re-thinking how a market or business currently works and how value could be delivered differently in the future. In other words, companies need to think less about new products and more about how they are delivered via new businesses and new business models.

A final example: Day Jet is a new U.S.-based business that allows business travellers to fly direct to regional airports in six-seater micro-jets. This means that travellers can bypass time-consuming connections at big airports and avoid unwanted overnight stays in small towns and cities. This is a really nice idea, although in theory any airline could buy some micro-jets and do exactly the same. What makes Day Jet innovative is its business model: The company has no fixed routes and no fixed prices. Instead the business aggregates demand ‘on the fly,’ linking small groups of people that want to go to the same place at roughly the same time. Routes and pricing will fluctuate in real time as demands ebbs and flows and customers will be offered a series of different prices depending on how flexible they are willing to be (give a little, save a lot). What’s really clever about this idea is how the business model blends some trends -- like mass customisation, dynamic pricing, and social networks to create a product that is extremely difficult to copy.