Innovation senses: Innovation is everywhere in dynamic forms and from inspiring sources
Innovation is everywhere, we enjoy it, but sometimes we don’t realize it. This is where our senses need to learn!
Innovative is more than creative
According to Schilling in the book Strategic Management of Technological Innovation, Innovation begins with the emergence of new ideas. The ability to generate new ideas is called creativity.
Therefore, we often refer to inventors as creative figures, but I prefer to call them innovative figures. Creative people can generate brilliant ideas, but to be innovative, these ideas should be implemented successfully in a practical context as a problem solver.
Forms of Innovation 🧊
1. Product and Service Innovation
Emerge when a new product or service, or a revamped version of an existing product or service, is introduced into the market with the objective of meeting specific customer needs
Example: The tools and media that you are using to read this story in this medium now
2. Process Innovation
Refer to advancements in how an organization manages its business operations and flow, including new ways of handling a good or a service commercially. The primary goal for process innovations is efficiency.
Example: The legendary Toyota Production System 🇯🇵
Yes, Japan is the center of process improvisation as we often hear, Lean Manufacturing and Kaizen. On the other hand, America is famous for the Six Sigma.
3. Organizational Innovation
It involves a transformation in the way an organization operates and adapts to changes in the business or market environment.
Example: The famous Spotify Model
Nowadays, almost all startups or technology companies that apply the agile methodology use an organizational system that resembles the Spotify Model. We can explore organizational innovation through a macro-ergonomics approach!
4. Marketing Innovation
Refers to changes in the context in which goods or services are introduced to the market by focusing on the consumers’ needs.
Example: Lexus VR, Makeup Try-On
We don’t need to borrow a friend’s car to experience it right?
We don’t need to try cosmetic products directly on our faces, but we can use the make-up apps introduced by the cosmetic brand.
Study Case: McDonald’s Behemoth of Lead in the Era of Artificial Intelligence 🍟
Over time, customers have dynamic and evolving tastes and behaviors!
We can find examples of these types of innovation just in one company, such as McDonald’s
This unique thing begins with McDonald’s vision: to be a fast food restaurant with the best service in the world. Where perhaps similar industries struggle to create the best food, not the service.
1. Product and Service Innovation
- Start From The Basics: BBQ, Carhop origins, soft drinks, milk, coffee, potato chips, pie slices
- Innovate on The Menu: Big Macs, Quarter Pounder. Adding more salads, smoothies, and fruit to combat negative publicity regarding unhealthy
- McDonald’s Apps: Self-order, improve user experience
2. Process Innovation
Let’s take a break for a moment, and stop imagining that the process is a complicated factory flow because the bottleneck is not only in the factory flow, but the customer queue is also a bottleneck, agree?
- Drive-Thru: Separate the queues, more fast!
- Integrated Supply Chain Management: Can predict inventory levels for each restaurant, record daily inventory levels automatically, and send data to distribution centers
- Digital Menu Board: You don’t need to queue at the cashier while being confused about which menu to choose, you don’t even need to be afraid of being *trapped* buying an expensive product, or even embarrassed to be seen if you’ve never bought this brand before
3. Organizational Innovation
- Uber Eats: McDonald’s partnered with American online ordering and delivery platform Uber Eats and made the delivery service available at more than 5,000 US locations and approximately 13,000 locations worldwide
- Dynamic Yield: In March 2019, McDonald’s acquired Dynamic Yield, a company specializing in personalizing the customer experience using artificial intelligence (AI) and machine learning
How can fast food restaurant companies collaborate with AI companies?
4. Marketing Innovation
- Mass Marketing: On June 11, 2003, McDonald’s announced its first global marketing campaign with the slogan “I’m Lovin’ It.”
In 2023, is it still relevant? everyone already knows the campaign, so what?
- Switch To Mass Personalization: This is how AI/Machine Learning works, McDonald’s makes recommendations when customers place orders and suggests items based on external factors (purchase history, time of day, weather, traffic, trending, current inventory levels)
From McDonald’s we can learn that innovation is everywhere, we enjoy it, but sometimes we don’t realize it. This is where our senses need to learn!
Sources of Innovation 🛸
Innovation has the potential to emerge from diverse sources. It may stem from individuals, encapsulated in the iconic concept of the solitary inventor, or from users who craft solutions tailored to their specific needs.
Innovation may also be nurtured through the dedicated research endeavors of universities, governmental research facilities innovation hubs, or private nonprofit organizations.
“We don’t care where good ideas come from, as long as they come to us”- Jeff Weedman (P&G)
1. Closed and Open Innovation
Technology Cluster and Technological Spillovers
The closed innovation model implemented by Bell Labs involves scientists and engineers working in laboratories to develop new technology. Involvement with outside parties is limited, and discoveries are often maintained as the company’s intellectual property.
The Bell Laboratories you see here is where the transistor was invented in 1948 and this became the basis for the entire modern electronics industry that makes all the electronics you carry today. But it took Bell Labs 10 years before they shipped a product that used transistors so they spent time and all their money building this research, which means it took them a full decade just to be the first. As we know, the first entry is the key to victory.
As time goes by, the world of innovation begins to change. Open innovation models are becoming increasingly popular, and companies are starting to recognize the value of external collaboration. However, the legend of Bell Labs still shines as a reminder of an era when a laboratory within its walls created technological miracles, proving that sometimes, a world of innovation can also be found in the silence of a closed laboratory even if it takes a very long time.
We will think if open innovation is carried out, will it be more successful for Bell Labs?
Technology Cluster is a place where innovation and technological activity converge, forming innovative centers that radiate inspiration and collaborative intelligence as the first step in realizing open innovation.
For example, Silicon Valley in the United States is one of the most iconic technology clusters in the world. Here, companies like Apple, Google, and Facebook share their spirit of innovation. They not only create cutting-edge technology but also inspire start-ups and new companies that emerge around them.
In this technology cluster, we witness a phenomenon known as “technological spillovers” or the widespread impact of technology. It’s like a kind of creative energy that spreads out from the center of innovation, influencing the surrounding region with fresh ideas and technological advances.
Meanwhile, Bell Labs prevents “technological spillovers” by building magnificent laboratories with very high security.
2. Sources
- Users: Users or consumers can be a source of innovation by designing or developing solutions to meet their personal needs or problems. Example: LEGO
- Firms: Firms are a source of innovation internal research and development.
Example: Apple - Universities: With the facilities they have, universities are now able to become incubators.
Example: Bio Energy - Government-Funded Research: Governments can play a role in innovation by providing funding for research and specific technology development projects.
Example: NASA - Private Nonprofit: Private Nonprofits can contribute to innovation, especially in the development of solutions to social or environmental problems.
Example: Water.org - Individual: Great and special individuals can be the source of significant innovation.
Example: Thomas Alva Edison
Each source of innovation has an important role in the overall innovation ecosystem. Collaboration and exchange of ideas between these sources can create a fertile environment for technological progress and societal development.
Lessons Learned ✨
- Diverse Forms of Innovation: Innovation manifests in different forms, including product and service innovation, process innovation, organizational innovation, and marketing innovation. Understanding these categories helps in developing comprehensive strategies for organizational growth
- Continuous Adaptation: Embrace a culture of continuous innovation, illustrated by McDonald’s ability to adapt across various dimensions over time
- Collaboration Between Sources: The collaboration and exchange of ideas between various sources of innovation, including users, firms, universities, and government-funded research, contribute to a fertile environment for technological progress and societal development
References
Ivey Business School Foundation. (2020). McDonald’s: Can A Behemoth Lead in the Era of Artificial Intelligence?
Rogers, E. M. (2003). Diffusion of innovation. The Free Press.
Ulrich, K. T., & Eppinger, S. D. (2016). Product design and development. McGraw-Hill Education.
Schilling, M. A. (2013). Strategic management of technological innovation (4th ed). McGraw-Hill
