There is a question of what is the cost of innovation
There is the question of is innovation worthwhile – meaning what is the cost of not innovating and where or not the effort of innovating is profitable.
The question I am interested in is not “should we innovate?” It is not is innovation a worthwhile or profitable effort. I think it is. Not because I analyzed it and got to the conclusion that it is profitable. Not even because I think that not innovating is so dangerous that it justifies innovating – even at the cost of short-term losses.
I think we should innovate because some of us have an unstoppable urge to innovate.
We, humans, innovate much the same way birds fly and spiders weave webs.
I am not saying that it is the defining attribute of humanity.
I am saying this – almost as much as most people dislike change and the process of innovating – and most people hate change and the process of innovating (they still enjoy the innovation – but not the process, nor the adoption period) – some people love it and need it and cannot not do it.
The human race has a certain percentage of its population that is driven by the desire to change, explore and innovate.
So, the answer to the question is innovation worthwhile – for me is moot.
Now, if we only look at that group of people, the ones that are driven to innovate, I want to know, what is the ratio of effort to success. I want to know how efficient that engine is. I want to know if perhaps maybe, it can run better.
Why?
Well, because I spent my life innovating. At first as an amateur. Later, professionally. I spent over a decade working with some of the largest companies in the world on their innovation strategies, processes, developing new products and services - you name it. A dream, right? Well, not so much. Looking back, I have learned this: The amount of effort invested in the innovation funnel was literally incredible. I am talking about thousands of ideas leading to hundreds of tests, leading to dozens of mini-projects, leading to a horribly slow and incremental trickle of uninspiring, innovation. Take the food industry – the vast majority of innovation is in packaging. Why? Because it is almost always a cost-saving innovation – and reducing cost improves the profit directly which affects the stock price which makes the leadership happy because they can afford a private jet…. There is no incentive to introduce groundbreaking innovation, because, as you remember – most people don’t like groundbreaking. Most people like things to stay the same.
I also spent around a decade working with startups and have been an entrepreneur myself. I worked with many dozens of new ventures – mostly in Israel but also in other countries. This is what I learned from my startup ecosystem experience – being an entrepreneur sucks. More about that soon.
Shahar