How do you innovate for value

Where does innovation add the most value?

Innovation that addresses an important problem or need adds the most value.

Identifying the importance of the problem that's being solved, if there's a sizable market for a solution, and whether the solution is good and marketable enough to be adopted. You'd be surprised how often that advice is NOT used by innovative companies.



Think of DuPont and Kevlar; it was developed to be used in radial car tires. Outside of competitive racing, you just don't see it nowadays. For two whole decades, Kevlar was unprofitable and a "light at the end of the tunnel" didn't shine. At that point, DuPont considered other problems that their solution could address and started selling to the military.

Think of Apple and their string of failures. Then Steve returned and identified a need that people didn't necessarily know they had. This need was to have stylish, visible, easy to use, and reliable equipment. The solution he developed initially was the iMac; think of how different it was from all the boxy CPUs with a plethora of wires going everywhere. Apple was able to charge a premium for this and regain profitability.

Sounds simple, right? Then why do entire organizations forego thinking about this? They actually don't forget to do it, they just get blinded by other things, like:

• Cool factor
• Details; can't see the forest for the trees
• Juicy market (Google+ vs Facebook)
• Wrong assumptions about what your customer will tolerate (think of Nokia's N-gage and its complexity or monopolist businesses and their focus on milking the market vs. giving it more value; things bound to fail)
• Not trying to fulfill a need or solve a significant problem; I wrote about Cotton Candy but does it really solve an important problem?
• Talent of an individual; "If [insert star employee here] says it'll work, it'll work"

How do you address this? Be organized, track your assumptions through time and kill or continue projects according to changes. Your most important assumptions should be about the market, the advantages of your solution, the problem you are solving, and how much value your solution will capture. Build a spreadsheet, make calendar reminders, and keep things in check. For example, if the tablet market collapsed and you're building an incremental improvement, is it really worth it to continue building this product to then spend on marketing and manufacturing? Be organized and objective about when to cut your losses short.