As Peter Drucker pointed out, Innovation and Marketing are the only two true profit centers in a corporation, everything else is a cost. Within marketing, Drucker focused on bringing in new customers.
The pressure to produce growth quarter to quarter, however, often outstrips the creative abilities of the inhouse and agency teams to innovate and/or expand the user base. Some innovations take longer to develop than a quarter. And the nature of large businesses, with the silos created like shells to hide in, so as to maintain the highest degree of undisturbed autonomy and political safety, are not of ideal design for innovation, because cross-disciplinary inter-fertilization becomes virtually impossible.
Therefore, to maintain the semblance of quarter to quarter growth, the expedient becomes the fight to take away market share from competitors. This dictates that one company's growth will be another company's shrinkage. Were we able to innovate more effectively and continuously, we could all grow, rather than ~half of us growing and the other ~half shrinking. And innovations, being by definition the introduction of something new, bring new customers, and so growth in new customers goes hand in hand with innovation. If we could only carry out Drucker's advice, we could sustain growth and it would not necessarily be at anyone else's expense.
Jack Myers recently stated that we should spend less time competing and more time cooperating to enlarge our whole sector. Which reminded me of something and so I looked it up and checked. Yes, I found, I had recollected correctly, Arthur C. Nielsen had invented the concept of brand share in 1935. The idea of brands had been around for 4,000 years, going back to the branding of cattle in India, and after WWII the idea of a brand began to expand to contain the idea of a brand as a personality, a friend, a promise, a claim, an aggregation of experiential associations and attributes in the mind and feelings.
But brand share was itself an innovation. It helped Nielsen and his sales force to explain to marketer prospects the need for Nielsen's services, when they said, "We already know what our sales numbers are!"
Today, brand share has become even more important because of the demand for quarter to quarter growth. If not enough of it is coming from innovation, then it must come from "stealing share" from competitors. In a conceivable world where innovation is not so hard to come by, growth would be coming from new products, and mature products would not be under the unrealistic pressure they are now under, to grow forever without limits.
If companies want real long-term solutions to their business challenges and to those of society on which business depends and vice versa, they will prioritize innovation in a way that is totally centered on the needs and desires of current and prospective customers. They will appoint innovation leaders and allow them to cross silos to create collaboration excellence.
Creative, research, and other agencies are also a vital resource for innovation. Big Ideas for product innovation, to Bob Schmetterer, are the most important function of agencies, and yet that function has been hard to spot lately. Research is obviously valuable for new product innovation, and when I started at Grey a long time ago, we regularly did new product tests for P&G and other clients. Lately most "innovations" are obvious line extensions and the "research" is all too often just focus groups.
Researching innovations is hard, because respondents can't picture what you are talking about if it's truly innovative. Yet as consultant to Arbitron in the 1970s we surveyed people about "New Electronic Media" subjects including Smart TVs (there were none yet) that would suggest to you what to watch, and 76% of respondents said they wanted that.
In most cases, surveys about new products are flawed because of verbal bias and consciousness bias. Almost all surveys are verbally based, therefore eliciting comprehension and response from a small minority of brain cells. Moreover, almost all research is limited to the 5% of the brain involved in consciousness, except counting of events at a census level e.g. store audits, set top box data, digital clickstream data, frequent shopper cards, car registrations, prescription fills, etc.
The legitimate research quest for measuring the subconscious typically roams in the direction of visual rather than verbal stimuli, neuro and biometric observation, ethnographic observation, and the intuitive theories of visionary psychologists and other "social" scientists. My own journey uses naturally-occurring "counting data" at scale (masked individual household set top box data, masked individual browser data) to detect patterns which can be coded by psychological variables. All of these methods used together with creativity and collaboration excellence will enable true innovation in the future to be much more of a regular occurrence.
This applies to all spheres of life including politics/governance and the voluntary sector as well as business. The application of creativity techniques began within spiritual orders millennia ago and became widespread at agencies after WWII. There were not many books on the subject when my own came out in 1976, Mind Magic (also sold under the title Freeing Creative Effectiveness), and today such books abound, not to mention podcasts, TED videos, and more. Most larger businesses and other institutions, by not paying enough attention to any of the "createch", have become less and less innovative, allowing brand new creative garage startups to balloon into their own new oligopoly as if out of nowhere, as if overnight. Political leaders seem incapable of fresh ideas. They are not criticized much for this, so low are our expectations in terms of people acting innovatively.
This has got to change. And it will change. It is already changing. The hat and banner it currently wears is "digital" and lately "AI". But the refocus on innovation needs to umbrella over everything if we are to survive and thrive as a species and as individuals. The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.
Bill Harvey, a columnist at MediaVillage ("In Terms of ROI"), has spent more than 35 years leading the way in media research with pioneer thinking in new media, set-top box data, optimizers, measurement standards, privacy standards, the ARF Model; … read more