The term Innovation hinges on a key pivot which is experience. Unless an innovation is experienced, it cannot be commercialized. There is no innovation in the absence of commercialization. And again, commercialization should not be confused with commoditization. On this premise, let’s explore further from the previous edition of this blog. We talked about two types of innovation; one that takes a concept to market (commercialization) and one that creates a larger share of market (Commoditization). The first type of Innovation relies on the ingenuity of the Invention to Innovation Cycle focusing on the Consumer Experience. The second type of Innovation focuses on the competitiveness of Innovation to Improvisation Cycle focusing on the Customer Experience. It is extremely critical to understand that these two types of Innovation are not one and the same. But in order for an enterprise to sustain growth continuously, both these forms of innovation are essentially critical.
The former Innovation is centered on New Product / Platform that must and should focus on the aspirational characteristics of a consumer in order to lead a market. Any product that is brought into the market with the intent to just compete will never survive the test of time. Because no matter what the scale of business is, there is always be a smart interloper who will usurp the customer base. Focusing on the experience of a consumer’s aspirations on the other hand targets a very specific demography and Pyschography of consumers whose experience and expression means a lot to eventual commercialization and commoditization. This duplication of intellectual property is very difficult to replicate and is unique to an institution. The experience of a Consumer is unique whereas the term Customer applies to a shared universe.
What is experience then? It is not just an accumulation of signals that our senses can recognize. It is about introducing the self to the awe of something new and wonderful that creates cognition and a craving to covet. When the consumer actually comes in possession of such a unique creation, they become part of a system that propagates the product actively endorsing it for the world to know their possession. In fact, this would be a unique group of consumers who would pay a premium to stay in an elite club and experience a higher taste that others yearn for. This yearning then becomes the vehicle for commercialization. But this premium lasts for the limited shelf life of the novelty of the experience. This is when the commoditization needs to step in to create distribution and reach that distills the product through a process and service that is non-premium based.
I don’t think there is any dearth in understanding this concept. There certainly is a gap in implementing it. This is the difference between successful and unsuccessful innovators. The former have a continuous process of innovation instituted no matter how broken or disjointed it might be; that allows them to sustain growth. While the latter are either fireflies that burn themselves in the flow of light or never even make it to fly and be recognized.
In the context of where we are today as society and a global commerce, the rules of both the cycle of innovation are being re-written by an new demography and Pyschography of Consumers and Customers whose Aspirations as well as Expectations change more rapidly than the previous generation and are also radically different in the context of the environment and complexity of lives we lead. Unfortunately, the purse and power are controlled by those who are either slow to realize this new reality or weak to surrender to the moment of truth. There will be a revolution that will however shake them out of the reverie. The equation of power and purse has to shift sooner or later to a generation that yields a lot more the transformation and direction that the societies are taking. In this, we will see a more evolving value of innovation. Until then, it is more “Bazinga” as Sheldon Cooper would say in the “Big Bang Theory”