Why do organisations bother to Develop, Innovate and Invent?  The motivation and drive is found in their quest to gain Advantage in markets.  They accomplish this by differentiation, an age-old tactic that draws customer attention to their bouquet.  Game, set and match.

Principles of Political Economy and Taxation (Ricardo, 1817), introduced the principle of Comparative Advantage to explain why two countries would engage international trade based on ‘best at doing’.  Rightly so, two hundred years later, the hallmark of ‘best at doing’ is recognised in trusted Brands, high-performance offerings, and differentiation; all guiding an acute ability to Develop, Innovate or Invent (create customer-value) better than any other rival.

Competitive Advantage (Porter, 1985), refined the concept of a unique and valued position relative to that of other rivals, defining competitive advantage.  Industries became known by their inert assets and activities; how their structures and operations create, retain and distribute value.  Suppliers, Manufacturers, Wholesalers, Distributors and Retailers formed a value chain to establish markets.  Breaking the tradition led to retaliation from strong buying powers, as Industries would act in self-preservation.  With such industry wide chains, structures generalised what customers ‘really want’.  Training and Sales skills were nurtured from within to retain and employ technical expertise in search of advantage and drive towards differentiation.  Ideas lead to guessing and clueless concept development lead to the pursuit of misguided activity in search of excellence; resulting in eventual, financial disaster.

With both comparative and competitive advantage, it is incumbent upon market rivals and entrants to succeed, survive and sustain all their efforts over the long-run.  This is where Innovation becomes imperative; a mere business process that provides advantage.  In any value creating Process-map, there are three phases; Procedure, Activity and Result.  The basis of Advantage can only come from unmet customer-needs and satisfied users – the basis thus rests neither in Procedure, nor in Activity -- but only in Result (outcome).

The key is then to identify how to succeed and to focus all attentions on ascertaining the criteria that will render effective Results and deliver on desired Outcomes.

The first hurdle lies with Systemic flaws.  Ideas are an organisation’s biggest deceiver, the context is derived from an organisational perspective, exaggerated intangible profits, a lack of deep understanding, and most critical, without insights into what customers are trying to accomplish.  Ideas find a fast-track in the Vision of strategic planning theatres, formulate solutions without verified unmet needs and apply remedies as silver bullets to save markets.  No wonder the ‘chasm’ of the adaption life-cycle is so deep, the void needs to absorb failed ideas.

The answer is found by gaining insights into what customer segments do perceive as ‘great customer-value’.  Value (leading to Deliverables, Results and Outcomes) is derived from rendering functional needs which fulfil an end-intent.  Value based on Activity, unfortunately leads to a focus on cost-effective outputs even if they are irrelevant or steer away from the ‘right’ result.

Innovation can lead to competitive advantage if organisations are prepared to accept:

• becoming Purpose-driven before giving in to exaggerated profit-idea traps (passion, best-at, unit of measure);
• activity is neither the basis of Advantage, nor is differentiation guided by industry assets, activities and structures (only insights will inform);
• flaws are introduced into business processes by accepting the value chains acknowledged by industry standards, norms or practices (follow the leader);
• reveal Issues, Deficiencies, Obstacles and Shortcomings that customers struggle with when trying to satisfy their intent (unmet customer-needs);
• allow the cause and effect insights resulting in non-performance, to drive new initiatives (Develop, Innovate, Invent);
• allow unmet needs to Categorise, Group and Class new segments of unfulfilled needs, non-performance and low-satisfaction to indicate a value proposition for each, with criteria for high customer-acceptance;
• business processes must yield reliable results from specified deliverables (predictable outcome), based on an architecture formulating a causal mechanism;
• capture criteria and insights into Intellectual Property informing Process-map phases and business process designs;
• a culture which engages, experiments and explores with customers identify Issues, Deficiencies, Obstacles and Shortcomings experienced.

Failure is imminent when organisations:

• pursue amorphous visions, mystical profits and grand ideas by reverse engineering from a desired competitive position to current ability;
• imitate and copy rival designs without recognising the function that the offering must provide to assist end-users;
• develop new products when an alternative exists that provides an average level of satisfaction (‘good-enough’ defined by Christensen);
• develop new products which do not yield an incremental functional performance of importance, previously lacking or over-priced;
• side-step unmet customer-needs by guessing solutions into deployment;
• do not form a bouquet of Product and Service and Offering;
• do not see the signals that alert the importance to Adapt and Mitigate (if it works don’t fix it, ...until it’s too late)
• can not innovate, develop nor invent by applying their own insights.

When innovation is no longer a priority the organisation is already boarding the jolly-roger with other pirates...