Mobile Insight

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On The Importance of BMI

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Traditionally, innovation whether it be at private or public institutions has entailed huge investments — typically millions of dollars or more — into R&D work. Institutions in the past were inclined to focus innovation dollars largely on solving technological problems. This was the case at leading institutions of innovation such as Bell Labs and Xerox PARC. In fact most R&D labs at still set up that way. They are geared towards solving technical problems and there is insufficient focus on translating inventions to address tangible customer needs in ways that customers value.

John Kay in his column in the FT makes the case that the most innovative companies this decade are the ones that are able to innovate on the market needs axis. These companies are not necessarily the first ones to crack the technology puzzles. He cites Apple and the iPhone as a case in point. While there is some truth to the fact that a lot of technology that was packaged in the iPhone existed in some form or the other in various devices, Apple definitely brought something new to the table: Multitouch, Gesture Support, Visual Voicemail, Proximity Sensors, Accelerometer etc.

But this is just a minor quibble and his central point does resonate with me. In order to be disruptive and successful in today’s marketplace companies should look beyond pure technological innovation i.e. look at business model innovation and matching technology with customer needs. Kay says

Innovation is about finding new ways of meeting consumers’ needs, including ones they did not know they had. Sometimes it comes from a laboratory scientist but, more often, the innovation that changes the business landscape comes from the imagination of a Henry Ford or Walt Disney, Steve Jobs or Sir Stelios Haji-Ioannou.

There is a reason why we don’t hear much about Bell Labs or Xerox PARC these days. I would add Dell, NetFlix, Univ of Phoenix and upstarts such as EventBrite and Sungevity to the list of innovators that have either successfully changed or in the process of changing the landscape of their respective industries through their disruptive business models. Their success (or past success in the case of Dell) has less do with technology competence and more to do with fulfilling an unmet market need in an novel way. I am sure there are lots of other examples to add to this list.

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Written by Varma Chanderraju

December 17, 2009 at 5:44 pm

Posted in Innovation

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