Innovation for innovation's sake

Innovation. The concept has been driving management principles for years together now that it has almost become a cliche. Entire industries have spawned in the last few years, with self-proclaimed creativity consultants and experts helping out corporations lacking the edge to beat the competition in the race for the most innovative product out there.

Many people equate innovation with business success and use them synonymously. It is almost as if innovation or the lack thereof alone can make or break a company. This innovation fever comes with its many cousins - lateral thinking, thinking out of the box and creativity. Of course, these should be, by no means, discouraged for only this vitality can churn out the next iPod or Post-it notes. But when a company gears itself for innovation and creativity alone and forgets how it affects the bottom line, you can know for sure it is headed for trouble. Innovation, for the sake of innovation, is simply not worth it.

The very concept of innovation, successful innovation that can affect your company's future, may not be what it seems. In a very insightful article on the topic, Carleen Hawn dissects the history of Apple and its corporate culture which teems with innovation and creativity. Hawn recalls how Apple almost single-handedly created the personal computer market, only to be taken over by IBM and its clones, powered by software from the then lesser-known Microsoft. What happened after that is history. Apple's decision of not to open up and license its operating system could have also considerably contributed to its low market share in the global personal computing market. As she puts its, technological innovation is what drives Apple, not business-driven. And that is the problem.

To take the exact opposite of Apple, we need to look no further than Microsoft. Technological innovation has not been the company's strongpoint. But when it comes to business-models, Microsoft is second to none. Gates and co saw an opportunity to bundle their very first operating system (which wasn't designed by them, as a matter of fact) with IBM's PCs, thus getting access to a very large customer base, with virtually no investment in distribution. What is more, Microsoft got paid by IBM for every PC that shipped with MS-DOS. The growth from a startup started by a college dropout to the software colossus that it is now is not a freak incident, it was business strategy and execution at its best.

So the next time you hear another preacher touting innovation as the only thing that can keep you going, just remember this old but very relevant quote:

"Because the purpose of business is to create a customer, the business enterprise has two, and only two, basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business." - Peter F. Drucker