When many people of think of the concept of innovation they think of dramatic, transformative changes in the way things are imagined or done. While large jumps in how things work attract a great deal of attention, the bulk of innovation generally involves making very small improvements to designs, processes and routine tasks that are done every day. These types of changes, which are often easier to plan, carry out and test, can lead to massive transformations in how businesses run.
Jumps vs Evolution ● The Coca-Cola Bottle’s 100 Year Journey ● The Amphitheatre Anglois
When we hear the word innovation we often think of bolts of inspiration that strike out of nowhere and large jumps in the way that things are conceived or done. Examples of this type of innovation include the development of the electric light bulb, the plane, the internet and the mobile phone.
While the drive to bring things which do not exist to life is a defining passion of the human race and great innovations have undoubtedly had a massive impact on human civilization, if we look carefully at how almost every type of progress occurs we can see that it often comes not from large leaps from one physical or thought state to another but rather from very small responses to immediately surrounding practical realities that combine to produce something that is only slightly better than what existed before.
The fact that most forms of progress are measured in millimeters rather than quantum leaps is particularly true in the business world. If we consider businesses that have remained in operation for significant periods of time we can see that their primary model of innovation has often been less one of divine inspiration and more of the slow, unglamorous slog through trying things out, discovering roadblocks and trying again and again.
One example of the methodical process of product evolution is the Coca-Cola bottle, which traveled a journey of over 100 years from its design in 1916 by the Root Glass Company and went through multiple iterations to reach its current form.
This type of evolution is apparent in other business models. In the area of entertainment, thanks to an article by Dominique Jando on the Circopedia website I have learned that the very first modern circus, the Amphitheatre Anglois, opened in Paris in 1782. The tumbling, rope skipping and other activities on display at these early circus events have underwent slow and steady transformation to evolve into modern circus spectacles such as Cirque de Soleil which have completely transformed the circus experience.
Henri Fayol ● The Phone of Things ● Apple Park
In addition to product and service innovations, the story of the modern corporation from the Dutch East India Company in 1602 to the present has also been one of slow evolution in not only a company’s legal structure but its many objectives and practices.
The principles of business management set forth by Henri Fayol in the early 20th century involving concepts such as division of work, unity of work and espirit de corps have been dramatically expanded and fine-tuned in ways to significantly improve business performance.
Almost every element of organizational life, from how work is conceived and organized, to where it is performed to how it is carried out has been progressively transformed. Perhaps there is no better example of this than in the area of corporate communications, which has slowly evolved from physical meetings to computers to e-mail to mobile e-mail messages.
Even offices themselves have slowly evolved beyond box-structures without windows to eco-friendly venues run by the internet of things and modern stand alone centers such as Apple Park. While on the one hand this office complex represents a stunning leap from many other work settings and facilities, from an innovation perspective it is noteworthy that many of Apple Park’s components, such as the incorporation of nature and energy efficiency, can be viewed as extensions of office elements that were already in existence.
Copycat Model Business Risks ● The Micro-Innovation Cycle
I understand that the earliest uses of the term “micro-innovation” were by Zhou Hongyi and Kai-Fu Lee. It has been reported that Kai-Fu Lee pointed out, in addressing the view that Chinese companies were merely copying other business models, that copying products could only really work if it involved some form of innovation. Zhou Hongyi has been quoted as saying that even something aethetically focused like beautifying a user interface constitutes micro-innovation.
With these ideas in mind, let’s see if we can set forth some principles of a micro-innovation cycle:
● First, the concept of micro-innovation preliminarily involves the recognition that all elements of how a business works can be broken into increasingly smaller pieces. While a consumer may view a watch as one integrated product, in fact it takes over 100 separate pieces to make the hands of a Rolex watch move. In the space industry, it incredibly takes more than 2 million parts to make a space shuttle fly. Other corporate activities, ranging from contacting potential clients to carrying out financial analysis, can similarly be broken down into small components.
● Second, once the components of a product, service or process are broken down, the next step is explore ways that they can be improved. Improvements can fall into different categories, such as speed, accuracy, safety, cost savings and overall functionality.
● Third, a framework has to be established for innovation targets which can allow those targets to be readily and effectively tested. Rather than based on an expectation of significant jumps, this should ideally involve very small objectives that can be obtained or not-obtained relatively quickly. An example of this for a gas station might be to target reducing the time that it takes for each car to be serviced. This is a goal that can be tracked and tested in real time.
● Fourth, there should be an established feedback loop where progress can be monitored and any roadblocks to improvements can be identified and carefully recorded.
● Fifth, there should be a comparison between innovation progress and product or service performance. From the perspective of creating business value, it is not enough for a product design to reflect an improvement; for the innovation to be definitely adopted it must create positive measurable business results. These results can set the stage for a continuing cycle of micro-innovation which can involve targeting new objectives.
Return on Micro-Innovation Investment
A very interesting component of micro-innovation is return on investment. With innovation strategies that are based on the jump model, innovation can be extremely costly, take a long time and by the time the innovation is ready to be put into practice the demand side of the market may have shifted so far that the innovation is no longer useful.
Because in micro-innovation the objectives are smaller and the innovation cycle is shorter, there is a greater likelihood that innovation results will be not become market obsolete. This reduction of risk in the innovation cycle should bring down internal and external costs of capital to finance innovation, which should in turn allow for further micro-innovation investments.
Conclusion
Innovation is a powerful force that can drive improved business results and create competitive advantages. While micro-innovation will not and should not fully take the place of jump or longer-term innovation models, an incremental approach to innovation can be a highly effective way for companies to gradually improve their business models, learn and grow.