By Laura Morris, Account Director, Nunwood
When it comes to innovation, it’s easy to recall some of the big success stories of the last decade.
The rise in e-tailing, which has been led by sites such as Amazon.com and eBay; the Apple iPod which took the fusion of design and technology to the next level, and the arrival of new ways of networking with the launch of social websites such as MySpace, Bebo and Facebook.
What’s common with these innovations is their impact on the market and consumers – they stood out, they challenged the industry norm and made the headlines. They were also financially successful - delivering a major return on investment.
Transformational innovation delivers a major return on investment to the businesses. Facebook, launched by an American student in 2004, was initially aimed at the students of Harvard University, but now anyone with an email address can register. The university-based networking site was last year valued at an estimated £5bn.
Innovation can transform a brand but it can be risky, costly and something which consumer research cannot always mitigate. The ideas can be too difficult to be conceptualised and consumers can find it hard to even understand and visualise what to expect.
Innovation strategies require a leap of faith both by those who have invested in them and those who are responsible for bringing them to market.
Innovation directors and marketers are still aspiring to achieve the big hitting innovation ideas, but recognise that such innovations are often chance happenings.
They are following the 80/20 rule, whereby 80% of the innovation budget is ploughed into the less risky ‘bread and butter’ development and 20% of the budget is spent on finding new innovations that will ‘break the mould’, increase their market share and transform the business.
Not all innovations suit all business models, especially because many companies are risk-averse.
There is a realisation that constant investment into transformational innovation and development can’t be relied upon to bring continuous new revenue streams to the business.
In some of the more traditional sectors, such as financial services these so-called ‘gadgets’ or ‘mega hits’ are said by some to represent nothing more than reckless gambling.
Which is probably why there is growing emphasis on the value of incremental innovation. Businesses no longer view incrementalism as meagre pickings or destined only for short-term success. They are recognising the less risky, more predictable and most importantly measurable nature of such innovation.
Businesses which rely on innovation understand the importance of setting out a strategy which clearly outlines whether their objective is to pursue incremental innovation or whether they it should break the rules and grab the headlines.
Clarity on this will help shape the culture, behaviour, reward systems and ways of working, which will ensure realistic expectations for success.
Check out 12ahead, our brand new platform
covering the latest in cutting-edge digital marketing and creative technology from around the globe.
12ahead identifies emerging trends and helps
you to understand how they can apply to modern-day companies.
We believe 12ahead can put you and your
business 12 months ahead of the competition. Sign up for a free trial today.