Innovation

In the beginning, God created the heaven and the earth... After that, everything else was Made in China. Before my family visited China last year to meet our long lost relatives, we searched for weeks to find a few gifts to bring to them... everything we found in the US was Made in China. We ended up settling on 'authentic' baseball caps embroidered with our local MLB teams. On a more serious note, now that most of our products are made in China we have to ask ourselves if innovation and creativity will also shift overseas. To answer that question, we really have to define what innovation is.

Every once in a while a company will call me and say they are looking for a head of innovation or VP of innovation. Sounds like a cool title, right? The problem is that there is a lot of confusion as to what 'Innovation' is and how to leverage innovation to start transforming a company.

Innovation can be confused with great design.

Innovation can be confused with research and development (or crazy experiments).

Innovation can not be confused with a new product that is substantially cheaper and/or provides a much higher value to a broad set of customers.

Clayton Christensen, who wrote The Innovator's Dilemma, defines an innovation as the creation of a much cheaper product or the creation of a new category of product that creates a new, scalable group of customers. The global innovation firm Doblin defines the Ten Types of Innovations ad nauseam.

A lot of executives are willing to invest in innovation for long-term growth, but when it's then handed to the next level down there's a desire for quick results and to mimic what they see in the press. This leads to hiring a team of product innovators, but with the expectation being that they will produce press-worthy results that the marketing teams will communicate. You can see where there can be confusion between good marketing innovation and lasting, equitable products. For a lot of non-tech companies who are trying to figure out what Innovation is and how to introduce it into their culture, I would simply define innovation as falling into three different areas: Product Innovation, Marketing Campaign Innovation, and Platform Innovation. Once a company figures out the type of innovation they need, they're positioned well to build the right types of teams to deliver exciting and lasting results.

Here's how I roughly define each category of innovation and the supporting organization needed for success:

Product Innovation

An innovative product or service is defined as providing a new, much higher level of value for a customer - this could be in the form of a much cheaper price for an equivalent product (e.g. email vs. postal letter) or a much higher perceived level of quality for the same category product (e.g. Über vs. taxi). If your company produces its own branded products, this is the type of innovation need and can see in companies like Google and Facebook. This type of company product transformation requires an unique combination of understanding the company's core business, its customer's needs, the capabilities of technology, and the level of risk top brass is willing to take. If the company has leaders with this understanding, you should put three separate teams in place to drive innovation:

• Pilot Team. This team focuses on testing and learning through prototypes that are piloted in the wild with consumers. It quickly determines whether the concept works. The weaker concepts or 'branches' wither away and the stronger concepts become the 'trunk', or are scaled up into production.

• Production Team. This is the team that makes incremental improvements to the existing technologies being used currently in the business. This team keeps the day to day digital properties running and helps avoid the Pilot team from getting distracted with operational firedrills or short term goals.

• Business Innovation Team. This team drives strategy and decision making. It ensures that there is a strong roadmap that ties existing revenue streams with new growth streams. It's made up of product managers and business development managers. The product managers glue the above two teams together. The business development team scouts out potential new partnerships, evaluates acquisitions, and closes deals.

Marketing Campaign Innovation

Marketers are endlessly creative and don't lack new ideas. Leveraging new technologies can improve a brand's equity and be seen as innovative. Marketing Campaign innovation refers to creative marketing campaigns that boost awareness and are often short lived or seasonal. They typically don't require R&D or new technology. This is a common misunderstanding that leads to innovation departments being formed when there is already a Marketing Department that just needs to be restructured to include a technology enabled skill set. I've seen a number of existing marketing teams and digital teams who are very capable of creating content (e.g. print ads and website images) but lack an understanding of technology, specifically the latest technologies and how they can be applied to produce highly successful brand marketing campaigns. This leads to the 'Innovation Team' being asked to work on anything that is technology related. Marketing teams need tools that quickly reach their audience. They can't wait a year. They also need basic media such as an engaging website, a mobile app, and a tablet app. All of which are not innovative but are however technology driven. Between the plethora of startups, big tech companies, and interactive agencies there are plenty of tools and technology products already available. They just need to be properly sourced and then managed for the right results. Often a new completely new product doesn't need to developed. There's a simple remedy. Hire a Marketing Technologist - this is a somewhat new role but can be extremely valuable, effective and efficient. Place this person into the marketing team and give them a modest budget rather than spinning up a whole new, expensive Innovation Team.

Platform Innovation

Platforms and products are closely related but a product is different from a platform in that a it is more singular, like a mobile app, whereas a platform supports multiple touch points, technologies, and can even power multiple products. Innovative platforms today help consumers along their entire journey and are scalable. For example, a platform can help manage a customer's time - Amazon's eCommerce platform helps you find the best product fast from anywhere on any device through a website or their apps. TiVo's video platform let's you efficiently watch TV shows whenever you want to and from different sources (Netflix, YouTube, Hulu, CBS, etc.). Facebook's social platform lets you connect with friends and family more quickly across any geography and on any device. All of those are platforms and be expanded and personalized. This kind of innovation requires deep plumbing expertise in system level engineering, back-end engineering, data, and analytics. In Silicon Valley many companies have recognized that you can exponentially affect the customer experience if you then network platforms together. If you need to tie together disparate systems, platform innovation is for you. The skill set needed for this work is the same as described above for Products, but focused more on the back-end and creating digital services that can be consumed by products. One additional team will be needed for platforms:

• Developer Tools Team. These are typically in the form of a Software Development Kit (SDK) or an Application Programming Interface (API), both of which are tools that software developers can use to easily connect your platform to their product

Ok, back to China, who happens to make 70% of the worlds mobile phones today. When we got to Shanghai, I was blown away by how modern the city was - there were more malls per square mile than I've ever seen in any city. But I also noticed that a high number of popular, innovative brands that were American - Apple, Uber, Starbucks, Nike, Microsoft. The shift hasn't happened yet and based on my definition, I would say that we are still innovating, and in all three forms.

I'd love to hear your thoughts on how you define innovation.