Last night I listened to an interesting podcast on innovation from Harvard Business Review's Ideacast series.
The speaker was Roberto Verganti, author of a book entitled "Design Driven Innovation." The main takeaway for me lay in Verganti highlighting how several innovative products or services -- among them the Nintendo Wii, Whole Foods Market and (of course) the Apple iPhone -- turned the normal order of customer expectations for that product/service on its head. For example, the relatively simple, physical activity-oriented Wii was introduced to a market that involved ever-more-powerful game consoles that were built to encourage extremely sedentary behavior; similarly, he notes that Whole Foods Market is organized around the principle of making shopping fun (or at least more than just another chore). Verganti also makes the point that the first iPhone was actually kind of a crappy phone, as far as simple telephony is concerned -- but that it really didn't matter because the iPhone platform was as much about the sense of wonder you get from connecting with people right next to you as it was connecting to distant friends, doing business, etc.
Breaking out of the trap of incremental innovation and turning customer expectations on their heads (all while still moving more units at more margin than the competition) is difficult to accomplish, of course, but at the very least it is an interesting thought exercise to undertake. What would your Wii look like, for instance? How about your customer service division's version of Whole Foods? (And I'll bet someone here has thought about the iPhone version of their own product.)
Another interesting point made in the podcast (am sure there are even more in the book) -- Verganti says that incremental innovation often doesn't even make sense for enterprises to fund with increasingly scarce innovation budgets. Better yet, says Verganti, to swing for the fences and hope for the big payoff for a transformative innovation that will provide clear differentiation.