VideoThe Gillette company's website flashes out a message to the e-visitor: "Innovation is Gillette", it claims. There are few big companies that would not like to make a similar claim; for they think innovation is a bit like Botox — inject it in the right corporate places and improvements are bound to follow. But too many companies want one massive injection, one huge blockbuster, to last them for the foreseeable future. Unfortunately, successful innovation is rarely like that.
The latest manifestation of Gillette's innovative skill will appear in stores in North America next month. The global leader in men's "grooming products" is rolling out a successor to its popular three-bladed Mach3 range. It will not, as comedians had long anticipated, be a four-bladed version (Schick-Wilkinson Sword reached that landmark first, in September 2003, and Gillette has taken it to court for its pains). Rather, it will be the world's first vibrating "wet shave" blade. The battery-powered M3Power is designed to bounce around on your skin to give (yes, you guessed it) "a smoother, more comfortable shave".
For a company that claims to embody innovation, this is less than earth-shattering. On the innovation scale it falls closer to Brooks Brothers' new stain-proof tie than to the video-cassette recorder or the digital camera — especially since there is a suspicion that Gillette may be keener to create synergy between its razor and its batteries division (it owns the Duracell brand) than it is to usher in a genuinely new male-grooming experience.
But the launch is symptomatic of an important business trend: blockbuster new products are harder and harder to come by, and big companies can do much better if they focus on making lots of small things better. Adrian Slywotzky of Mercer Management Consulting says that, "in most industries, truly differentiating new-product breakthroughs are becoming increasingly rare." He claims, for example, that there has not been a single new dyestuff invented since 1956.
Even in relatively zippy businesses like pharmaceuticals, genuinely new products are fewer and further between. Spending on pharmaceutical R&D has doubled over the past decade, but the number of new drugs approved each year by America's Food and Drug Administration (the industry's key regulatory hurdle) has halved. Drug companies still live in the hope of finding a big winner that will keep their shareholders happy for a long time. But this focus means that many unglamorous, but potentially interesting, compounds may be bottled up in their laboratories.
The Road to Invention
Big companies have a big problem with innovation. This was most vividly described by Clayton Christensen, a Harvard Business School professor, in his book, "The Innovator's Dilemma" (Harvard Business School Press, 1997). Few conversations about innovation take place without reference to this influential work.
The Oxford English Dictionary defines innovation as "making changes to something established". Invention, by contrast, is the act of "coming upon or finding: discovery". Whereas inventors stumble across or make new things, "innovators try to change the status quo," says Bhaskar Chakravorti of the Monitor Group, another consulting firm, "which is why markets resist them." Innovations frequently disrupt the way that companies do things (and may have been doing them for years).
It is not just markets that resist innovation. Michael Hammer, co-author of another important business book ("Re-engineering the Corporation", HarperCollins) quotes the example of a PC-maker that set out to imitate Dell's famous "Build-to-Order" system of computer assembly. The company found that its attempts were frustrated not just by its head of manufacturing (who feared it would lead to most of his demesne, including his job, being outsourced), but also by the head of marketing, who did not want to upset his existing retail outlets. So the innovative proposal got nowhere. Dell continued to dominate the business.
Mr Christensen described how "disruptive innovation" — simpler, cheaper and more convenient products that seriously upset the status quo — can herald the rapid downfall of well-established and successful businesses. This, he argues, is because most organisations are designed to grow through "sustaining innovations" — the sort, like Gillette's vibrating razor, that do no more than improve on existing products for existing markets.
When they are hit by a disruptive innovation — as IBM was by the invention of the personal computer and as numerous national airlines have been by low-cost carriers — they are in danger of being blasted out of their market. This message found a ready audience, coming as it did just as giant businesses from banking to retailing, and from insurance to auction houses, were being told that some as-yet-unformed dotcom was about to knock them off their pedestal.
Innovative Lessons
William Baumol, a professor at New York University, argues that big companies have been learning important lessons from the history of innovation. Consider, for example, that in general they have both cut back and re-directed their R&D spending in recent years. Gone are the droves of white-coated scientists surrounded by managers in suits anxiously awaiting the next cry of "eureka". Microsoft is a rare exception, one of the few big companies still spending big bucks on employing top scientists in the way pioneered by firms such as AT&T (with its Bell Laboratories) and Xerox (with its Palo Alto Research Centre, the legendary PARC).
Reader Comments» Post a comment