By Eric van Niekerk, Research Lead, Innocentrix

Recently, the TechSmart and Innocentrix Innovation Series touched on how to get innovation started within your organisation. We have looked at how to create an innovation team, what it takes to be an innovation leader, how to create an innovation strategy and even what technologies to use in support of innovation. Today’s article will step away from the present and into the future to answer an important question: How do I keep innovation alive once it’s established?

Quality over quantity

An analysis from Accenture shows that how organisations innovate is indicative of their innovation success. According to their analysis, almost 50% of R&D investment is wasted due to incorrect innovation strategies. By focusing on in-line and incremental innovations, organisations opt for a quantity over quality approach, ultimately saturating the market and not receiving any real return on innovation.

Any new product, whether it be a success or failure, uses large amounts of company resources. Making incremental adjustments to existing products tends to fill the production chain, and leaves little resources for newer and more impactful innovations. The majority of organisations’ innovation inputs go into this type of incremental innovation which tends to lock down other, potentially higher impacting, innovation projects. To avoid bogging your organisation down in cyclic, incremental innovation, and to maximise value on your innovation investment, consider the following:

Create a balance with innovation output and investment by having different innovation projects running in the following categories:

1)     Incremental innovation – This is the most common form of innovation and refers to the improvement of existing products.

2)     Market innovation – This refers to the thinking behind growing an organisation’s market share, usually with disruptive innovations that pull consumers from a competitor’s brand to their own and can involve business model innovation.

3)     Radical Innovation – This denotes new, innovative products which dominate the market for a short period of time.

In memory of Satoru Iwata

Often hailed as the most innovative mind in video gaming, Nintendo’s president, Satoru Iwata, passed away recently, leaving a legacy of innovation and some big shoes to fill. Nintendo is a large video gaming company, with a market value of $22 billion dollars, and was voted as the 84^th most innovative organisation in the world, but this was not always the case.

Originally founded in 1889, the Japanese company was run by the same family for three generations. In 2002, amid dwindling sales and investment loss, Satoru Iwata was appointed as the first president of the company not tied to the founding family. With the company’s rich history spanning back more than 100 years, this was a bold move for a Japanese company. But change was needed, Nintendo’s market innovations were not paying off, since other organisations like Sony and Microsoft were dominating the sales of gaming consoles. On the software side, incremental innovations were also being overshadowed by other, more radical competitors. The future looked bleak for Nintendo.

To disrupt the downward spiral of diminishing returns on innovation, Satoru Iwata decided to do something new – radical innovation. Iwata’s first hardware release was the Nintendo DS, a handheld gaming platform. This was not really anything new, as Nintendo already had a history of handheld gaming, and at the time, Sony’s PlayStation Portable was predicted to dominate the market. What was innovative about this was how the device targeted its audience, since it was aimed at gamers and non-gamers alike, with software and apps for both markets. This is evidence of a combination of innovative approaches that considered more than one area of focus. The Nintendo DS rocketed to immense popularity in Japan, and soon the rest of the world, leaving Sony’s handheld far behind.

With such a large success in the handheld gaming platform, Iwata tried his hand at home gaming consoles. Nintendo’s last console, the GameCube, had lost out quite profoundly to Sony’s PlayStation 2, and with the launch of the PlayStation 3 on the horizon, Nintendo knew they had to respond, or risk vanishing into obscurity.

Queue 2005, Sony and Microsoft, the largest names in video gaming, are squaring off their latest innovations, the PlayStation 3 and the Xbox 360 respectively. No one would have thought that Nintendo could compete in this arena. But Iwata took the stage and introduced the Nintendo Wii. In a break from strict video gaming tradition, Iwata reveals a one-handed controller that looked more akin to a TV remote than a game controller. Risky, innovative and brave. The controller sparked much debate, but the ultimate sales figures, with Nintendo selling over 100 million units of the Wii (outselling both Sony and Microsoft), showed that the innovative new gaming console far surpassed anyone’s expectations.

The power of balancing innovation

Iwata’s radical innovations are all followed up by incremental innovations to keep relevant in the fast-paced technologies market. By following a balanced innovation plan and keeping other products relevant through incremental innovation, Iwata leaves a legacy of an innovation portfolio with a history of success. By opting for quality innovations over quantity, Nintendo’s innovations outshone two of the world’s largest technology giants.

There are many methodologies available to assist you in creating a balanced innovation portfolio. Central would be alignment with corporate goals, effective resourcing and the structuring of teams. How will you use the wisdom of the crowd and ensure that you engage with your ecosystem to drive new, more impactful results?

Innocentrix is a South African based innovation business and technology services company that provides value to clients with world-leading innovation products and services. The Innocentrix approach enables true innovation that gets our clients to where they want to go. Our client innovation programmes and the Thinkubator approach to ecosystem engagement assists organisations to drive focused innovation outcomes that leads to real world solutions.

For more information on Innocentrix, and for a complete copy of the Innocentrix Innovation League Report, please visit www.innocentrix.co.za or contact eric@innocentrix.co.za