Are You Being Innovative or Responsive

Intro

I hear the word "innovative" kicked around quite a bit in corporate meetings. I've always found it fascinating how many high-level execs say "innovative" when the company is actually being "responsive". Innovation and responsiveness are two distinct concepts in business, and both are critical to a company's success. However, the term "innovation" is often used inaccurately for various reasons. So how do you know if your team is being innovative or responsive? And, as a person on the Product Team, is there a difference in how you approach either?

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What's the Difference

Innovation refers to the process of creating or introducing something new, whether it be a product, service, method, process, or business model. It often involves bold predictions, taking risks, and overcoming challenges to bring about positive change or improvement. Responsiveness, on the other hand, refers to a company's ability to quickly and effectively respond to changes in the market, customer needs, or the competitive landscape. It involves being agile and adapting quickly to shifting conditions. While both innovation and responsiveness are essential for business success, they serve different purposes. Innovation focuses on creating something new and different, while responsiveness focuses on adapting to existing conditions and staying ahead of the competition.

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Examples of Responsive and Innovation Solutions

A great, real-life example of both comes from Netflix. As most know, Netflix was originally a mail-based DVD rental company. Netflix started in the late 1990s, and DVDs were a relatively new concept. Where most called this start-up innovating, it was actually responsive. DVDs were already beginning to become widely used and even hit the shelves of Blockbuster. The DVD's smaller dimensions and weight made it affordable to ship. Purchasing online was a new concept, but one that was trending upwards. Lastly, the Blockbuster late fee was so outrageous and a poor customer experience that it was often joked about in popular culture. Netflix spent the next decade continuously improving their product and customer experience with quantitative and qualitative research of their customers.

Netflix's move into streaming was innovative. Dial-up internet would not be surpassed by broadband internet until 2004, and it still wasn't very fast. Netflix predicted that this technology would improve considerably and that the new, untested streaming video market would exponentially grow. At the time, Netflix's subscription rate doubled yearly for their DVD-rental business. And for some, moving into an unproven market was madness, and considered irresponsible to take resources away from their cash cow. But by 2007, Netflix launched its streaming online media service. By making this move, Netflix was able to capitalize on the growing trend of cord-cutting and position itself as a leader in the streaming video market. In addition, this move allowed the company to differentiate itself from competitors and build a loyal fan base around its innovative content distribution model.

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Why Companies Mistake the 2 Terms

In my 15 years of creating digital experiences for start-ups, agencies, and Fortune 50 companies, I've noticed that there are different reasons that companies wrongly claim that their responsiveness is innovation. Here are the four most common reasons people mix "Innovation" and "Responsiveness."

1. Lack of understanding: The company may not clearly understand what innovation truly is and therefore confuse responsiveness with innovation.
2. Misaligned incentives: Companies may make false claims to appeal to customers, investors, or other stakeholders who value innovation, even if their proper focus is on responsiveness.
3. Pressure to innovate: In today's fast-paced and competitive business environment, companies may feel pressure to market themselves as innovative in order to stand out and gain an edge over competitors.
4. Marketing tactic: Companies may use the term "innovation" as a marketing buzzword to make their products or services appear more innovative and appealing to customers, even if the changes they're making are merely responsive in nature.

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So why am I needling over semantics? First, it's important for companies to understand the difference between innovation and responsiveness and to accurately communicate their focus and goals to customers, stakeholders, and the public. Misleading claims can harm the company's reputation and credibility in the long run. Second, Product people need to understand what they are working on. Overall, while there are some similarities in the approach to tackling innovation and responsive projects, the focus and emphasis on different aspects of the design process can be quite different.

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Responsive Product Strategy

Responsive product strategy is what most product people address daily. A responsive project focuses on identifying and solving a problem that already exists in the product, business model, or external experience. You might also be addressing a need that has emerged from changes in the market or customer behavior. There are usually data exposing the problem. There's an existing model that the product team can walk through and look for the shortcoming. As a product designer, I would typically spend more time understanding the current product, its users, and the problem. The product designer would also need to be skilled at quickly iterating on designs and solutions, as time is essential when responding to market or customer needs changes. The goal is to create a solution that can be implemented quickly and effectively, addressing the user's or market's immediate needs. It can be effectively measured and reiterated.

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Innovation Product Strategy

An innovation project focuses on identifying and solving a new or existing problem in a novel way. Innovation projects require a lot of ideation and exploration of new ideas and concepts. As the product designer, I would typically spend more time researching and analyzing the problem, identifying user needs and pain points, and brainstorming with a curious, diverse, cross-functional team for potential solutions. A product designer in this arena must be comfortable taking risks and exploring new approaches that may not have been tried before. The goal is to create something new and innovative to differentiate the product from competitors. There is a lot of trial and error. The product team needs to embrace failure and not be discouraged. Failure is a natural part of the innovation process and can be a valuable source of learning and growth. It's just another piece of data.

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Final Thought

Innovation and responsiveness are both important elements of product design; striking the right balance between the two can be the key to success. While innovation can help drive growth and differentiate products in the market, responsiveness allows companies to meet the needs of their customers better and adapt to changing market conditions. Ultimately, the best product design strategies will incorporate elements of both innovation and responsiveness, allowing companies to stay ahead of the curve while remaining agile and flexible in the face of changing circumstances.

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