Innovation is personally very exciting for me and the most important differentiator for winning in the future, irrespective of what Industry we are in or what Product or Service we offer to the market. This is not new wisdom. We know that the single most important reasons why seemingly invincible companies either lost their significance or even disappeared off the face of the earth was lack of innovative thinking. Out of the top 500 companies that appeared in 1957 Standard and Poor’s index of the top 500, only 74 companies were alive in 1997. This means a life span of less than 40 years for some of the one-time leaders! This is even less than the career spans of the individuals who are part of them.

We have always believed that individuals may come and go, but organizations remain forever. This is another bit of conventional wisdom turned on its head!

Why does this happen?
In every market, at every juncture, incumbent companies dominate almost every industry. Established customer relationships, well-entrenched products, powerful brands, and significant scale advantages make these companies appear invincible to aspiring entrants. Yet, time and again, upstarts create a disruption in the market place —innovating on delivery, process, technology, organization structure, supply chain and more and changing the rules of the game and business models in a significant way. Initially, many of these changes start as weak signals. Being negative in nature, they are generally irritating. It’s easy for those riding on success to brush them off. Till, finally, the ground shakes beneath their feet and suddenly, they collapse. This is the story of every major game changer in the market, whether it is with transistors taking over from valves, talking movies obliterating silent movies, digital watches coming in or even personal computers taking over from minicomputers. The statement that “nobody would want a computer in the home” has been attributed to a minicomputer leader at that time. That company totally missed a revolution that was associated with one of the most important Innovations in the history of computers.

What really is Innovation? How is it different from creativity?
The simplest definition I have come across is that “Creativity is about thinking new things, whereas Innovation is about doing new things.” Innovation comes from applying creativity or applying thought. It’s about action versus just ideas. It is about implementation as much as it about design. Similarly, Innovation need not be restricted to products or technology alone. To me, Innovation applies to Innovations in business model as well as quality, productivity, service, financial discipline, employee attitudes and renewal.