How innovation works

One of the more interesting aspects of looking at the innovation process is understanding where innovations come from. What drives the process? It is not just the standard popular image of some technological breakthrough (in the lab or in the garage or in the dorm room) that eventually becomes a product. Often times, innovation is driven by a specific customer need. That customer can be the end user -- or someone in the supply chain.

A story in today's New York Times on changes in product packaging illustrates the process. Two years ago Amazon launched a new initiative to reduce the packaging materials used in the products it sells. It especially wanted to simplify the packaging to reduce the frustration that comes with attempting to open many hermetically sealed packages. Anyone who ever felt like they needed a chainsaw to cut through the plastic packaging can immediately understand the issue.

The initiative is directly related to improving customer service. As the Times story notes, "Compared to the traditional versions of the products, frustration-free products have earned on average a 73 percent reduction in negative feedback on the Amazon site."

To carry out this initiative, Amazon is not engaged in packaging redesign itself. It is asking its supplier to ship in "frustration-free" packaging. In turn, those companies are looking to their suppliers for innovative solutions. Take the case of Phillips and its Essence electronic toothbrush. As the Times story says:

Philips asked the supplier AllpakTrojan if it could create a new package. Because manufacturers usually use one supplier for the plastic part of their packages and another for the cardboard, "even before you make anything you've lost a little efficiency in the design process," said Dave Hoover, sales manager for AllpakTrojan.

With this project, though, AllpakTrojan could use a single material, and it went through a machine just once instead of the two to three times required for the traditional package. "From design to finish, it's as efficient as it gets," he said.

Within three weeks, AllpakTrojan had designed the new container, tested it by dropping it from various heights and putting it on a vibration table and had it ready. The toothbrush's travel case protected the brush head, and cardboard compartments held the charger and toothbrush base. Without the fancy printing, shiny cardboard backing and plastic, "it's much less expensive," Mr. Hoover said. And the environmental benefit was significant: the square footage of material used was much smaller, and the cardboard was recycled and recyclable.

Philips said it was so happy with the change that it was looking to switch the packaging for other items.

-

This case tells a very different story from the "standard" linear model of innovation -- the one still embedded in our subconscious -- of research leading to technology development to product development to demonstration to commercialization. And I doubt that AllpakTrojan shows up in the statistics as being an R&D intensive company. Yet, its innovation may have a large impact on costs, the environment and customer satisfaction.

So, where is the public policy that supports and fosters this type of real-world innovation?