Perspectives on Innovation

By David

What exactly is innovation? I often hear clients say that an approach is not innovative enough, or that their business needs to be more innovative. What I’ve come to realise is that innovation means different things to different people.

This started me on a course to find language and frameworks to make sense of innovation. The Second Machine Age: Work, progress, and prosperity in a time of brilliant technologies describe two schools of thought on innovation that I find useful:

Innovation-as-fruit

An invention like the steam engine or computer comes along and we reap economic benefits from it. Those benefits start small while the technology is immature and not widely used, grow to be quite big as the GPT (general purpose technologies) improves and propagates, then taper off as the improvement – especially propagation – die down.

Innovation-as-building-block

Another school of thought, though, holds that the true work of innovation is not coming up with something big and new, but instead recombining things that already exist. [emphasis mine]

Digital innovation falls in the innovation-as-building-block category:

Waze is a recombination of a location sensor, data transmission device (that is, a phone), GPS system, and social network. The team at Waze invented none of these technologies; they just put them together in a new way.

The book explains that we are currently experiencing an explosion of building blocks and as a result possible combinations and re-combinations. Due to Moore’s Law the building blocks (data, sensors, and software) are getting cheaper and abundant, but most importantly, digital building blocks cannot be used up. This creates an interesting conundrum:

… the only thing holding us back is our ability to work through all the combinations to find the valuable ones.

How do we find valuable combinations? An approach could be to design and run ‘low fidelity’ experiments to learn which ones work and can be implemented. This could be a first step for organisations that want to be more innovative. There is a method behind this called the Principle of Optionality. I’ve written about it before in The Planning Fallacy.