Innovation is All About Value

Innovation is All About ValueI’ve been talking for a while now in my speeches how crucial value is to innovation. It is no consequence as a result that value sits at the center of my definition of innovation:

Innovation transforms the useful seeds of invention into solutions valued above every existing alternative – and widely adopted.

In this definition you will also see that I draw a distinction between useful and valuable, and I develop it further in my book Stoking Your Innovation Bonfire – the following is an excerpt on the topic from the book:

“Often usefulness comes from what a product or service does for you, and value comes from how it does it. If you’re looking to truly deliver innovative products and services into the marketplace, then once you succeed at the designing and developing the ‘what’, don’t forget to also focus on achieving excellence in the ‘how’.”

One of my favorite example of the useful versus valuable distinction is the mousetrap. Despite the hundreds or thousands of patent applications submitted every year for new mousetrap designs, most people still purchase the same simple snapping mousetrap that you see in cartoons and that has been around for a hundred years. The mousetrap is a great example of how easy it is to generate innovation investment opportunities and how difficult it is to create something that is truly valuable.

This distinction between useful and valuable is one that you must seek to understand and by turning this into a lens through which you can look at the potential of your innovation investment opportunities, the higher the return you will have from your innovation portfolio.

Speaking of which, maybe we should stop talking about idea generation, idea management and idea evaluation and instead begin thinking about ideas as innovation investment opportunities. Just changing the language we use in talking about innovation can change the way we think about things and the outcomes that we are able to generate. The images we choose and the language we use is incredibly important and we’ll discuss this in more detail here in a moment. But first I would like to share my innovation equation to counter the popular (innovation = idea + execution) equation. I like to say that:

Innovation = Value Creation (x) Value Access (x) Value Translation

Now you will notice that the components are multiplicative not additive. Do one or two well and one poorly and it doesn’t necessarily add up to a positive result. Doing one poorly and two well can still doom your innovation investment to failure. Let’s look at the three equation components in brief:

Value Creation is pretty self-explanatory. Your innovation investment must create incremental or completely new value large enough to overcome the switching costs of moving to your new solution from the old solution (including the ‘Do Nothing Solution’). New value can be created by making something more efficient, more effective, possible that wasn’t possible before, or create new psychological or emotional benefits
.
Value Access could also be thought of as friction reduction. How easy do you make it for customers and consumers to access the value you’ve created. How well has the product or service been designed to allow people to access the value easily? How easy is it for the solution to be created? How easy is it for people to do business with you?

Value Translation is all about helping people understand the value you’ve created and how it fits into their lives. Value translation is also about understanding where on a continuum between the need for explanation and education that your solution falls. Incremental innovations can usually just be explained to people because they anchor to something they already understand, but radical or disruptive innovations inevitably require some level of education (often far in advance of the launch).

Done really well, value translation also helps to communicate how easy it will be for customers and consumers to exchange their old solution for the new solution. My favorite example of poor value translation and brilliant value translation come from the same company and the same product launch – The Apple iPad. It’s hard to believe, but Apple actually announced the iPad with the following statement:

“Our most advanced technology in a magical and revolutionary device at an unbelievable price.”

This set off a firestorm of criticism and put the launch at risk of failure. But amazingly Apple managed to come up with the Out of Home (OOH) advertisements with a person with their feet up on a couch and the iPad on their lap (see above) by the time the product shipping. If a picture is worth a thousand words, this particular picture will probably end up being worth billions of dollars to Apple.

Never Forget!

Value creation is important, but you can’t succeed without equal attention being paid to both value access and value translation…

Because innovation is all about value…

Value Creation (x) Value Access (x) Value Translation = Success!

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Braden Kelley_LIBraden Kelley is a popular innovation speaker, builds sustainable innovation cultures, and tools for creating successful change. He is the author of the five-star book Stoking Your Innovation Bonfire and the creator of the revolutionary new Change Planning Toolkit™. Follow him on Twitter (@innovate) and Linkedin.

Braden Kelley

Braden Kelley is a Design Thinking, Innovation and Transformation Consultant, a popular innovation speaker and workshop leader, and helps companies use Human-Centered Change™ to beat the 70% change failure rate. He is the author of Charting Change from Palgrave Macmillan and Stoking Your Innovation Bonfire from John Wiley & Sons. Braden has been advising companies since 1996, while living and working in England, Germany, and the United States. Braden earned his MBA from top-rated London Business School. Follow him on Twitter and Linkedin.

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58 Comments

  1. Jose Palomio on August 7, 2011 at 7:47 pm

    I appreciate the tight linkage of innovation to the business model. It is not a goal of itself – but part of creating more value for customers, thanks!

  2. Gary Gruber on August 8, 2011 at 7:57 pm

    The equation “value creation x value access x value translation =’s success” is missing at least one important variable and that is transition. To be able to be effective, one must be able to shift a culture from one kind of practice to another and that requires some skillful transition planning and implementation. Try it without a transition plan and you will discover it’s even more difficult than you could have imagined!

    • Braden Kelley on August 8, 2011 at 11:15 pm

      Thank you for your comment Gary.

      This article is focused on the solution or innovation investment level, not the underlying foundation level, which is of course incredibly important. An organization must focus on making innovation a deep capability if it is to become capable of innovating on a repeatable basis. You can’t sustain innovation looking at it project by project, but you still need a set of guiding principals to organize your efforts around each innovation investment in order to achieve success with each one in isolation. That is what this particular article is about in addition to trying to create a simple way of thinking about innovation and focusing your efforts around innovation as you do the harder work of shifting organizational behavior…

      This is but one layer, or one piece of the innovation puzzle.

      Stay tuned for more pieces from me and the 150+ contributing authors here on Innovation Excellence…

      All the best,

      Braden
      @innovate

  3. Devin Wilbourn on August 16, 2011 at 4:12 pm

    Great thoughts, written too much like an engineer. Loosen up and your “innovative” ideas will flow more smoothly and the value will translate better.

  4. Luc Lalande on August 18, 2011 at 3:04 pm

    Thanks for highlighting a more nuanced perspective on usefulness versus value. This is often misunderstood in the context of innovation management.

  5. Chris on November 27, 2011 at 12:49 pm

    For me the difference between value creation and here the point “switching costs” and value access and here the accessement of the value is not clear enough yet. I think that low switching costs or the “do nothing solution” pretty much are the same with an easy accessibility of the product / innovation. If it takes much time or effort to access the value the switching costs are high and vice versa…

    Could you help me out and make this more clear to me

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