Redefining Innovation: Incremental, w/ Side Effects & Transformational

togetherI don't know of many other words quite as abused as innovation. Maybe the word strategy, but that's about it.

It seems to mean everything and anything. [Reminds me of "engagement"! :]

I have personally struggled with internalizing what innovation truly means. I mean really truly. Until recently.

In preparing for my talk (Self Sustaining Innovation: Ideas for Creating A Data Driven Organization) at the JMP Summit, I found the perfect way of thinking about innovation. It came from a old Google talk given by Douglas Merrill (ex-CTO of Google). I loved the framework so much that I adapted it for my JMP presentation, and wanted to share it here with you all as well.

In his talk Douglas defined three types of innovation. I think it provides a great deal of clarity beyond the standard definition of innovation as "improving something".

#1: Incremental Innovation.

A great example of incremental innovation is. . . wait for it. . . yes you in Kansas. . . . Evolution.

incremental innovation

Life rolls forward and over time there are small improvements that add up to something significant when looked at over time (and of course usually in hindsight).

A more every day example is Kaizen popularized by the Japanese car manufactures, for example arranging parts so that they are closer to each employee improves the process ever so little bit. Enough of these improvements add up.

For me personally Microsoft's "ribbon" menu in the Office 2007 were a nice example of incremental innovation. It makes a complex product much easier to use, in turn causing a bump up in revenues for Microsoft.

Another example of a incremental innovation is "related searches" you see on the Google search results page. Or more recently the suggestions that come up when you search on google.com.

googlecom avinash kaushik

Or the "onebox" in Google's Chrome. Each small by itself, but keeps moving the ball forward.

#2: Incremental Innovation with a Side Effect.

Opposable thumbs. That's a great example of incremental innovation.

incremental innovation with a side effect 1

At some point during our evolution we (and not everyone else competing with us – woo hoo!) got opposable thumbs. An otherwise mundane development that allowed us to hold things better. This lead to tools. That lead to other delights that you now see around you.

Life rolls forward and along the way a side effect that causes significantly higher improvements.

A non-mundane example of this is Apple's creation of the iPod. Its normal Mac innovation machine produced something that redefined who Apple is as a company today.

Another example is Google's AdSense. Prior to AdSense there were other ways to monetize content on the web. But AdSense was a great side effect because it allowed any blogger, student, housewife, or big site to add text based ads to their site with greater ease and monetize content. While certainly not perfect it remains one of the most widely used monetization systems on the web. Good for Google and good for its customers (big or small).

#3: Transformational Innovation.

You'll understand why there aren't too many examples of transformational innovation in nature. That's not how, fortunately, nature works.

transformational innovation

Over the course of human history there are lots of examples of transformational innovations. The invention of the wheel. The printing press. The interweb. Lots of examples like that. Dramatically changed life for all of us. One thing, huge impact, new curve.

A much smaller business example from Google is AdWords.

Advertisements on search results pages existed before Google. Not just banners but text based results existed as well (in various forms). Google's transformational innovation was creating a auction based model for ads where the price paid for the click on the ad was directly tied to the economic value created for the advertiser.

There are other examples all around you of companies, people, organizations that have, by leveraging ideas big and small, created transformational innovation. Please share your examples via comments.

Net net. . . .

Next time someone sprout's innovation on you then my hope is that you'll think of these three types of innovation and promptly ask them what kind of innovation are they hoping to accomplish.

They'll be confused.

Draw the graphs for them.

Then ask them again which type.

And don't forget to ask them if the investment in "innovation" will be worth the ROI.

A company we all love and know spent $6.2 billion in R&D in fiscal year 2005 and $7.8 billion the year before. Yet for all that money you would be hard pressed to find even one example of Transformational Innovation from them between 2004 and today (they spent north of $5 billion each year since 2005). The best I can think of is minor incremental innovation.

For the CEO of that company I offer, with the deepest humility, this framework so that he can make this exhortation when he signs next year's R&D chq: "… and dudes when I say innovation, I mean transformational! Here's a graph from a nice blogger that shows what I expect. Note the red line!!" : )

What kind of innovation can Web Analytics empower?

web analytics tool This is a blog about web analytics, so what about us? What can we deliver?

While we all hope to achieve transformational innovation in our web based efforts using web analytics data, I have come to the realization that for the most part that is not possible.

Transformational innovation is possible on the web, and it is all around us. I am unsure that it is because of the use of web analytics data.

I feel sad saying that but unfortunately we have to be truthful and acknowledge reality.

A big reason for this (we sadly not powering transformational innovation) is because for 99.9% of the people who have access to data out there web analytics still means slapping a javascript tag or processing a log file.

Clickstream.

That simply does not have enough juice.

A far bigger reason is that there aren't enough smart Analysts around. Companies are complex bureaucracy. Web Analytics, in spite of best intentions, is still an afterthought. In a silo. Online Marketing is largely still a faith based initiative.

It is hard to admit it but it is true.

Ok if not transformational then what?

All that is not to say that web analytics can't power some forms of innovation.

If you only going to rely on your clickstream tool then really it would be hard to even to incremental innovation. If that's all you are using to make decisions, then. . . . well. . . . not much is going to happen.

To get in the innovation game on the web using data you need to get inspired by the Web Analytics 2.0 mindset and approach. . . . .

web analytics 20 2

You can improve the chances of causing repeatable incremental innovation in your company if you use a couple of the components above.

Say using Google Analytics, Omniture, CoreMetrics, NedStat etc AND using the Website Optimizer. You analyze the data and do A/B testing (or even Multivariate) and you increase the chances that you'll keep your company moving forward.

Or use the clickstream tools and also 4Q. Those two together will help you understand both the What and part of the Why. Again customer ideas flow in, you execute and bam (!) incremental innovation.

Now here's the great news.

I think that for each of our organizations (big or small) we, the Awesome Analytics Actuaries (A3 baby!), can actually empower incremental innovation with a side effect.

For that we need to kick it up a notch and truly execute against the Web Analytics 2.0 mindset. Fire all the cylinders!

innovation with a side effectThat means using analytics tools but also using Surveys (to get ideas from our customers), using Competitive Intelligence tools (to learn from the ecosystem), using Experimentation and Testing (to prove the HiPPO's wrong, and try new ideas), using robust Outcomes analysis (to know why what works). All that massively improves your chances that you'll find "side effects".

But it's not just tools.

It means following the 10/90 rule, it means setting up your people to be Analysis Ninjas and not Reporting Squirrels and other such cultural changes.

But it can be done. We have the power to bring about incremental innovation with side effects.

Yes we can! (Now where have I heard that before?)

Ok now its your turn.

What do you think when you hear the word innovation? Does this framework help? Would you propose an alternative? Care to share your favorite innovation? Web or otherwise.

Please share your feedback, ideas, critique. Thanks.

Comments

  1. 1

    Great article on the "innovation" concept. I am also very happy to see your reference to the "Kaizen" philosophy – a philosophy that you know that I'm fully supporting not just because I work for a Japanese car manufacturers. I even named my blog "Kaizen Analytics" :-D

    With experience, I've learned that Web Analytics should be seen as incremental innovation (sometimes with side effects if you got lucky :-)) – slow but steady improvements. This is a good approach to get successful. Building a data-driven culture takes a lot of time, especially in large corporation. Patience & perseverance are what it takes. But once you get there, it really feels great.

    See: http://www.kaizen-analytics.com/2008/08/kaizen-successful-approach-applied-to.htm

    Transformational may be work sometimes but really hard & risky if you ask me.

    Cheers!

    Michaël
    http://www.kaizen-analytics.com

  2. 2

    @Avinash;

    I like the models and think you're right and that they reflect reality.

    Your point reminds me of the book 'Good to Great – Jim Collins' 4 years after I first got it and still one of the best things I've ever read. In it he describes what makes the difference between companies that make the leap from just being good and outperforming the markets, to being great, outperforming the markets 10 fold year on year.

    If anyone reading this hasn't read it I'd give it my wholehearted endorsement.

    Back to the point, I think the innovation models you've described describe similar things to what makes good companies great companies.

    Incremental innovation & Incremental innovation with a side effect seems to be what happens to the "great" companies. There is no one thing, there are lots of little things and then bam! along comes a real winner that makes a huge difference.

    3M did it with the post it note. An interesting story. A scientist at 3M was trying to create a super strong adhesive but failed spectacularly and created a weak adhesive.

    Because 3M had a *process* in place the failed adhesive formula was documented and not discarded.

    A few years later another 3M scientist named Arthur Fry was singing in the church's choir. He used markers to keep his place in the hymnal, but they kept falling out of the book. Remembering something about a weak adhesive, Fry used some to coat his markers. Bam! The post it note, one of the most popular office accessories and hugely profitable for 3M.

    Transformational innovation rarely happens anywhere. As you say the Wheel, the printing press, the Interweb? They get invented once in a lifetime.

    Web Analytics is never going to help companies transform into giants in their field overnight, but I've been involved with many incremental improvements that have had significant effects even with pure clickstream data. Like the 3M example it depends purely on process and action taken. If there isn't a process you'll never get anywhere with Clickstream data alone. If there is a process to act on the findings then I've witnessed improvement (low hanging fruit) which eventually led to big improvements.

    That said I do agree with you that the steps become much larger much faster when you start using experience and competitive data combined with the clickstream.

    Steve.

  3. 3
    Joe Teixeira says:

    Do most company CEO / Owners out there believe in incremental innovation, or are they of the mindset that their company can invent or create the next "wheel"?

    There are really only a handful of "great" companies out there, and I am sure that they all, at some level, have adopted the idea of incremental innovation in their day-to-day business. However I really feel that the majority of businesses do not believe or even are aware of this concept – I guess if they did, there would be thousands of Google's out there…

  4. 4

    Avinash, you wrote "A company we all love and know spent $6.2 billion in R&D in fiscal year 2005 and $7.8 billion the year before."
    So, that means that Google decreased R&D spendings from $7.8 billion in 2004 to $6.2 billion in 2005?

    How much of it was spent in [R]esearch and how much in [D]evelopment?

    I think Research spendings should be smaller.
    It's better to fuel R&D by acquisition of great technologies. Good example is the purchase of YouTube for $1.6B.

    Of course the best innovations happened inside of Google in ~1996 to ~2000 and was done in big part by founders themselves (Google Search, AdWords).

    Unfortunately we don't really know how to replicate innovation success of early Google.

  5. 5

    hello avinash,

    you might like this definition of innovation:
    "research is converting money into new knowledge; innovation is turning new knowledge into money."

    or BMW's definition:
    "something new which has value for the customer and market success."

    what you call "innovation with side effects" is sometimes called a "platform innovation", since it provides a basis for subsequent developments.

    transformational innovations are more usually called radical innovations or breakthrough innovations, or sometimes game-changing innovations.

    all the best

    graham

  6. 6
    Alice Cooper's Stalker says:

    Avinash,

    A great and unexpected topic to find in your blog.

    I agree with your first comments about innovation and strategy being abused words. I think that these are words that everybody wants on their resumes. They spin something that they did as being innovative or strategic just to get those terms on their resumes.

    Is putting peanut butter flavored cream inbetween the chocolate part of an oreo cookie instead of the traditional cream innovation? I don't know…maybe just cross-breeding of products. I'm pretty sure somebody has that listed as an innovation on their resume. Or maybe a strategic innovation. : )

    I believe that the breakdown in types of innovation that you cite are correct. You are either building a better mouse trap or you create something that is such a big leap that it changes things in a big way. I'd like to see the actual breakdown into how many innovations are incremental (better mouse trap) versus transformational (changes things in a big way). I'm guessing 98% are incremental and 2% are transformational…if that. If big enough, transformational innovations can create entire industries. I think that this is another part of the definition. Naturally, I think transformational innovations lead to a plethora of incremental innovations on that transformational innovation. Once a new revolutionary idea or innovation emerges, how do we improve it?

    I think that there are multiple reasons why there are far fewer transformational innovations.

    1. R&D is an expensive department to run. Lots of ideas turn out to not be feasible or just don't find their market. Also, new ideas can lead to new risks and liabilities for a company. Incremental innovations are safer, less costly and offer less risks. There are lots of sunk costs in R&D.

    2. It's much harder for the human brain to come up with breakthrough ideas that truely change things forever. It's much easier for the human brain to make connections and small jumps forward.

    3. Even if you have a transformational idea, I think it's harder to get others to understand it, see the value in it and buy into it. Or maybe the transformational idea person doesn't have the right skills sets to get his idea across and sell the value of it to investors. So the transformational idea dies.

    Where is there room for innovation in analytics? I see lots of opportunity for innovation with analytics tools. Not much room for transformational innovation. In the past, our data has lived in a silo. What if we start extracting it and feeding it to other applications outside of our analytics reporting boxes? So, that data is now used by applications to make decisions? I'm sure some people are doing this already, but if we think really hard, we can probably find more uses for our data than just reporting our website's performance.

    I think innovations will occur in how we capture data. Biometrics tied to Webtrends? What about allowing us to monetize specific activities on a website. Maybe a user downloads a .pdf and your company has valued somebody downloading and reading this .pdf as worth $3.00 to the company because we're making them a more informed consumer and increasing the likelihood that they will come back and buy our services.. What if we start tracking the value of activities conducted as a metric that traditionally haven't been tracked this way?

    Couple of quick notes. Avinash mentioned Douglas Merrill's definitions around innovation. Douglas has a speech on this topic on YouTube. Look up his name and the word innovation. It's 50 minutes, but it's worth the time. He spends a lot of time just talking about Google's mission and how they are using innovation to achieve it. Last 10 minutes or so talk about specific things that Google does as an organization to support innovation growth. I enjoyed this speech.

    You might look up books by Doug Hall like Jump Start Your Brain or Jump Start Your Business Brain. They get you thinking in more creative terms and Jump Start Your Business Brain talking about evaluating new ideas and trying to evaluate them to determine which ones are more likely to be profitable. Innovation management is a hot topic right now.

    A.C.'s Stalker

  7. 7
    Ned Kumar says:

    Avinash-

    Fun topic, Great post.

    Innovation is kind of a subliminal concept – on the surface it appears simple (..build a better mousetrap…) but like the onion, it has multiple layers and one has to know which layer to access and when, an under what circumstance.

    I totally agree with your incremental innovation principles (w and w/o side effects) and the only thing I would add is that from a business perspective one can pursue innovative thoughts on multiple fronts – business model, technology, processes, product offerings, channel and delivery mechanisms etc.

    However, before one jumps into ‘innovation’, I do think that you have to study your business/company philosphy, culture, and preparedness, you have to study the industry you are in to understand what your competion is doing and if it is worth pursuing parallel innovations or should you focus on something else (in the end it is all about your customers and the bottom line), look at other industries (innovation need not always be something new, it can be a new application of an existing concept), and of course, listen to your customers – your innovation is not worth a nickle if it only satisfies your curiousity and your customers hate it (One thing I want to mention here is that I don’t believe that just because something is new it is an innovation. To be an innovation, it has to satisfy a few criteria – but that is another discussion :-) ). I am willing to have a side bet that the ‘company’ you mention in your post did not have a good innovation plan in place before they started on their million dollar spending spree.

    Now to the assertion about web analytics not effecting Transformational innovation. I have the deepest respect for you and your views but on this one I am going to buck the general view :-). It is possible that Web Analytics might not in itself result in transformational innovation – however, I truly believe that it can be and will be a big contributing factor. Where I am going with this is Customer Experience and Cross-channel analytics. I think that excellence in web analytics and an ‘innovative’ process to disseminate the resulting information across channels and also receive information from other channels for the same customer can do wonderful things (enough to be transformational from my perspective) for customer experience. Of course, got to admit that I am still working towards the utopia of being able to read the customer’s intentions and serve them before they ask to be served. :-)

    Anyway, enjoyed the exchange.

  8. 8

    Steve: Process is a double edge sword. IMHO.

    No organization can grow big or scale efficiently without having a systematic approach towards "processifying" everyhing – from the most complex to the simple. It helps finds inefficiencies, it helps document, it helps in a million ways. This is the core promise of PE (Process Excellence) and Six Sigma. Having lived for five years in a company that embraced PE and Six Sigma I can tell you that it works.

    From that same experience, and having read about peer companies that do PE, I am unsure that a PE based approach can foster innovation (maybe incremental but not the other two). I say that because PE often translates into steps and bureaucracy and structured thinking and a systematic approach and looking at the now and here and us and then solving for things. Innovation requires messy unstructured thinking and "the world be dammed I think I am on to something" approach. A certain caution to the winds approach.

    In some places PE and Six Sigma allow for that, in most cases they smother innovation (the kind that changes the world, and companies).

    As I read your comment I was thinking that Motorola (a Process Excellence / Six Sigma pioneer) is probably the most process efficient company in the world. Not only did it not invent the iPhone but two years after the iPhone came out Motorola has no response. 2 Years.

    You have provided an example of 3M where it clearly works though.

    Joe: My humble observation is that every single CEO out there believes they are fostering (or demanding!) Transformational innovation. The problem is that they never stress that, and usually don't empower that either. So at best they get Incremental.

    Of course every company is capable of Transformational. A dear friend of mine wrote a blog post the other day about how in the last down turn he gave up "digital" and started selling Nutritional Supplements (totally non digital!). And he transformed that business. :)

    Dennis: They don't split the R from the D, their 10k filings with the SEC only give one big lumpsum.

    Speaking specifically of Google, I think Transformational innovation at Google probably happened in the early days. But I am constantly amazed at how much Incremental and Incremental with a Side Effects continues at Google. A good example is all the really amazing stuff with Google Maps (especially on cell phones). Or.. pick your favorite.

    The thing that is more interesting for me about Google is how it is helping foster innovation outside. For example I think the legacy of Chrome will be that every other browser will get better. Or by opening up the cell phone OS with Android the creativity of the world will be unleashed (like in the case of the iPhone applications). Or here is one of my, small, favorite examples:

    Google Visualization API Gadget Gallery

    Any humble person can do complex visualizations of data in a snap.

    Time will tell how this benefits Google, or if at all. But it is cool that it is happening.

    Graham: Thanks so much for adding the definitions, I think they are wonderful.

    Innovation -> Platform Innovation -> Radical Innovation. That works as well. :)

    Alice Cooper's S: Strategic Innovation. I love it!!!

    I concur with you that there will be innovation in how we collect data, analyze it, find insights. My focus was more on can users of data benefit enough from web analytics that they would drive innovation in their companies. A bit sad on that front. :)

    Thanks for your thoughtful responses everyone!

    -Avinash.

  9. 9
    sam says:

    Absolutely amazing concept. This reminds me of Coca Cola's launch of the new coke. It was an incremental innovation but the company did not do any analysis on customers voice and the launch was a failure.

    I think you hit right one point with the fact that analytics can play a big role in incremental innovation. Heck companies spend billions of dollars without proper analysis and its our time to be the front runners atleast in incremental innovation sector if not transformational.

  10. 10

    It's ancient history now, but what about the read/write web? (Not as ancient as opposable thumbs, I guess.)

    It seems transformational, like the printing press. Dramatically changed life for all of us, much more so than AdWords (which I love and use with vim and elan). With read/write we have blogs, user forums, peer communities, and so much more. (Commenting on experts' blog posts comes to mind.)

    But maybe you'd say it's just incremental with (biiiiig) side effects?

  11. 11

    This is Dave at TimeTrade again, in my after-hours persona, with a non-business example.

    As e-Patient Dave I'm someone who had a near-death cancer adventure last year and emerged well. I watched the whole thing with my Process & Analytics eyes, and then I found a group who's been studying healthcare transformation (and I do mean transformation, like caterpillar to chrysalis) empowered by the Web. Now I blog with them, at e-patients.net.

    Here's the transformation: the Web has empowered a radical shift in who has access to information, and that's changing the game.

    Personally, I found that the most reliable, up-to-date, action-worthy information about my disease was not on establishment web sites (which are mostly read-only btw); the best information came from my peers – patients and others with access to not-yet-published information, and with Consumer Reports-style first-hand experiences on what works, what stinks, etc.

    It's a Copernican shift, moving from doctor/hospital at the center to patient at the center. We certainly still need docs but the read-write web means we're unleashed, and that's transformational.

  12. 12
    Sandra says:

    Sometimes innovation isn't necessarily doing something completely new but rather taking something that is already being done and doing it more consistently and predictably.

    An example of this is McDonald's. Ray Kroc didn't invent the hamburger but he did invent being able to get the exact same hamburger, whether you were in New York or California, in the exact same kind of facility. This same type of innovation is demonstrated by Starbuck's. Coffee certainly was around long before that Seattle company took coffee and made it a complete "experience". I think this applies to Microsoft and the Office Suite. Certainly there were spreadsheets and word processing programs before Bill put them together. Even Google, how about take a search engine home page and make it simple. Instead of every flashing bell and whistle available, make it white, clean and easy to confront.

  13. 13
    Ellen says:

    Avinash this is a great post and discussion, and I'd like to add my two cents. As an innovation consultant, I'd say the best definition is "doing something new that adds value to the business." It's not unlike the BMW definition. The term does get misused because, as you pointed out, there are multiple dimensions for achieving something new.

    In general, I agree with the three you describe, and I would add a fourth which is internal process innovation. While it doesn't result in making an entirely new offering, it does require that the organization do something new, and it can add great value to the business.

    Also, while I agree with the basic dimensions you described, I would tweak the definitions to incorporate a consumer centric perspective. What may be perceived as a transformation to a company may be perceived as an incremental improvement to the consumer. It behooves us to take a consumer centric approach since they are the ones from whom we derive market value.

    That said, when comparing Apple to Motorola, the issue becomes more clear. Apple has a great understanding of the consumer needs they are satisfying. In fact, every new product they come out with satisfies the similar need for simplicity and intuitive interface, regardless of whether or not they are first in the category. When we look at Motorola, they had a hit product. When its life cycle started to fade, they started a scramble to find the next new product. They don't really know what made the Razr catch on in the first place.

    This is like Steve's 3M example. A technology was invented by accident, but without a consumer need it had no market value.

    When thinking about analytics, I think there is a great role to be played. Analytics can tell us what consumers are doing, and how they respond to changes. This is a great starting point for the types of behaviors and issues we would then learn about more deeply. When we get an understanding of what is important to a specific type of consumer, we can develop solutions, and analytics can tell us how well we satisfied the needs.

    The key is that all the tools need to work together in an integrated way. No single tool or definition can give us the answer for what a successful innovation should be.

    http://www.ellendiresta.com

  14. 14
    Andrew Blank says:

    Avinash – Thanks for continuing to innovate your blog. Connecting business and engineering concepts like innovation to web analytics is that blog entry from left field that completely fits.

    It seems that transformational innovation is as much about recognizing it for what it is as much as doing it. It has to "fit" into the ecosystem at hand.

    With the Post-It example, what was left out is that Art Fry spent untold hours off the clock trying to convince executives to market them. It wasn't until he handed out homemade pads and hooked the secretaries on them that it clicked.

    The same goes for any tool or method. It seems obvious now, but the internet was never supposed to be what it is today. Sharing research among academics and email was it. It wasn't until non intended users started recognizing what it could do for them that it took off.

    Sometimes the maker and recognizer is the same person. The intent is transformational because the idea is so good: http://video.google.com/videoplay?docid=1996321846673788606
    (yes, this will blow your mind at the end if you haven't seen it)

    But that doesn't guarantee anything . . .

  15. 15
    Simon Tu says:

    Brilliant post Avinash. It is very refreshing to see you presenting ideas well beyond the boundaries of material that web analytics bloggers cover.

    I believe that web analytics is still in a silo, as you mention it in your post, because we are still numbers people and don't really understand complexities of business. Maybe it does take an MBA degree to make the best of web analytics because then it is not just about numbers.

    On this blog you are providing a perfect example of the kind of person and thinking required to make web analytics successful.

    Simon.

  16. 16

    You may want to visit Geoffrey Moore's website he has some interesting breakdowns on innovation types and he has prepared some downloadable powerpoint slides. http://www.dealingwithdarwin.com/

  17. 17

    Hey Avinash,

    Terrific post. Much credit to pushing the envelope on where a discussion on web analytics can wander. For those of us trying to finance our own innovation with 'doing' web analytics, this is a pretty interesting topic. Its interesting to hear you talk about it.

    (I wonder if there's anything cooking or if its just a curiosity you chose to indulge..?)

    Everyday the challenge is not as to how much we can create or uncover, but how to uncover those simple things to help foster the steady improvements of that 'incremental innovation' while you wait to trip over the 'transformational' variety. Its my opinion that web analytic data provides plenty of good breeding grounds for both types. I know its where 4 patents we're working on came from.

    More than that, however, is the type of mill of innovation that begins to churn with each new company taking a serious interest in getting more good data. How do we get our hands on the data that points to the problems that gives us an opportunity at transformational improvements, or innovations? What tools exist to enhance the curiousness of those reluctant and creative minds afraid to succumb to living and dying by the results of statistical comparisons buried deep in dirty tables of multivariate outputs?

    As a group of people who have a bird's eye view on where to steer the ship in choppy water, I'd bet there are more than a few people whom this resonates with.

    As always Avinash…Hope all is well and your travels find you safe and happy.

    Sincerely,

    Dan Shields

  18. 18
    Cass Heaphy says:

    Hi Avinash,

    I might be wrong here but I'm pretty sure the PPC auction model you ascribe to AdWords was in fact developed and first widely used by Goto/Overture – Google AdWords was initially a CPM model. Google then adopted the PPC model – there as a legal skirmish – and some out-of-court licensing deal with Overture was done. Therefore, I think the transformational innovation would be Overture's? Anyway, I thought I had better bring this to your attention.

    My favourite recent (20C) innovation is solid state flash memory first developed for military aerospace that is now a ubiquitous part of our electronic and telecommunications revolution. Not sure if this qualifies as transformational or side effect as I'm pretty sure the Air Force generals and DARPA did not have the iPod nano in mind when they outlined the requirement for a rugged and fast memory solution for uploading and downloading data to and from their aircraft.

    Keep up the excellent work.

    Kind regards,
    Cass

  19. 19

    I guess web analytics only has a power to make innovation faster or even bring arguments for kick-off.

    Great innovation needs a gread idea. Web analytics is mathematical/statistical/technogical based – it can only give you a feedback and that's what it is designed for. So web analytics is not any source of ideas. It can be inspiration at most.

    To me it's not sad that web analytics doesn't bring transformational innovation. It is as sad as cow eats grass and give milk (not chocolate). I'm not sad because I don't expect what it can't give me.

    But! As I said web analytics can help us with this innovation. It can give us arguments that we need to do something/anything. It gives arguments that are so relevant that even CEO's or CMO's can understand them (if well presented). So I guess web analytics can do a lot to make innovation happen.

    It's like as an apple falls on the right head and new old-ideas-breaking theory becomes.

  20. 20

    What Cass said.

    Although the keyword auction was certainly refined by Google and took off under Google's leadership, the innovation was GoTo's. Google paid a princely sum to settle the patent dispute.

  21. 21
    Steven Grech says:

    Hi Avinash, great post. You haven't mentioned "disruptive innovation"… one of the most interesting innovation theories out there – the Blue Ocean ideas that change or create new markets…

    Disruptive innovations include the invention of the car, CDs (disrupted floppy disks), VoIP (Still disrupting the traditional phone system) and last but not least low cost airlines – airline travel for the masses.

    So on this note I add Google Analytics to the list of disruptive innovations – why? i believe GA has changed the landscape of the analytics industry by bringing analytics to the masses. Fantastic :)

  22. 22
    ErikJ says:

    Innovation is the most essential tool in all aspects of life business or non business. If it is not translated into the equal shares that is meant for supreme functionality the whole ship sinks so to speak.

    Remembering to always innovate and improve is what will keep things interesting especially today

  23. 23
    sharada says:

    having the customers views/opinion along would be great value add for incremental innovation

    it would be less riskier

Trackbacks

  1. […] Redefining Innovation: Incremental, w/ Side Effect & Transformational | Occam’s Razor by Avinash Kaushik […]

  2. […]
    I just read a great blog post over at Occam’s Razor – the blog by Avinash Kaushik – analytics evangelist for Google.

    The post goes on about the three kinds of innovation: incremental, incremental with side effects, and transformational.

    It’s a great read. Check it out:

    http://www.kaushik.net/avinash/2008/10/redefining-innovation-incremental-side-effect-transformational.html
    […]

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