Phases of Innovation: 3 steps for sustained growth
“Creativity is thinking up new things. Innovation is doing new things.”—Theodore Levitt. Nice quote, but the million-dollar question is: How to execute phases of innovation successfully without dying in the process?
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1. Introduccion to phases of innovation
We have already seen methodological tools to facilitate the creation of ideas. This is the case of design thinking, for example. Although this methodology covers the execution process, its focus is to promote and direct creativity towards the needs of the public. However, if we want to maximize our chances of success in the execution process, we will need other tools.
In this article, we present a conceptual framework that describes the different phases of innovation necessary for sustained growth. The goal will be to understand how different types of innovation contribute to sustaining the potential of our ideas over time. But pay attention! We will introduce this framework through a very peculiar story.
2. The History of the Umbrella
The Umbrella is Born
The parasol has been around for millennia in Europe, but the history of the umbrella is much more recent. Its origin dates back to the early 18th century. Around that time, a Parisian merchant named Jean Marius introduced a variant of the parasol. It was lighter, foldable and, above all, waterproof. The brand-new umbrella was extremely functional, and France was quick to adopt it on a massive scale.
The story in England was different. Around 1750, inspired by his travels to France, Jonas Hanway became the first English man to use an umbrella. Some women used it already, but for Hanway, being the only man was a problem. Used by men, the umbrella was considered ridiculous, effeminate and “too French”.
Like many other innovations, the umbrella posed a threat to other businesses. In this case, the losers were the taxi carriages, which benefited from a high demand on rainy days. For this reason, taxi drivers launched a fierce anti-umbrella campaign. Their goal was to humiliate Hanway and other London pioneers, transforming them into outcasts of society.
Hanway tried to change public perception for 30 years, but he could never see the fruits of his struggle. However, shortly after his death commercial advertisements began and the umbrella quickly became popular.
One Umbrella, Infinite Styles
Finally, 270 years later, umbrellas have changed very little. In fact, on a functional level, they haven’t changed at all! There are no invisible force fields to deflect raindrops or laser beams to evaporate them. The umbrella is basically the same Hanway used. However, on an aesthetic level, today the variants are countless.
If you’ve been paying attention, you may have noticed that the story of the umbrella—like so many other product innovation stories—has 3 key phases of innovation.
3. Phase of innovation 1 : Functional Innovation
This first phase is what we usually refer to when we speak of “innovation”. Functional innovation works on the design of a product in order to modify (or create) the intrinsic functions of a product. As a result, it allows to cover previously unsatisfied needs, through:
- More effective or efficient solutions to people’s problems. Example: Apple’s iPhone, which introduced the smartphone.
- Better experiences. Example: Airbnb doesn’t offer a new kind of accommodation, but it greatly improved the booking process.
- Incorporation of new audiences. Example: Microsoft produces special versions of its Xbox controllers destined for people with reduced mobility.
In this context, the best design is the one that goes unnoticed. That is when the design solves the customer’s problems or improves their experience in an organic and natural way.
4. Resistance to Change
Functional innovation usually generates resistance, like in England with the umbrella. Harmed sectors will do everything to stop the change and even reverse it. Airbnb, Uber, and other companies based on the gig economy model are witnesses to this. But resistance to change doesn’t come exclusively from harmed sectors. Very often, the main detractor is the public for whom our product is intended!
Humans, like all other animals, are averse to change and the risk that it entails. The selection process that guides evolution shaped us in this way. Unless it is absolutely necessary for survival or reproduction, risk-taking is a bad move. Although we may not realize it, this idea is deeply ingrained in our behavior. Even when it is beneficial to them, it will be very difficult for the public to break with the status quo that governs their life. Even more difficult if the change will be noticed by peers. The fear of being labeled as “different” is as intense as it is primitive. However, we are not all the same and risk tolerance varies from person to person. This is reflected in the innovation adoption curve, a well-documented phenomenon. In this case, as in so many others, the population is distributed symmetrically in the shape of a Gaussian bell. Innovators—those who invent or introduce new products, just as Jonas Hanway did—make up 2.5% of the population. Then, representing 13.5%, are the early adopters, who are the first to accept innovation and incorporate it into their lives. Representing the bulk of the population, the early and late majority follow, with 34% each. Finally, there are the laggards, who represent the remaining 16%.
5. Phase of innovation 2 : Communication Innovation
Within our target, the goal is for everyone to use our product, from the innovators to the laggards. As we saw in the previous section, this is an incremental process. Therefore, to get the laggards to adopt our product, we must first convince the early and late majority. And to persuade these, we must first get the early adopters on board.
Think about it: a laggard (that is, a person who tends to be conservative) will find it difficult to identify with an innovator for whom change and experimentation are a way of life. To persuade a laggard, people with a similar lifestyle need to adopt the product. In other words, the perception of risk goes down only when those we consider to be our peers perform the change successfully.
Our communication strategy should take into account this gradual persuasion process. Therefore, communication should first of all target innovators and early adopters. If you can persuade these groups, a cascade process may make it easier for the rest of the population to get on board. But with so many products on the market, convincing the public of the value of the new product and the benefits of challenging the status quo will not be easy. Your communication strategy must be excellent.
As an example, let’s consider Apple’s “Think Different” campaign. This campaign was very disruptive because it positioned Apple as an iconoclastic, rebellious company. In this way, Apple presented itself as an ally of the innovators. In other words, the company validated and encouraged the public to break the status quo. “Being different is good”. This message was key for a company in which innovation plays a key role.
6. Declining Interest
Once the population adopts a product, it becomes part of daily life, and the novelty factor goes away. Fueled by social networks and the internet, we are constantly looking for the new thing to provide us with the next adrenaline kick. We are allergic to being bored, even for a moment. In this context, we have zero tolerance for the old and the new is inherently valuable.
This graph represents the life cycle of a product:
As can be seen, once the product reaches the maturity stage, sales start to drop. In our case, the maturity stage is reached when we no longer have the capacity to make substantial improvements to our product. This is what happened to mobile phones with physical keyboards. After more than a decade of refining, there was not much room for improvement. It was at this point that, in conjunction with the introduction of the smartphone, the sales of companies such as BlackBerry and Nokia began to decline.
So, what happens when it is no longer possible to execute phases of innovation in functional aspects? Eventually, a new product will replace us, as the iPhone did with BlackBerry. However, until the replacement arrives, there is another type of phase of innovation that we can turn to.
7. Phase of innovation 3 : Aesthetic Innovation
With the new product already reaching maturity, it is still possible to innovate to sustain growth. In the context of our history, umbrellas did not change at a functional level, but their appearance did. By offering umbrellas in the shape of bananas or with neon lights, manufacturers can follow the latest trends and keep the supply dynamic. Thus, this phase of aesthetic innovation—characterized by incremental changes—encourages customers to buy new versions of our product, even though, at a functional level, there is little difference.
In this way, we can extend the life cycle of our product, boosting its sales even after maturity.
Continuing with the example of Apple, we could name this phase the “rose gold”. The iPhone is already an established product on the market, and its level of functional innovation is lower. However, Apple sustains demand in large part through aesthetic innovations, such as the introduction of this atypical color for the category.
The different phases of innovation help us to grow at different times in the life cycle of a product. The functional phase of innovation allows to break into the market with products that will frequently generate resistance from the public and the competition. Therefore, this phase of innovation must be accompanied by frequently disruptive communication strategies. The goal of this communication will be to persuade the innovators and early adopters of the population. Finally, as with the iPhone, once the product has reached maturity, aesthetic innovations will help extend its life cycle.
If only Jonas Hanway had known about this… The massive adoption of the umbrella in England would not have taken more than 30 years and Hanway could have had his revenge on the taxi drivers. But of course, it was a different time. Luckily today we understand much more about phases of innovation, and anyone can get advice from experts. So now you know: Don’t be the next Hanway!