Commentary by Ellen Domb

Why Is Innovation a Competition?

Business Week’s annual list of the top 25 innovation companies came out the same week (April 28, 2008) as the Fortune 500 list. Big difference: the Fortune 500 has an explicit algorithm involving revenue, profit, and other measurable factors. The Innovation 25 is based 80% on the opinions of people who BW has decided to poll (executives at previous winners, mostly) and 20% on financial factors (3-year averages of revenue growth, margin growth, and stock value).

If the purpose of the list is to provide best practices and lessons learned so that people in lower-ranking companies can decide how to become more innovative, I don’t think that this algorithm achieves its purpose. Yes, it is nice to see Tata in the top group, based mostly on the radical concept of the under-$2500 car, which includes a large number of business innovations, distribution innovations, and manufacturing innovations, as well as product innovations. But GM? The editors say that it is because of the electric car experiments, On-Star communications, and the new emphasis on styling. But the same week that they announced losses for the quarter of more than $3Billion? Maybe they are being rewarded for innovating during a recession/downturn, which is another major theme of this year’s articles—real innovators have to ignore the quarterly pressures from investors and make long-term commitments.

Likewise, a major theme of most of the become more innovative articles is the need to free employees from strict supervision and give them opportunity, tools, time, and encouragement to experiment with opportunities for innovation. Apparently that’s true for all except #1 on the list, Apple, which is known for the imperial-decree mode of innovation that has been so commercially successful.

I have great admiration for some of the individual innovative products/services that are showcased, and I invite readers to use them as practice study objects for TRIZ and other innovation methods. For example:

Flip video camera: Great example of “trimming” (no legacy functions—fresh look at minimal requirements) and “nested doll” (USB connector fits inside the body) and “change optical properties” (both for the flat lens and the color-coded instruction button)

Mini-Hummer: Pattern of evolution of making things smaller and smaller

Same for GE shrinking a 15 lb electrocardiograph that took 3+years and $5.4Million to develop into a 3 lb unit that took 18 months to develop for less than $500,000. Lots of business innovation (use off-the-shelf logic chips instead of custom, target rural clinics in low-income countries instead of specialty doctors in high-income countries, and putting the research in the countries to be served) as well as technical innovation.

This column is called “commentary” because it is personal observations and opinions, not detailed research. So, you have my opinion—BW’s “Best 25 Innovators” isn’t useful for those who are trying to figure out how to make their own companies more innovative. What’s your opinion?

Question 1. Is this list useful?

Question 2. Do you know any other list that is useful?

Question 3. What companies’ innovation stories have been helpful to you to improve your own organization’s innovativeness?

Use the “comments” button below, and if we get more than 10 comments (a Real Innovation/TRIZ Journal rare event) I’ll do another article on OUR readers’ opinions.

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