Redefining Innovation

IBM: The ‘next big thing’ no longer exists | CNET News.com

Whoa, not cool, and with this type of philosophy, IBM may be getting ready to toss cookies, and not just the web type of ones. “Donofrio added that innovation today is more about services, process, business models or cultural innovation than just product innovation.”

Services is a nice buzzword, but services are difficult to leverage, and still provide the value customers demand. IBM can sit on its heels for a while, and ride on its name to provide value, but its only a short term ride. Someone else will come along, and pull the carpet out from under them. Its sad, but services, leverage, and scaling, can be mutually exclusive.

Process innovation has some real potential, as unlike services, it has the potential for leverage and scaling. However, their has to be a demand, and that usually is driven by the innovation needed for new innovative product, not a demand to commoditize the old. Faster, better, and cheaper is always a good goal, but to invest money in cash cow products seems a waste, unless your goal is to extent the life cycle, and you have no competition.

Business model innovation. Hmmmm, tough one. Business and trade has been around for thousands of years. Lots of things work, lots of things fail, and the boundaries are well defined. I’m not sure that is where I would want to invest my money. If one thinks new product development is risky, what about changing business models to something new, and innovatire. I don’t see it happening, especially at a larger entity.

Cultural innovation does have some serious potential. Their is the potential to take ones market and expand it multifold through cultural innovation. The biggest issue of course is time, and it can take a very very long time. We were still refurbishing steel mill process gear designed in the 40’s almost fifty years later for numerous off shore entities, as the culture was, “if it ain’t broke, don’t fix it”…. I think the same will apply in the nuclear power industry. Bentley Neveda’s legacy gear, despite being out of production for years, is still locked in, due to a cultural political environment created by the NRC of no change… pretty much, no matter what.

The big thing is that innovation costs money. Its unpredictable time frame, combined with lower and lower margins makes investment in the dictionary type of innovations a low priority for large entities. Thus the only hope they have, is to change the definition of what innovation is, in order to keep their stock holders happy.

The saving grace for IBM, is chances are, they have a library of innovation which has not been commercialized going back 20-30 years or more. Hopefully they can ride on that until management goes through a couple replacement cycles.