CHICAGO – In this second part of a three-part series on innovation, we discuss the key elements involved in fostering innovation. The third part will focus more on accelerating development. The first installment in this series explored three basic points:

1. Innovation is different from invention
2. Innovation is the realization of invention
3. Innovation often results from a combination of inventions

In this regard, fostering invention – which is often done in places like basement university labs and garages – involves creating an environment of relatively unbridled freedom.

To some extent, relative isolation from the exigencies of the real world (and influence from conventional paradigms) is also beneficial. Ironically – as the phrase “necessity is the mother of invention” would indicate – globs of money are not required and can actually inhibit the process of invention.

Because innovation involves the integration of multiple inventions and interdisciplinary combinations, the factors involved in fostering innovation are quite different and in some ways almost opposite those that stimulate invention. Here are a few high points.

Invention needs to be left free while innovation needs to be managed.

It has often been said that invention abhors management and to some extent this is true. However, because innovation is intrinsically an interdisciplinary process, this is something that needs to be managed.

There must be management (or something euphemistically similar to that) that needs to bring together different disciplines coherently and effectively. Of course, innovation management itself needs to think innovatively (namely to think broadly about what pieces need to be brought together and to conceive of the unusual combinations that make products successful).

The development of the drug-eluting stent at button-downed Johnson & Johnson, for example, is a case in point. Much of the role of management was actually involved in crossing the cultural barriers between the pharmaceutical and device sides of the company and in moving past administrative hurdles in order to make that project successful.

The process of bringing in innovative process also needs to be managed. Whether this is done in house (as in the Johnson & Johnson example) or via external partnerships (with the IBM PC project in the early 1980s), this requires management.

Invention is often isolated while innovation is connected.

Invention often proceeds in isolation from the outside world. In fact, it can be argued that being influenced by conventional paradigms is a disadvantage for those seeking invention. Albert Einstein was one of the most inventive physicists in history. He developed his most revolutionary ideas away from the leading academic centers of the time.

In fact, while he chafed at being “banished” to oblivion as a lowly patent clerk, it may very well have been as a result of being in such academic purgatory that he was able to come up with special relativity, the quantum mechanical explanation of the photoelectric effect and the description of Brownian motion in terms of atomic theory in one miracle year.

Innovation, however, requires almost the exact opposite. In order for inventions to make sense in the market and to be commercially viable, they need to be connected to reality. This is often the fallacy of corporate programs that aim to foster innovation.

By confusing invention with innovation, they produce products that are recognized in their closed circles as being “brilliant” but nevertheless fail miserably in the market. This holds true for all manner of invention (including, for example, software development).

To some extent, this phenomenon (among other factors) was an underlying reason for the dot-com bust. Software engineers were so enamored with their creations that apart from a disconnect with basic business principles there also lacked an appreciation for what worked with the market and consumers.

Therefore, innovation requires the innovation management team to be highly attuned to the needs of the market and society more generally.

Whether it be through attending conferences (especially those outside their field), customer focus groups, tapping into one’s diverse contacts or exposure to the media, all of these are elements of fostering innovation. To this extent, the notion of being connected to the outside world leads to the importance of marketing in fostering innovation.

For invention, the product is the key. For innovation, the product, placement and promotion all need to be brought together.

The classic four “P”s of marketing are product, placement, promotion and price. G. Pascal Zachary recently published a great article in the New York Times that highlighted the importance of process innovations.

At first blush, the iPhone from Apple, the new microprocessor family from Intel and the ubiquitous Google search engine have nothing in common. One is a gadget, one is an electronic part and one is a service.

All of these products – much acclaimed for their creativity – depend on obscure process innovations that – while highly complex and lacking glamour – are an essential part of establishing a winning edge in commercial electronics.

Indeed, the success of Apple, Intel, Google and scores of other technology companies has as much or more to do with their process innovations as the products that inspire loyalty among fans and admiration from foes.

This is so true. The iPod was to some extent as an MP3 player a fairly unimaginative product. MP3 players had been around for quite a while and what was innovative about the iPod was primarily its user-friendly design features and the development of the iTunes service (think placement and promotion). This enabled customers to actually use their iPods.

Fostering innovation requires full engagement with marketing. I don’t say this in the banal sense of advertising but in terms of fundamentally reshaping or adapting the underlying inventive “product” into a package that truly meets the need of the market. This example highlights the importance of innovation as a process that must be engaged with the outside world.

Some of this may seem common sense. That’s a good thing because ultimately innovation – if it is indeed the commercial realization of invention – must (however revolutionary the underlying invention may be) make sense.

Previous Columns in 2007:
Concepts of Innovation, Invention Should Now Be Regarded Differently (9/17/2007)
The Deconstruction of Amgen: Company is Victim of Own Success (8/20/2007)
Integration of Medical Records Across Populations Still a Dream (8/6/2007)
Life Sciences Funding: Has the Private Equity Boom Peaked? (7/23/2007)
Analysis: Why the Abbott Deal With GE Healthcare Fell Apart (7/17/2007)
Stryker: The Surprising Implications of Hip-Resurfacing Implants (7/9/2007)
The Future is Bright For Life Sciences in State of Illinois (6/25/2007)
FDA: Tortoise, Hare or Something Else Entirely? (6/12/2007)
Call to Action: How to Accelerate Medical Technology in Illinois, Beyond (5/30/2007)
The ‘Innovation Gap’: Preventing Ideas From Untimely Deaths (5/29/2007)
The Diabetes Divide: Is Diabetes a Surgical or Medical Disease? (5/14/2007)
Unfolding Tragedy: ‘Balancing Act Between Innovation, Health-Care Access’ (5/1/2007)
Personalized Medicine, Tech Convergence Decisive Trends (4/16/2007)
KKR Buys First Data: On Private Equity, Pipelines, Development (4/2/2007)
What Patients Want: A Story of Choice, Trials, Evidence-Based Medicine (3/19/2007)
Gov. Blagojevich Announces IllinoisCovered to Insure 1.4 Million in Illinois (3/5/2007)
Medical Design Excellence Awards Offer Decisive Glimpse Into Future of Health Care (2/20/2007)
What’s More Important in Medicine: Diagnostics, Therapeutics or Prognosis? (2/5/2007)
Lance Armstrong and the Future of Cancer Care (1/22/2007)
Subtle But Powerful, Publication Bias Goes Beyond Financial Incentives (1/9/2007)
Click for 2006 column archive.

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