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Gianpaolo (25) started the Master in International Management at IE Business School (Madrid) in April 2010. In his fourth Master blog he writes about his experience of a course on Innovation and New Products.
Through this post I would like to share with you my experience and the mind-shift I went through during the Master in Management course on “Innovation and New Products”, that I am about to finish at IE Business School. As usual, I am glad I was wrong. There is much more than what people thinks outside.
First of all let’s try the very basic stuff: what is innovation all about?
Believe it or not, close to 70% of the people would immediately say “any breakthrough invention!”… and as expected, this group (including me 5 weeks ago), would be wrong. During the lectures, our professor (she has in her CV very successful product launches, as well as some pitfalls) has done a lot of emphasis on the importance of distinguishing several things that, somehow, history and common sense has decided to put under the same umbrella: invention and innovation. Invention is a matter of just creating something “new”, regardless of the impact this new thing can cause on the user/buyer. Whereas Innovation is a matter of doing things differently: creating value for your customers/company is a MUST.
Easy stuff right?, well that is just the beginning. At this point the professor raised a question: are all innovations the same?
Why companies decide to innovate? Let me try with a similar example as the one we shared during the Master in Management course: if you sell fruits, and the guy next to you sell the same fruits, and this happen for other twenty people in the same street… what makes you different?. At the beginning while our minds/creativity are still in the “box”, and we all think is a matter of improving the product… some others might say, what about: innovating in the way you do business with people? Selling fruits online, offering delivery, or just by having someone who remembers the name of the clients and greets them personally once they enter the store. You might be surprised on how slight changes in the way things are done, or small adjustment in the product can significantly change “failure” for “success” in business.
Did Ipod bring something new to the market? Did Apple created the first portable MP3 players? Sadly I would have to say, no. They already existed In the market, but Apple certainly brought innovation in terms of improving the way users interacted and used the device: extremely easy to use (intuitive even for people over 50 years old), and through ITunes they ensured a new direct channel of distribution for music, and other types of media. In the end, was not really important who invented the MP3 players, but who made it valuable for people.
Where should we look for innovation? Obvious answer!... gather all the money you can and get the best, and the smartest people.
This is in my opinion the most interesting aspect we discussed during this course: can you or your company be experts in one or two areas? Most probably you can… but, can you be an expert in all the sciences on earth?. Answer: NO. That is why many companies, such as P&G with their initiative “Connect & develop”, have introduced as part of their day to day business the concept of Open-Innovation. This concept states that no matter how good, big, powerful you and your company are this will not ensure that you will be able to create all the technologies and the tools/techniques that will shape the immediate future. Based on this fact, the next question is? Where should we look for innovation?
Well there is no limit, just look inside and outside of your company… Just keep your eyes open, because people is willing to share (and sell) their ideas. Let’s be honest, this is a Win-Win situation: individuals (experts, universities, other smaller companies) need the money to take their ideas to the next level, and companies want to shorten their time to market to gain competitive advantage. This strategy is the same one that Google uses when they want to develop a new product. They do not start from scratch creating know-how, and so on, they pick a smaller company that is doing great in the area they want to enter and then buy it. Once the acquisition has been made, they have saved money on initial R&D and have gotten a privileged position in the new market.
I am still deciding what is going to be next on my professional career, but one thing I can tell you is that no matter if I become an entrepreneur right away, or I decide to gain experience in a company before…
This Master in Management course in “Innovation and New Products” has taught me that:
Do not try to be the best in everything you do… just to be the best in creating value for your customers… that will ensure a sustainable competitive advantage and a strong barrier to overcome for your competitors that are willing to take your position in the market. Open your eyes, and next time somebody tells you… “Innovation is up to you!”, smile. You have already someone behind you.
Hope to see you around soon,
Master in International Management Candidate 2010-2011
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