Is ‘Innovation’ overrated?

It is the most overused term in business and innovation also has a darker, underexplored downside


Here’s a silly game. Say a word over and over again until it sounds odd. There’s a Friends episode where a stoner guy does this with “tartlets” until he says, “The word has lost all meaning”.

The scientific term for this is “semantic saturation”. The brain can’t cope with endless repetition and gives up interpreting the word, leaving only the empty sounds.

One word in business is perilously close to this. That word is “innovate”.

Everyone wants to innovate. The new Microsoft chief executive on his first day sent a memo to all employees telling them to “prioritise innovation”. He’s used the word in almost every speech, ticking it off like buzzword bingo.

The old Technology Strategy Board has rebranded as Innovate UK. In a Dilbert cartoon, the cruel Dogbert tells a meeting: “To survive you must create disruptive innovations which redefine the market.” Dilbert replies: “Does that mean the same thing as ‘Sell things that people want?’”.

There are 32,428 books with “innovation” in the title. There are more than 6,000 examples of “innovative trousers” to be found on Google.

The word is overdone. Overused. Exhausted. But is there something worse at hand. Something more worrying?

The word itself may be having a malign effect on corporations. The rush to innovate may be forcing firms to behave in risky and foolish ways.

EARLY ADOPTERS

Innovative firms are early adopters. When the NHS launched the Connecting for Health computer system, it was hailed an innovative in terms of size and design. No one had seen anything like it.

It flopped.

House of Commons oversight committee chairman Edward Leigh remarked: “This is the biggest IT project in the world and it is turning into the biggest disaster.” Around £20 billion was lost before the plug was pulled. The National Audit Office review pointed out that the NHS had no business trying to use untested technologies. Innovative software is buggy, has no support and no eco-system of third parties to offer their help. Being innovative led the NHS to catastrophe.

Entrepreneurs are encouraged to be innovative. That’s where the glory is. Henry Oakes launched a rival to the National Lottery in his early-20s. His revolutionary idea was a map of the UK, with squares being bought by punters. The draw would select a square at random. He got big money backing. The idea was totally new. It failed.

He recalls: “Part of the problem I think was that we were too busy trying to be cool: we were putting so much of our attention into being the next big thing in gaming that we lost focus on the fundamentals of what our customers really wanted.

The rush to innovate may be forcing firms to behave in risky and foolish ways

“The real problem with this myth, though, is not that it’s a cliché; it’s that it’s a damaging cliché. It’s distorting our view of what it’s like to be an entrepreneur, glossing over the difficulties with a romantic veneer. It makes us think that the best way to build a business is to come up with some brilliant, daring idea and make everyone fall in love with it. We seriously need to get a reality check.”

Mr Oakes saved his firm Geonomics by moving into gambling software – a much safer sector. He now employs 40, has global clients and last year landed £10 million in investment.

NEGATIVE OUTCOMES

Firms which believe they are innovative can distract themselves from their shortcomings. Ogilvy & Mather’s chief innovation officer Mark Lainas says: “Innovation as a word is continuously overused and abused, and is perhaps in danger of overkill. It is a word that firms hide behind when they’re yet to work out what business problem it is that they are facing.” Clear action needs clear thinking, which requires clear language.

The pressure to be innovative results in pointless novelty. The London 2012 Olympic logo was declared by brand agency Wolff Olins to be “truly innovative”. It was, but arguably at the cost of leaving behind all reference to the nation and city it was representing.

Innovating can confuse customers, not to mention the firm’s own employees. Andy Barr, boss of public relations firm 10 Yetis says big changes make marketers’ jobs so much harder. “Innovation isn’t always the best route for a brand to try and go down,” he says.

“Going overboard with innovation can lead to a certain complexity which alienates users or potential customers and that’s always the risk brands take. If you have a solid product or service that people have come to rely on and recognise, changing things too drastically or trying to fix something that isn’t broken can do more harm than good.”

Abandoning the siren call of innovation means using reliable software; using lower-cost hardware. It means milking products which you know consumers will buy.

Guinness has used the same recipe since 1759. Drinkers love the fact Guinness never changes and owners Diageo knows the product won’t fall out of fashion, unlike perhaps the dozens of innovative spirits on its books.

Opening a franchise is the least innovative way to start a business. It is also the most likely to succeed. The model is proven. The franchisee provides support. Banks love them. The British Franchise Association reports 92 per cent of franchises are profitable. Sexy? No, but sane.

To be clear, innovation has its place. The world needs Apollo 11 rockets and driverless cars. But it should be OK not to innovate. And to be open about that.