Innovation Beats Invention Hands Down
I'm always a little saddened when I see people (young and old) who are unhappy with their current job or position and who spend a lot of time sitting around waiting for the next big idea to occur to them or be dropped into their laps. They're about to invent the next Facebook - just as soon as the right inspiration strikes them - and those creative juices start flowing. And it's gonna be HUGE. Sometimes in these conversations, I find myself thinking of how thin the line really is between praying and whining and how easy it is to cross. Praying for something good to happen and whining because it hasn’t yet – two sides of the same sad coin.
But that's not even the real problem. The main issue is that these people are thinking too large - not too small. They trying to invent some new killer product or service (which, in many cases, they would be unprepared and unqualified to develop and deliver) and they don't realize that there are important and substantial opportunities for important and lucrative changes and improvements sitting right there in front of them. Improvements in their current businesses - good, smart, simple and “small” ideas which could be winners for everyone involved and which they are already “experts” on. As Springsteen says: “From small things, Mama, big things one day come.” The trick is always the same. Elegance and simplicity. How little of the current way we’re doing things can we change to make a big difference?
I'm talking about the critical distinction between invention and innovation. These are two completely different and basically unrelated ideas. Innovation is quicker, easier and more profitable in almost every case than invention. Invention is about bringing new things into existence and hoping that the dogs will eat the dog food. Innovation is about applying existing and proven tools and technologies to traditional business processes in new ways in order to create new value. And by and large, no rocket science is required. You don’t have to study Ruby on Rails or learn a new set of skills on the fly in order to succeed. Innovation is about “small ball” – a succession of base hits and quick scores rather than swinging for the fences and hoping for home runs. As Warren Buffett said a long time ago: “I don’t like jumping over 7 foot hurdles, I like to find one foot bars that I can step over.”
And the most amazing thing about this process is that, in many cases, it’s not how different the new approach or solution might be, it’s how much it’s the same. How a simple shift or change can dramatically improve a product, service, or system and solve a problem or address a need that was sitting there for years and that, in retrospect, was painfully obvious. Of course, that’s what the best entrepreneurs do – they identify and implement solutions where other people don’t even see problems. Effective innovation is about seeing what everyone else may have seen and thinking what no one else has thought.
It’s not as easy as that sounds (nothing ever is), but it’s a lot easier than you might expect once you get the process started. And it is a process – a continual search for low-hanging fruit, easy targets and ways to apply tiny bits of existing and proven technology (or just better and more organized approaches) to inefficient, costly or unproductive procedures that have “always been done a certain way” in your business for no good reason or, even worse, for reasons that no one can still remember.
Let me give you a simple example. Insurance companies are desperate to know (as accurately as possible) how many miles you drive in the course of a year because that data has a direct correlation to the risks of your vehicle being involved in an accident and also to how much you should pay in insurance premiums. By and large, and even aside from fraud and sheer laziness, self-reported odometer information is woefully inaccurate. So the insurance companies continue to try to develop incentives and other ways to get their policyholders to give them this critical data in a timely and accurate fashion. To date – no such luck.
Now here’s where innovation comes into the picture. Guess who else has accurate mileage information on just about every single insured vehicle on the road today and who already records, captures and stores that data. Car dealers. Car dealers record your mileage every single time you take your car in for service. They also capture the same data every time a used car is bought or sold. They are fully-automated; the data is sitting there to be electronically retrieved 24/7 from their management systems; about 85% of all the dealer management systems in the U.S. are supplied and serviced by one of two main vendors; and all these systems already connect in multiple ways to the web.
How easy would it be to build a retrieval system that polled (and paid) all these dealers on behalf of all the insurance companies and provided timely and current mileage on every car in America on a daily basis to the insurers? Pretty darn easy because EVERY single component of the new solution is tried, tested and already up and operating and the trick is simply shifting around a few of the parts of the equation to create a whole new service and thereby a large and profitable business.
It’s just not that hard. And there are a million more opportunities just like this in every market, in every industry, and in every business just waiting to be discovered and capitalized on by smart entrepreneurs. It’s not about strokes of genius – it’s about steady, consistent, step-by-step improvement – that creates real long-term value.
PP: “You Get What You Work for, Not What You Wish for”
