02 Aug Understanding the innovation spectrum [PART 1]

Regardless of our histories, religions and mythologies, we’ve always held innovators to be great heroes. Remember how mankind worshiped Prometheus for bringing us fire? Similarly, we look up to and even worship pioneers like Steve Jobs, Jeff Bezos and Elon Musk.

Innovators are our modern heroes. Because the “fire” they create redefines the way we relate to things and transforms most of our core experiences. Apple changed the way we communicate and learn. Airbnb and Uber redesigned the way we travel. Amazon revolutionized how we read and how we shop. The innovations of these pioneers are radically changing our lives.

In this 2-part series, we’ll be looking at the main layers of innovation, zooming in on how Amazon fully covers the innovation spectrum and never ceases to amaze us.

The innovation spectrum

Innovation is a long journey that starts with small, incremental changes and unfolds into radical innovation, creating brand new solutions or disrupting industries. 

Falling in Promethean footsteps is not easy; it’s quite Sisyphean actually. Still, businesses can learn a lot by closely watching the innovation spectrum of these pioneers.

In his survival kit for business innovation – Innovation Inc, Mike Parsons distinguishes between the following types of innovation:  

#1 Customer experience innovation

Of all three, this type of innovation is the easiest to get into the market as it requires the least amount of resources. The downside is that it can be copied by competitors blazing fast. So, if your distinct customer experience is the core of your unique value proposition, know that your competitive edge will only last for a short amount of time.

For instance, last year Subway refreshed their store design with digital self-order kiosks for faster mobile pre-ordering. This year, Mc Donald’s announced a similar move, planning to upgrade 1,000 stores with kiosk and mobile order technology for the next two years. 

On the other hand, with this particular type of innovation, the user is constantly at the heart of things. Maybe that’s why no company has yet beaten Amazon on customer experience. Because no other business obsesses over the customer more than Amazon does. After all, CEO Jeff Bezos believes that “being customer-focused allows you to be more pioneering.” 

From the simple book store to the everything store, Amazon has continuously won over customers with seductive Prime memberships, novel ways to manage household goods (Amazon Dash Wand and Amazon Dash  Button), do shopping (Amazon Go) and place orders (Alexa voice shopping). In the second part of this series, we’ll be exploring Amazon’s full-spectrum innovation, so check in for updates.

#2 Product innovation

Coming up with an innovative product takes a bit more time and money than building an ingenious customer experience. The good news is that, once you’ve built the product, the number of customer experiences you can create on top of it increases.

For instance, when Amazon created the Kindle e-reader, not only did they create a novel piece of hardware, but they also came up with the self-publishing platform Kindle Direct Publishing. As publishing takes less than 5 minutes and books become available on Kindle stores worldwide within 24-48 hours, content creators can reach millions of readers basically overnight and for free. While authors get 70% of royalties, Amazon keeps the rest.

So, Kindle was not just about bringing into the world a new reading style and format; it was also about allowing authors to take control and publish their writings without having to go through traditional publishers. 

#3 System innovation

Because it creates big-scale changes, building innovation at this level is the hardest to achieve and the most expensive. It’s the case of new currencies, economies and ecosystems.

It can be a new way of transportation as it’s the case with Hyperloop One. The impact of this new vehicle, which travels at high speed and through low-pressure tubes, is so big that it requires a whole new approach not only to automotive design, but also to infrastructure.  Naturally, it takes a lot of time and money to make it happen.

System innovation can equally mean a new kind of money and payment network such as the Bitcoin. Or it can be a new kind of economy, like the sharing economy, which lies at the heart of Uber and Airbnb services.

Companies like Apple, Amazon, Uber, Airbnb, Tesla have inherently disrupted their industries because they fully cover the innovation spectrum. They did not stop midway – with the product or the customer experience. They built entirely new ecosystems around their pioneering products and services, while keeping customers at the center of their attention.

Tune in for Understanding the Innovation Spectrum [PART 2], where we will be looking at how Amazon builds and handles innovation on the entire spectrum. We’ll also discover the principles behind their avant-garde customer experiences, pioneering products and large-scale systems and networks.