In today's dynamic organizational landscape, the term "innovation" is everywhere. Nonprofits budget their revenues toward what they believe is innovation, hoping to increase efficiency, grow their segment, and scale their efforts. Yet, many organizations grapple with a fundamental misunderstanding of what innovation truly means. This misconception isn't just a dent in the corporate vocabulary—it’s an expensive oversight.
Innovation Misconceptions: A Costly Affair
In their quest to innovate, countless organizations pour resources into flashy tech, new hires, expansive R&D departments, and bloated department budgets. While these investments have their merit, they often miss the mark in achieving true innovation. Instead of the anticipated groundbreaking results, they're met with diminishing returns, wasted resources on iterative approaches, and stifled growth.
Why?
Because innovation isn't merely about new products, technology, process, or ideas. It's about understanding the underlying needs of your audience and addressing them effectively. Without a clear methodology to identify and cater to these needs, investments in "innovation" can quickly become bottomless pits.
A Paradigm Shift
True innovation isn't about reinventing the wheel—it's about understanding what the wheel means to those who use it. Many leaders bring to the table their experiences, assumptions, technological solutions, and processes. While all of these are valuable and have their place, they tend to pollute the early stages of identifying the audience’s need.
In its purest form, innovation begins with understanding how we can improve the desired outcomes of your audience. This is the “need”. If as a group you do not have consensus around the need and jump right into assumptions, technological solutions, process, big ideas, etc. you will miss the mark on helping your audience achieve their desired outcomes. Unfortunately, this is the approach most organizations take because well, it is all they know. Shifting from brainstorming sessions to a needs-based approach is a shift in mindset. This is often difficult because we are so comfortable with what we already know and have experienced.
Real-World Impacts of the Right Approach
Still skeptical? Let’s examine real-world results. Microsoft, facing plummeting software assurance subscription rates, embraced a needs-based methodology. The result? They revitalized their offering, resulting in a staggering increase in their year-on-year revenue by half a billion dollars.
We all know the story of Netflix and Block Buster. Netflix understood the need of the customer to be “entertainment”. How does one reach “entertainment” faster and cheaper. So, they started with DVDs. Blockbuster on the other hand didn’t understand the need. They simply focused on providing access to movies not realizing they were competing in the entertainment space (going out on a date, sports event, reading a book, etc.) When Blockbuster saw Netflix’s approach they didn’t dive deep into the need. They focused on technology and the process while Netflix invested in servers for streaming movies. Now, Blockbuster is no more.
These aren't isolated success stories. They’re testament to the unparalleled efficacy of understanding and implementing genuine innovation.
Embracing True Innovation
While the allure of “innovation” is tempting, organizations must introspect: Are they genuinely understanding and catering to underlying customer needs?
For organizations eager to sidestep the expensive pitfalls of misunderstood innovation begin with formulating your needs statement.
Get started: Learn how to formulate a needs statement.
This statement is your true north when it comes to checking yourself as you produce ideas, products, services, etc.
Stewart Severino
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