i am innovating

Samuel Keenan

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An educational Tour de France

Over the last few months this blogging experience has taken me on an exciting journey that I'm glad I have been able to share with you. It has encouraged me to analyse innovating from various perspectives which has allowed me to gain a much broader understanding of the topic. 

I set out to discover what ‘innovation’ actually means and one of the major points this blog illustrates is that innovation isn't exclusively for an R&D department in a business; everyone is innovative! Innovation can relate to everything from products and processes to culture and leadership to sports; there is no exclusivity.

I have tried to integrate  theory into my posts to show how it can be applied and the examples I have used shows the importance of innovation. They are some of the most successful businesses and teams in the world; Apple, Google and Barcelona FC  to name but a few.  Innovation has allowed them to not only gain a competitive advantage but they have also revolutionised the markets they operate in.

I would like to thank you for reading my blog and I hope it has been an interesting and educational experience for you too. my sources are all on the bibliography page that you can be accessed by clicking the link at the top of the page. If you have any questions regarding any of my posts please do not hesitate to ask via the comments section.

Thank you once again,

Samuel Keenan

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Made of Glass

Rather than focusing on the invention of the ‘brand new’, one might better strive for creative insights on how to combine, develop and leverage what is already out there, but hidden, or not understood (Buxton, 2005). I read this quote shortly after watching the video below and instantly made a connection between the two. This is certainly not a 'brand new' product but it combines two products to create one extremely innovative product. 

It is clearly a technology-driven innovation because it is far from a necessity. As is the case with many technology push innovations, it is likely that it will take a considerable amount of time to market. What is more, it is difficult to gauge the market potential for a product that isn't necessarily in demand to begin with. However, Samsung want to be an innovative company so they have to take risks in order to be at the forefront of innovation.  

A “technology push” innovation can encompass a time period of over ten years (Hetstatt & Lettl, 2000). One of the reasons it can take such a long period of time to develop a product is because of the considerable amount of research and development that is necessary. The video below shows a number of similar products, many of which are currently in development, that will be available in the near future. As with many technology driven innovations, the success of these products may depend on the state of the market when they are released. There are no prices available currently but I can imagine that these products will be rather exclusive when they are released. Although they may not be necessities, if these products are made available at affordable prices in the future then it is likely that they will change they way we go about our day-to-day lives.

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The 30-storey hotel built in 15 days!

I'm sure the Broad Sustainable Building Corporation have had a few enquiries from British construction companies recently. The process they use has seen the company "construct a 30-storey hotel in a mind-blowing 15 days in Dongting Lake in the Hunan province of China" (Barker, 2012). 

The process involves doing a lot of the construction offsite and then simply piecing it all together onsite. Prefabricated buildings are nothing new but it is usually done on a much smaller scale. "Entire wired, plumbed, tiled and walled sections are created before anybody even has to turn up on site, and it literally all slots together like a gargantuan Meccano set (Barker, 2012). This cuts costs because fewer contractors are required as most of the prefabrication is done in one central factory. 

The building is earthquake resistant up to a magnitude of 9, one of the key features being a structural column slab in each of the prefabricated sections. This also allows constructors to easily slot each section on top of the last which is one of the reasons it can be constructed so quickly. 

The company could be about to change architecture and the construction industry forever. If this design can be adapted to suit buildings in other countries and suchlike then who knows how successful the process may become. 

On the other hand, there are drawbacks to this process. It may be extremely innovative and reduce costs but if it is taken up on a grander scale the construction industry may in fact suffer. Fewer contractors are required in this process compared to usual construction projects so it could result in a lack of work for many. Nevertheless, the innovativeness and benefits may outweigh the drawbacks because it is unlike anything the world has seen before. 

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Is innovation all it's cracked up to be?

In an article written in 2004 for the Fast Company, Carleen Hawn suggested that innovation may not be as essential as many people believe. She used the case that Apple are innovation focused and design beautiful products, whereas, Dell's computers have practically no technical or design innovation, yet, Dell hold a larger proportion of market share as the graph below shows (Buxton, 2005).

         The graph shows the up-to-date figures of PC market share as featured in a recent article (Robertson, 2012). Apple being the innovation driven company that they are maintained a relatively stable market share between 2008 and 2010. Dell, on the other hand, have seen a gradual decrease in their market share. In the first quarter of 2010 Apple's market share rocketed as a result of the launch of the iPad, which is certainly an innovative product. This alone shows that Hawn's argument was slightly flawed to say the least. 

Buxton (2005) argues that a distinction needs to be made between product innovation and process innovation. He also suggests that "innovation in process + design trumps innovation in process alone" (Buxton, 2005). Dell relied on an extremely successful process for PC manufacturing that saw them dominate the PC market for many years. However, Apple have an innovative process and design throughout the entire company that has allowed them to take a dominating position in the PC market as well as the music market with iTunes and the various models of iPod's. In a fiercely competitive market, continuous innovation is vital. Dell's process may have been innovative in the past but Apple are continually innovating, diversifying with new product lines, which has seen them overtake Dell in terms of market share.

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The Fastest Growing Company Ever

The company is Groupon, "an online site whose members can get daily discounts from local businesses" and it "recently had the biggest initial public stock offering of any Internet company since Google" (Savitz, 2012). The founder is Andrew Mason, a 29 year old who is now worth an estimated $600 million. The video at the bottom of the post features a brief description of the business in an interview with Andrew Mason. 

Apparently, one of the reasons behind the business's success is the unique business model built around collective commerce. This is when "a group of consumers join together to influence and drive the demand of an item or service, resulting in a profitable transaction for the retailer and a satisfied group of customers" (Espinosa, 2009). The model is beneficial to both the retailer and the consumer. Retailers cut the costs of marketing their products themselves and are selling to consumers who have expressed an interest in their products to avoid them advertising to the wrong audience. "Consumers are driving the market, rather than taking what the market offers to them with no alternative" (Espinosa, 2009). This means that they get exactly what they want on terms that they have established which results in extremely satisfied customers.

However, experts have suggested that Groupon's business model isn't viable. It's financial reports certainly support this statement, the business hasn't yet generated any profit because of the money it is investing in marketing in order to expand internationally. Nevertheless, the business has stated that it will be profitable once it reaches scale. But the main problem is that the business is operating solely on investment capital which cannot last forever. Unfortunately the financial results of the company in its mature markets show revenue decreasing. Unless significant action can be taken to stabilise the business model then it is unlikely to survive for much longer. 

Innovation and entrepreneurship go hand-in-hand but in order for a business to be sustainable good leadership and planning are essential. Currently, it appears that the decision to work towards upscaling before generating a profit may have been a mistake. 

"Success is not final, failure is not fatal: it is the courage to continue that counts."  Winston Churchill

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A few years ago I met Kevin Roberts, Worldwide CEO of Saatchi & Saatchi, who inspired me to follow my passion for business. In this video he discusses how to manage innovation as well as sharing his own personal experiences and advice. Saatchi & Saatchi is a global advertising agency "with 140 offices in 76 countries and is part of the Publicis Groupe, the world’s third largest communications group" (Saatchi & Saatchi, 2012). He suggests it's too difficult to manage creative people and in a business that is focused on creativity and innovation, he believes the best way to lead is through inspiration. This relates to Simon Sinek's theory that great leaders inspire action and should work with people who believe what they believe. If people are inspired they won't be working for you, they will be working for themselves because they believe what they are working for. 

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Innovation in Football

       "Real Madrid in the 1950s; Brazil in 1970; the Johan Cruyff turn and Dutch “total football”; the current Barcelona team; all of these changed the way the game was played, and in most cases won big trophies.  Apple and the iPod, mobile phones, the internet, numerous pharmaceuticals – all of these have disrupted and created markets and are famous in their own right." (InnovationFixer, 2010). 

This type of innovation is called 'disruptive innovation', a theory created by Clayton Christensen. Essentially, the style of play is very simple but they have developed and improved it to a point where it has revolutionised the sport and displaced the traditional styles. The examples in the first paragraph have disrupted and created new markets altogether. 

As I have previously discussed, innovation in business is successful when there is strong and inspirational leadership, talented and creative people and a culture focused on results. It is exactly the same in football. Sir Richard Branson and Lionel Messi may receive a lot of attention but without their teams they are nothing. 

The teams mentioned in the opening paragraph are some of the greatest the world has ever seen, who play/played open flowing football. "They were highly organised, but flexible. They play to a system, but not a rigid one that stifles individual creativity and initiative" (InnovationFixer, 2010). It is very easy to draw the parallels between sport and business; that description would have fitted perfectly into my post discussing Google. 

The reason the analogies are so easy to derive is because the objectives of sports teams and businesses are so similar. They both want to gain a competitive advantage in order to dominate their markets and the success of the examples used above shows that innovation is a key factor in achieving this.

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Follow the Leader

                                Does innovation require a specific leadership style? Deschamps (2008) believes so but he suggests that different innovation strategies require different styles of leadership. In order to maintain innovativeness, a certain type of leadership and organisational culture is vital. A blog about innovation wouldn't be complete without the mention of Steve Jobs. Before he returned to Apple, the business performance was completely unstable but he came back with his innovative leadership style and established it as a world-leader in terms of innovation. 

Innovation leaders are those who encourage new ideas and have the courage to allow experimentation within their business. One of the most famous examples of this is Google who allow their employees to spend one day a week working on projects that aren't part of their usual work as explained in the video below.

   This shows that Google take a bottom-up approach to innovation; they know that their management team can't sustain the innovativeness of the business alone so they allow all employees to contribute. As explained in the video, the scheme is extremely successful with one of Google's most successful products, Gmail, being created as a result of it. 

The leadership style is very closely linked to the organisational culture. Google's organisational culture is one that allows its employees to feel relaxed at work. What is more, it makes the employees feel valued because they can see their ideas being integrated into the products. The video below shows many of the benefits working for Google brings, including a childcare centre, a gym and a volleyball court. 

                 The success Google has experienced in recent years shows the benefits of being innovative. However, in order to achieve this they have aligned their employees, the culture and the structure to encourage innovation which isn't something every business can suddenly achieve. Google is just one successful model but there are many others that also allow innovation, much depends on the type of the business and how committed they are to being innovative. 

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MUSIC FOR THE PEOPLE

                   In this weeks post I'm going to focus on innovation in the music industry. This doesn't have to mean a new experimental genre, but rather the popular platforms and trends in the industry. In my lifetime alone there has been incredible progress in the industry, especially in terms of how users access music.  When I first began to purchase albums, CD's (Compact Disc) were the prevalent means of music distribution. However, as soon as I got my first computer I discovered online platforms, the pioneer being Shawn Fanning, the developer of Napster. Although now it doesn't exist in its original format, it provided the first real competition for the music industry. It would seem that Napster changed the music industry for ever. 

"CD album sales were down 12.4% in the UK alone last year, whilst digital album sales were up a whopping 30.6%. And all this before we even consider music-streaming websites." (innovatrs.com, 2011)

If you ask anyone who downloads their music (legally) where they purchase it, the likelihood is it will be iTunes. As Napster was winding up following a failed court battle in 2001, iTunes and the iPod came to forefront of the music industry. From then on iTunes has dominated the paid digital download market, as of 2010 they held close to 70% market share, with Amazon trailing in second with just short of 15% (mactech.com, 2010).

Nevertheless, new platforms are queuing up to have a go at breaking down Apple's dominance. The majority of these competitors are streaming platforms such as last.fm and Spotify. Last.fm, founded in 2002, is a platform that "builds a detailed profile of each user's musical taste through monitoring their listening habits across multiple platforms" (innovatrs.com, 2011). Although it doesn't look like a serious threat to Apple, it does have "over 40 million users in almost 200 countries" (innovatrs.com, 2011). I'm one of those users and to understand what it is, take a look at my profile. 

Spotify, on the other hand, has emerged as a real competitor to Apple. 

"Operating in only seven European countries, Spotify has 1.6 million paid subscribers and more than 10 million registered users. Spotify is seen as the future of digital music business and is billed to eclipse pioneer Apple iTunes." (International Business Times, 2011)

It only became available in the US in July this year so its success can't yet be gauged but it has a unique advantage over Apple in the way it is integrated with Facebook so users can easily share songs with friends. However, with the launch of iCloud in the UK, Apple are making sure that they still have a piece of the pie. I guess only time will tell who prevails but this is just one battle. In my 20 years so far the changes have been extraordinary so I'm sure there will be many more developments in the 20 to come! 

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Can one man reforest the world?

                                         WATERBOXX NAMED INNOVATION OF THE YEAR

                                             Could boxes of water help reforest the world?

My aim for this blog is to gain a broad understanding of 'innovation'. My previous post was looking at the innovation involved in redesigning public transport so this week I thought I would look at a specific product. Rather than choosing to research common products that are obviously innovative such as the iPod, I thought I would look at a product that aims to change the world in a different way. 

The two links below the images are to articles written about the Waterboxx which last year was voted 'Innovation of the year' by Popular Science. As the first article explains, it "protects plants in dry areas, harvesting water through condensation instead of relying on irrigation" (Danigelis, 2010). It is already in use around the world following successful experiments and as Popular Science (2010) has highlighted,

"88 percent of the trees planted in Waterboxxes in the Sahara not only survived but thrived, compared with about 10 percent of traditionally-planted trees in the same area". 

The second article (Khan, 2010) explains more about the inventor, Pieter Hoff, and reveals that he published a book in 2008 titled "CO2: A Gift From Heaven". The major message that it delivers is that policymakers should focus on planting trees rather than continuing the climate debate. He calculates, 

"Planting 5 billion acres of trees would be enough to offset annual emissions of 10 billion metric tons of CO2".

The benefits of this product are extraordinary. It could help reforest the world and as a result offset CO2 emissions. Hoff believes if they are produced closer to the location of sale they will be much more affordable. 

This is a prime example of how innovation can and is changing the world. Although it may seem like a simple idea, people are questioning why it hasn't been produced sooner. If a biodegradable version can be created then it is expected to gain more attention and be adopted on a much larger scale. Pieter Hoff's dream is to reforest the world and he wants to develop the tools for this to be achieved. He had an aim, designed a product and is well on his way to seeing his product, possibly, change the world.  

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Advice from Tumblr co-founder David Karp, in an interview with Inc.’s Liz Welch.

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Does innovation have to be invention?

                      Reinventing the railway: Maglev tech to the aero-train

The above link is an interesting article regarding the comeback of an old design of transport that never really 'took off'. However, with improvements in technology and the availability of parts it has become "the future of public transport". As the article states, it is not very often that old technology re-emerges, it is usually left in the past, nevertheless, "levitating trains are making a comeback". 

One of the other reasons it failed to gain attention in the past was because there was no real demand for it; there were always alternatives. So why now has President Obama, amongst others, suddenly shown an interest in it? Well with considerable increases in energy prices, everyone is looking for ways to reduce consumption. One of the main advantages of this type of transport system is that the vehicle doesn't have wheels, therefore, the enormous amount of energy it takes to brake and accelerate metal wheels would be saved. As the article highlights, on paper, this system should be "safer and faster since it has less of a fight against friction, and cheaper to run". Although the initial installation costs are high, it has been proven that once running, the maintenance is "undemanding". 

The second part of the article focuses on the concept of an "aerotrain". Although this has been tested in the past, again, there were more successful alternatives. However, the concept has been developed and a prototype has been produced. The main advantage of this is the fact it's 'green'. This is at the forefront of many designers minds as there is increasing stress being put on levels of carbon emissions. The lead designer on this project believes that it could be in practical application by 2025. 

Both of the aforementioned projects have their individual attributes that are increasingly desired by governments and the public alike. Therefore, it will be intriguing to see if they are developed further and eventually adopted on a grander scale. One of the key points this article highlights is that innovation does not necessarily have to be a brand new idea. It can be redesigning a product or service or perhaps relaunching it at a time when it is in higher demand. 

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Supply Chain Innovation

In this weeks post I'm going to look at innovation in relation to supply chain management. This can be any improvements to the operations in the supply chain such as the way products, information and money flow through it (Flint, 2007). As businesses strive to gain a competitive advantage, innovation is essential. However, many have come to realise that product differentiation is unsustainable and as a result opt to differentiate in terms of processes. Innovative approaches to supply chain management can transform existing markets and create new strategic opportunities.

A major example of a business that has achieved success as a result of this is IKEA. They "designed a Supply Chain Management (SCM) solution where customers take part in the value adding process of products by doing the final product assembly" themselves (Arlbjorn, et al., 2010). IKEA use a build-to-stock approach to increase product inventory which allows them to dominate slower build-to-order competitors (Kopczak & Johnson, 2003). 

    There are a number of other advantages of innovative management in the supply chain. One of these is increased efficiency and they achieved this by "cutting back on suppliers and focusing on those located in low-cost countries" (Logistics IT, 2006). If costs are reduced, the business will become more profitable which is an obvious benefit of increasing efficiency. 

One of the pioneers of supply chain management was Frederick Winslow Taylor who developed the scientific management approach. An element of this was the use of an assembly line in the manufacturing process which was adopted by Henry Ford in the car industry. It revolutionised the process but it has continued to develop as businesses have maintained their innovative approaches.

In summary, this shows that process innovation can be equally, if not more effective as product innovation. Gaining competitive advantage is vital and in the current economic climate every business is looking to reduce costs so innovation is key. 

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Porter's Five Forces

Today, I'm going to look at how businesses can develop a suitable innovation strategy because in the current economic climate businesses worldwide are having to evaluate their strategy to ensure they don't get left behind. As Stern (2008) suggests, "if you are going to look at strategy again you should do it properly" and many managers will look towards Michael Porter's book, 'Competitive Advantage', for guidance. He established the framework of the five competitive forces that shape strategy and in the video below, Porter explains them in detail as well as how to put them into practice. 

The framework is used to analyse the market that a business operates in. The five forces are: 

the threat of new entrants

the bargaining power of suppliers

the bargaining power of customers

the threat of substitute products or services

the rivalry among existing competitors  

Naturally, in an industry where existing businesses are successful, there will be a threat of new entrants. Their aim will be to gain market share which will put pressure on costs and prices and if the new entrants are diversifying from another market they may already hold some power. A current example of this is Virgin who have recently moved into the banking market. They have a lot of power and the financial capability to put pressure on existing banking firms. 

The bargaining power of suppliers can have a huge impact on businesses. Powerful suppliers are able to increase their own profitability by charging high prices to businesses that are unable to pass on the costs to their consumers. 

The bargaining power of customers can drive down prices, demand better quality or use industry competition in order to gain more value from purchases. Consequently, costs increase and the profitability of the business decreases.

A substitute product or service is one that "performs the same or a similar function as an industry’s product by a different means" (Porter, 2008). Businesses have to differentiate themselves from substitutes to avoid reduced profitability. 

Rivalry among existing competitors includes a number of factors such as price competitiveness, new or improved products or services and advertising campaigns. In order to remain competitive, a business will have to continually invest, thus, strong competition limits the profitability of a business. (Porter, 2008)

Porter suggests that his framework "allows strategists to understand the fundamental structural conditions of their industry" and "makes it possible for businesses to work out how they can be more profitable and less vulnerable to attack" (Stern, 2008). Thus, the importance of developing an innovative strategy cannot be underestimated. Next week, I will begin to analyse the various types of innovation strategy. 

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Buenos Días!

The aim of my blog is to discover how innovation affects our lives, the importance of it to organisations and what it means to be innovative. Using current events as examples, I will analyse and evaluate them to highlight the diversity of innovation. By employing various forms of media I hope that my blog is both informative and entertaining to read. Now I can start to discover what 'innovation' actually means. 

So, I know what I want to find out but where do I start? Usually, when starting an assignment I will begin in the library, researching concepts and theories and finding quotes but seeing as this module is 'Innovating', I thought I'd change that and try something different. I decided I wanted to gain a broader understanding of what innovation is and a good way of doing this is StumbleUpon. Rather than searching for a particular element of innovation, this allowed me to find websites and articles that I would never normally have found. 

I intend to use this method, amongst others, throughout the process of writing my blog as it allows me to widen my thoughts rather than focussing on one particular element of innovation. I hope that this will make my blog more interesting for you, feel free to comment on my posts or follow!