Research: The Key to Innovation



When you stop any person in the street and ask them "Name companies that you consider innovative", most people will name contemporary startups such as Uber, AirBnB or Warby Parker. If you then ask them to name any established firms that they consider innovative, they may say Google, Amazon or Facebook. Oddly, blue-chip companies such as IBM, Disney, General Electric or McDonald's are rarely mentioned in the same sentence that contains the word "innovative." During their hey-day, they used to be considered innovative firms, but today, consumers often equate innovation with brand new firms. In fact, if you look back in time, these blue-chip firms used to be the young darlings of innovation during their early days. Today, are the only firms considered innovative young?

When new firms try to break into a market or create a whole new market, there is one common thing that they all do: research. As a startup, they don't really know what they are doing and hence, they have to invest a lot of time and effort to research the market and learn why something remains pervasively a pain point for a particular industry sector. So they dig deeper and deeper, peeling back the onion, asking questions, researching and testing their hypothesis as to what could solve the problem. As Albert Einstein once said, "If we knew what it was we were doing, it would not be called research."

Typically, more established firms focus their efforts less on solving the pain point which they had already conquered as the hot new startup that they once were. Instead, they focus on optimizing their marketing, improving product features, fine-tuning pricing, becoming more profitable and gaining market share. They are now knowledgeable of the market and spend less resources on researching new BIG pain points to solve. Rather, they are focused on solving their own internal pain points of increasing profitability and incremental pain points of clients using their products.

But as with all product life cycles, without innovation, the company's future goes from bright to dim. Innovation is crucial not only to spurt new growth but to stave off demise.

"What all the successful entrepreneurs I have met have in common is not a certain kind of personality but a commitment to the systematic practice of innovation." -- Peter Drucker

And that starts with research. Companies looking to bring forth innovative solutions need to be willing to look at areas that put them in the uncomfortable spot of not knowing and asking questions endlessly as to why something works (poorly) as they do today, and try to find innovative solutions to solve BIG pain points that are new to them (but could be age-old problems). Today, companies that were darlings 10 years ago that do not innovate (think Yahoo!), are left behind in the dust tinkering around with incremental solutions. Researching pain points, asking questions, and boldly imagining what could be are the keys to innovation.

The good news is that there are established companies that are still considered innovative today. Apple is a perfect example. For a desktop computer company founded in the '70s to get into the portable music player market in 2001, then the smartphone hardware market in 2007, and dominating the smartphone apps ecosystem today definitely shows how a company constantly puts itself into a situation of where they didn't have all of the answers at the beginning and simply started researching the feasibility of bringing innovative solutions to the market.

So, what new area should your firm be researching for innovation today?

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