Thursday, 21 August 2014

The Essence of Innovation? When Needs and Solutions Meet

“Innovate!” is the imperative that today’s managers most often seem to hear. So often, in fact, that it’s easy to lose sight of what that actually means. “Innovate or die” and “Disrupt or be disrupted” have become the reigning slogans in tech circles. As Gillian Tett describes in this weekend’s Financial Times, there seems to be a race on to uncover the secret recipe that can spark creativity in any organization.

In this blog post I boil down innovation to its fundamentals. The thesis is simple: innovation occurs when needs and solutions meet. In a world obsessed with technology, it is easy to overlook this simple fact. Technology puts the focus on solutions. It has raced ahead at such a pace that we have far more solutions than we know what to do with. And the needs – often the most dire, urgent needs of humanity – are going overlooked, because their solutions are not technological. The gap between our present needs and solutions is a massive deadweight loss to society, and to close it we need much more innovation to be ‘pull-driven.’ If we can transform the ‘innovation production line’ to work on Toyota-style, demand-driven principles, we might be able to solve far more of humanity’s pressing problems1.

When do Needs and Solutions Meet?

I’ll start off with two success cases. The first is borrowed from Gillian Tett’s article. Delos Cosgrove was a heart surgeon in Ohio in the early days of open heart surgery. One of the challenges he faced day-to-day was installing a ring onto the valve in a human heart to keep it in shape. The prevailing design was a rigid ring, which didn’t work very well. To quote Tett:

“Then, some years later, Cosgrove happened to spot a kind of flexible hoop that 19th-century American women used for embroidering pieces of cloth. That’s when he had his “aha!” moment: why not utilise the sewing device and apply it to human hearts to create a valve that could move with human tissue?”
As you may guess, the invention worked, the flexible hoop replaced the rigid one and became dominant. There’s doubtless a lot more subtlety to the full story, but the principle is this: a person with detailed knowledge about a particular need came across a potential solution. Once the need and solution were ‘in the same head’ as it were, the invention could come about.

The same narrative is visible in the invention of the CamelBak hydration device (an example I learned of from Eric von Hippel). The CamelBak is essentially a backpack with a polymer bag inside, filled with water, with a tube and a valve on so that you can drink from it while exercising. It has become highly popular with runners, trekkers, and cyclists (and I’ve used it myself on many occasions). It was invented by Michael Eidson, who in 1988 was a keen cyclist trying to find an easy way to stay hydrated during long-distance races. He also happened to be an Emergency Medical Technician. He improvised a device made from an IV bag in a tube sock, and it worked. The invention was possible because the need – easy hands-free hydration – and the solution – the flexible plastic ‘bladder’ of an IV bag – were known to the same person.

Organizations which specialize in product development have systematic ways to encourage needs and solutions to meet. In a typical product development process consumers’ needs are elicited using interviews, focus groups, or ethnographic methods, and then a team works on novel ways to solve the problem. The team is inter-disciplinary, so that they can combine knowledge from different domains to come up with a solution. Companies such as IDEO have carefully honed these practices and they are on the whole effective – but the types of innovations they provide tend to be those that make life a bit easier for consumers who already have pretty comfortable lives.

When do Solutions fail to match up to Needs?

Due to the innate human fascination with science and technology, we quest after new discoveries. We often make inventions first, then later figure out what to do with them. It can take decades for the uses of a new technology to become clear, and for the ‘gale of Creative Destruction’ to blow2. A great historic example is the laser: it was discovered in the 1950s by quantum physicists investigating atomic emission spectra. Its many practical applications only became apparent later, when scientists familiar with the laser noticed and acted on the connections to possible uses3. Lasers are now ubiquitous, used in barcode scanners, printers, DVD drives and hundreds of other devices. At any given time, then, there will be a stock of technologies we don’t yet know what to do with.

Technological progress adds to that stock, while the process of ‘matching’ technologies to needs depletes it. What if technological progress accelerates? Unless the matching process also speeds up, the result is a ballooning stockpile of unused solutions. This is exactly the situation I think we are facing now.

Let me provide two contemporary examples. The first is 3D printing. The technological know-how for this has been around since the 1980s. There have been commercial uses for it since the 1990s, though the sector has only taken off in the last 5-10 years. Most experts agree that the scope of 3D printing is limitless, that it will hasten in ‘The New Industrial Revolution4.’ But we are only just figuring out how to use it. Many of the early ventures in this space arose when someone with a particular need first came across a 3D printer and noticed that it might solve the need5. There is so much more to be done with 3D printers and I am genuinely excited to find out what imaginative uses people will find for them.

Another example is drones, of the tabletop ‘quadcopter’ variety. These hit the mainstream relatively recently, relying, as they do, on miniaturized electronics and lightweight materials that have only become available in the last few years. They are a solution that is begging out for a need. So far their widest use seems to be to take breath-taking videos and photographs. This is great, but there is so much more that these devices make possible, especially if we recombine them with other technologies in imaginative ways. It would seem a waste if the best we come up with is delivering parcels for Amazon.

Winning image in a National Geographic / Dronestagram photography competition

The World is Full of Unsolved Needs

A surfeit of solutions might seem like a great thing. And it would be, except for the fact that we also have an abundance of needs, needs which these technological wonders aren’t solving. I will leave it to a future post to detail the world’s challenges, when I review James Martin’s book ‘The Meaning of the 21st Century.’ For now I’ll make two observations: (1) Even the most basic technologies for the bare minimum of living standards are failing to diffuse to the third world. Simple life-support mechanisms like running water and sanitation are only available to the richer half of the world’s population. (2) The world is facing environmental / ecological catastrophe due to over-use of finite resources and our tendency to over-pollute. Both of these look like enormous needs, or clusters of inter-related needs.

In recent history we’ve relied upon capitalist market processes to match needs and solutions. These have been enormously successful in generating the kinds of innovations that make life easier and better for rich people. But unfettered capitalism provides little economic incentive to solve problems for poor people6. Similarly, it provides no economic incentive to solve ‘tragedies of the commons’ such as our environmental problems. These needs require a different approach. They also, most likely, require innovations of a social variety rather than a technological variety. Other mechanisms exist to match needs and solutions, such as innovation contests, and latterly crowdsourcing. But new ones may need to be invented.

And thus I conclude by re-iterating my main points. Innovation occurs when needs meet solutions, and this requires them to be in the same place. Most often, in the same head. There are structured ways to try and ensure this occurs, call it ‘engineered serendipity.’ There is also a tendency for technology to be viewed as an end in itself, so that we generate myriad solutions, and bumble around in the dark until we find needs that they meet. This is a great opportunity for aspiring entrepreneurs who are familiar with an under-utilized technology. But it is also, in a sense, a waste, because right now the world has so many needs that are not being met. If we could re-engineer the production line of innovation, so that it was pull-driven instead of push-driven, we might just be able to overcome the world’s greatest challenges. 

1 We might term this ‘Lean Innovation’ but I wish to avoid confusion with the term ‘Lean Start-up’ which is rather different.
2 This insight led Schumpeter to theorize about technological causes of business cycles, an often-overlooked aspect of his work.
3 One of the laser's inventor's, Charles Townes, recalls it as "a solution looking for a problem."
4 Subtitle of the book 'Makers' by Chris Anderson [the WIRED one, not the TED one].
5 See research by Scott Shane on 'Prior Knowledge and the Discovery of Entrepreneurial Opportunities'.
6 As pointed out to me by a friend, there are some notable cases of profitable ventures serving the poor by engaging in frugal or jugaad innovation, for example the Aravind Eye Care Hospital. There is, therefore, some reason for optimism.