The Five Layers of Innovation

This article was originally featured in AdAge on July 23rd 2019

Alan Turing, WWII-code-breaker and precursor of artificial intelligence, is the new face of the UK’s 50-pound “note” (bill). The entire thing is noteworthy, but most captivating are Turing’s words inscribed on the note: “this is only a foretaste of what is to come and only the shadow of what’s going to be.” This is true in any moment of rapid change.

But labs wither away, innovation officers leave and consultants’ recommendations are eventually dismissed.

Most of the time, the definition is lacking. According to dictionaries, innovation is “the action or process of innovating” (thanks). The executive mandates are still not clear. The role descriptions are vague. The process and the practice are isolated. Too often, the corporate approach to innovation focuses simplistically on advances in technology — at the expense of developing the organization, business and society required for anything new to be implemented, monetized and adopted.

A more comprehensive approach to innovation would ask companies to: a) define the role of a particular innovation, initiative or practice in driving the business and brand forward (strategy); b) explore how to use it to convey the brand message and deliver a great experience (creative); and c) to define the plan, processes and methodologies needed to implement it successfully (operations).

But before they can do any of that, companies must specify what kind of innovation they want to prioritize and invest in. They may choose to focus on one or more of the following five layers:

Innovation in Materials
Climate change and pressures for transparency are putting innovation in materials at the core of any conversation about sourcing, production, packaging and recycling of materials across industries. Once-futuristic-sounding things like spider silk, bacterial ink or lab-grown diamonds are today’s competitive advantage. Luxury fashion brand Stella McCartney invested in making new clothes by liquifying old ones, and successfully navigated consecutive partnerships with the two biggest competing luxury conglomerates. In the meantime, just having a database of material-science startups and academic programs can help in grasping the horizon of possibility.

Customer experience innovation
Customer experience is the top reason consumers choose a brand, yet most of us are not able to give more than a couple of examples of brands that consistently deliver exceptional experiences, across the entire customer journey. Best practices still reside within a discrete step of the journey, like Danny Meyer has done in his restaurants and IKEA in its stores. There is much left to be desired in connecting different steps of the journey in a seamless flow, and this is where the biggest innovation wins will happen.

Media innovation
Streaming wars are probably the headline of 2019. At the media-buying level, most innovations promptly got entangled with the legitimate concerns of consumer privacy and brand safety. AI, AR/VR, and voice interfaces are exciting new domains, but the real media innovation challenge is in the customer-centrism and personalization, and resides among resolutely un-sexy topics like CRM, customer service, e-commerce platform management and having a single customer database.

Commerce innovation
Where, how and what we buy is constantly changing. A scenario where we order a dress that an influencer wore from Amazon Alexa can quickly be made obsolete by buying that same dress, directly on Instagram, from an influencer herself. While a lot of companies still grapple with making e-commerce and mobile commerce work in their favor, Chinese super-apps are already onto social commerce as their latest revenue stream. With their ad models under regulatory attack, the US platforms have been quick to follow. In commerce, the biggest innovation challenge is to figure out how to keep opening up new revenue streams while keeping in focus a single customer point of view.

Organizational innovation
There’s an entire field of study dedicated to the question of innovative organizations, spanning sociology, management, design, behavioral economics and psychology. The success of an innovation depends on whether or not a company is organized to develop it; at the same time, the type of innovation a company chooses to focus on shapes the organization around it. The problem is wicked, and solving it starts with understanding that organizational innovation starts with people, teams, space, knowledge sharing and projects — and not with an innovation figurehead.