 Innovation vs. Invention
 In the dark old days the world believed it was more profitable and better for a company to innovate rather than invent. As we look back upon history today, there is a growing feeling that maybe they were wrong. Original invention and true discovery drives humanity and mankind forward and it seems that it therefore provides greater emotional and psychic reward, keeps employees more engaged, and more effectively creates defendable niches.
Dr. Ogan Gurel and Dr. Jan Ernst Fagerberg at the Centre for Technology, Innovation and Culture at the University of Oslo differentiate between the two as follows; ’Invention is the first complete occurrence of an idea, or product, while innovation is the processes and methodology changes to advance it thereafter in bringing it into practice and to market’
Companies came to pursue incremental innovation or constant improvement versus disruptive innovation or invention. However, there is a strong belief today that companies are better poised for prosperity by serially building highly disruptive products and services.
With that being said, should large companies even attempt to invent, or simply innovate, or are they better off to buy inventions and patents then grow their acceptance and dominance by using a more powerful infrastructure? Proctor and Gamble seems to be trying to fire on all of these strategies; invention, innovation, acquisition, and exploitation through a superior network and infrastructure, all at the same time.
Arthur Lafley, the chairman of P&G has determined they cannot sufficiently innovate themselves which has led them to decide that 50% of their new product as well as product improvement ideas must come from external sources. However they are not just looking for ideas they are looking for solutions to real problems. That is to say they want to solve problems women know they have. The term women is used intentionally because the buying decision for 95% of their revenue is made by a woman.
Collecting ideas is the easy part, turning them into monetized innovations is the hard part and that is where P&G really shines. It’s their core competency.
3M believes in inventions and patents and has built their business on great simple inventions like the sticky note pad. Their success comes from interpreting what customers really want and matching this to their core competencies. Their current hottest product is a micro thin film that goes over virtually every flat video screen and enhances the brightness of the image, reducing energy use which is spectacularly important in smaller screen devices run on batteries, like smart phones and tablets.
Apple has proven the holy grail of profit is being able to identify and meet the unmet, unarticulated needs of consumers. Consumers once believed this was in contrast to P&G who pursued articulated needs like being more beautiful , having a shinier dust free floor, or removing wrinkles but now the consumer is not so sure. Is P&G sticking to articulated needs or did they always play a key role in shaping unarticulated needs? Which do you believe brings the best sustainable profits?
What is your opinion on innovation vs invention and pursuing articulated versus non articulated needs? Which is a better ROI over the long term and why?
or email your thoughts and questions to editor@community.seec.schulich.yorku.ca to continue the conversation!
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