A Word from Nicole Hinrichs

Innovation = lifeblood of business. No matter how good your service, product, process, or business model – everything has a shelf life! Yet, while companies in general subscribe to this simple equation, most fail in doing so. In fact, for any radical innovation (meaning not those that are incremental iterations of an existing product or service) companies face a chance of 90% or above to come to nothing. Yet, why is that so? For the past 10 years, I have dedicated my line of research to understanding the psychological and cognitive side of innovation. In other words, how do we address the unknown, what happens when we try to decode the next big thing, why do we pursue the lines of thought we pursue? Here I would like to share three overarching insights that I feel are not ground-breaking if you think about them, but surprisingly difficult for most business to follow:

Technology ≠ innovation. All too often, innovation is equated with technological development. Technology for the sake of technology is not innovation. Technology is a means to an end! In fact, the best technological innovations are those that we don’t even consciously recognize as we apply them in our day-to-day life. Yet, many technical touchpoints end up being neither user-friendly, intuitive, or end up being overengineered for the purpose they were designed for. If a technological application does not serve to solve a customer problem, it has no value.

Innovation = customer-centricity. Innovation is about value creation. Yet, what many companies fail to appreciate is that the value-creation is not assessed internally, but by the customer. As Henry Ford famously said about his customers: “If there is one secret to success, it lies in the ability to get the other persons point of view and see things from that person’s angle as well as your own.” You cannot provide a solution to a problem you don’t sufficiently understand! Unfortunately, many companies I have come to study, but also the numerous interactions I have been privy to, have pointed to a simple truth for me: Most people fall in love with the solution, not with the problem.

Innovation = competition for relevance. As the adage goes “nothing is constant but change.” When thinking about change, we often only think about the context we operate in, not however the customer we operate on. Nowadays, who knows a company that does not proclaim their customer-centricity? Yet, how many go back on a regular basis to reassess, whether their customer is still who they have once defined, and the problem is still the problem you need to solve for them? Further, the way customer categorization is often-times pursued is outdated and rests on surface level criteria like age, gender, cultural background – or my personal favorite – an entire generation!

Done right, innovation allows you to compete for relevance as consumers change. Creating value in solving a problem that is relevant to them with a technology (if needed) that makes a relevant difference! I invite you to challenge these three simple points the next time you are asked to innovate!