Rule number 3: Don’t confuse innovation and invention

The common misconception among executives is that to innovate you need to invent. We can argue back and forth (please do!) but gluing available patents a la Apple, amalgamating existing technology a la Toyota, reshuffling distribution channels a la Dell, is not very inventing in itself; but it is very innovating nonetheless.

Though it often leads to them, innovation does not require patents and trademarks to work. Innovation is a state of mind and a process. Invention is a subset of innovation and is the patentable result of such process. The whole innovation value chain spreads from R&D invention to power, wealth creation and well-being. Invention is only a component of such value chain. As such, a company will eventually fail if it solely focuses its efforts on trying to “invent” new things.

Here are three very obvious examples where nothing was invented, little was discovered, and no patents were registered but mutli-billion industries created.

Got cream?

How do you think frozen yogurt was “invented”? Legend says it all began in summer 1972 in Cambridge’s Harvard Square when Milk Bar owner William Silverman, began selling yogurt he had left in the freezer overnight hoping the inerrant cooling effect would attract more buyers. The frozen creamy product soon attracted long lines of blue-jeaned teeny-boppers and J. Pressed Harvard men. Frozen yogurt was born. 35 years after the global market for frozen yogurt is estimated to be worth USD 3 billion.

Rappers’ delight

What is the “coolest car of them all” on each MTV’s video: The Hummer. A tank-like imposing monster on wheels. However, today’s rappers-wannabes’ fetish used to be (still is!) an US army vehicle. In 1979 the US Army was looking for a new High Mobility Multi-Purpose Wheeled Vehicle (HMMWV, pronounced “Humvee”). AM General competed in the development of a vehicle to meet the standards of the military. The prototype HUMVEE was created. In 1983 the U.S. Army awarded a $1.2 billion contract to AM General for 55,000 HUMVEES. Production began on a vehicle dubbed the HUMMER M998. In 1991, after actor Arnold Schwartzeneger was impressed by the vehicle he used on a movie set he ordered a civilian version for his personal usage. AM General launch in 1992 a civilian model. 15 years after about 200,000 Hummers have been sold.

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“Let’s get it on!”

How do you know which martial art / fighting sport is the most lethal? Karate? No way. Wrestling ? Possibly. JuJutsu? Maybe. Thai Boxing? Most likely. The truth is nobody really knows, but to test the hypothesis, why not create a new competition where fighters from different martial backgrounds could measure their skills. In 1993 the Ultimate Fighting Championship (UFC) was born. Though an underground pay-per-view affair at first, the sport (known as mixed martial arts, MMA) has evolved in less than 10 years into a well-respected, near-trendy sport with corporate America sponsorships, muti-million dollars bouts, Sports Illustrated magazine covers and a reality show (the Ultimate Fighter) broadcasted in 38 countries. Today, the UFC grosses about a billion dollar in revenue a year and experts forecast that thanks to MMA’s amazing growth, the “new” sport will overtake boxing in terms of advertising revenues in less than five years.

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Did anyone invent anything here? Not really. Innovators look at things differently. They analyzed beyond the obvious. They are forward thinkers. They don’t think inside or outside the box. They create the box…Like Apple in its own peculiar way, the UFC assembled existing components to create something new, with no competition in sight.

Conclusion: Most of the time great innovative ideas and concepts are right in front of you, but corporate apathy will blind most willing men…Successful innovation creates new markets, produces new applications for existing products, finds new customers, tackles new customers needs, redefines landscape, makes competition irrelevant, and generates wealth; lots of it.

Next: “Recruit beyond your comfort zone”

Damien Duhamel

Managing Partner

www.clearstate.com