Exciting things going on in the world of design and innovation.
I listened to a BusinessWeek podcast with Rajesh Chandy, Professor of Marketing at University of Minnesota Carlson School of Management, from December 3, 2008: Five Traits of Innovation Companies. The main difference between innovative companies and non-innovative companies? Culture.
"The battle is within. It is a cultural one: between glorifying the past or being paranoid about the future (Grove 1996); between protecting one’s successes or cannibalizing them (Chandy and Tellis 1998); between averting risk or embracing it. The battle is for the soul of the firm. Innovative firms are those that clearly understand this battle and adopt decisive practices to win it."
What this suggests, then, is that innovation is something you are rather than just something you do. Of the five traits of innovative companies, the top two are: 1) Forward-Thinking Orientation; and 2) Willingness to Cannabalize.
A forward-thinking orientation is identified by -- of all things -- the language top management uses to communicate. Specifically, how often they use the words like "will" and "shall." Cannabalization is somewhat self-explanatory -- it's the willingness of the company to overtake its own products -- much like Apple with the iPod and Gillette with its razors.
Among other things, the implication of just these two traits of innovative companies is the impact on ROI. If within 3 to 5 years your new widge is essentially obsolete or vulnerable to competition, then the return on investment has to also be fast. Not only do firms have to be thinking 3 to 5 years out, they also have to understand the nature of planned obsolescence when it comes to their product development.
If you're interested, here's a link to Chandy's paper, recently published in the Journal of Marketing.