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How to Innovate with Something Other than Product Innovation

How to Innovate with Something Other than Product Innovation

author: Lee Buttolph

If you were to ask your employees to be innovative what would be their first place they would start?

Answer: Product Innovation

Everyone thinks that product innovation is the most important and only way to innovate.  Luckily this isn't true because product innovation is most often the MOST EXPENSIVE and time consuming type of innovation.

I like to go to a quote from a great book called "It's Not Luck" by Eli Goldratt (1).


“From the supplier’s point of view, the product is the actual physical product.  This view gives limited options for improvement.  Look at it from the market’s point of view.  From the market’s point of view the product is much broader.  It includes the service that goes with it, the financial terms, the guarantee…. The product is the entire offering.”

“when we, the suppliers, talk about upgrading the product, instinctively it translates into investments in engineering, equipment, and massive amount of time.  What Pete noticed is that in order to drastically change the perception in the eyes of the market, he doesn’t have to upgrade the physical product.  He can change the periphery, the section of the offer that is not the product itself.  And this, my friends, can be done with almost no investment, and very quickly.”

“...Remember what is really determining the perception of value of a product in the eyes of the market?  It’s not the effort to produce it, it’s the benefits derived from having the product.”

“...I believe that the more powerful way to increase the perception of value of the market is through bringing additional positives.  But we can get the easiest and quickest improvements by concentrating on eliminating the negatives.  They are intimately well known to the customer, you don’t have to persuade him that they exist, and you don’t have to persuade him that he wants to get rid of them.  It’s the path of least resistance….”


So, if there are easier and cheaper ways to innovate what are they?  I recommend reading "The 12 different ways for companies to innovate" from MIT Sloan Management.  In this article they give us other viable ways that companies can be innovative (see graphic).

12 ways to innovate graph

How many ways does your company innovate?  Are you only focused on the product or do you hit many of the other innovations?

(1) Goldratt, Eliyahu M. It's not luck. North River Pr, 1994.

(2) Sawhney, Mohanbir, Robert C. Wolcott, and Inigo Arroniz. "The 12 different ways for companies to innovate." MIT Sloan Management Review 47.3 (2006): 75.