An Innovator’s Story: Creating a Business for Lasting Success

Back in May, I had the opportunity to do an on-stage interview with Jamie Siminoff, founder and CEO of Ring, as part of Avasant's Empowering Beyond Summit. 

Ring, the first provider of video doorbells, is an interesting case study in innovation. Siminoff founded the firm in 2013, and, despite walking away from an episode of Shark Tank with no money, grew it to disrupt the home security industry.

Siminoff eventually sold Ring to Amazon in 2018 for over $1 billion. Now, under Amazon’s ownership, he continues to manage Ring, which has grown to be the largest home security camera brand in the world.

Over on the Avasant website, I put together a summary of  Siminoff’s keynote and my on-stage interview around two broad themes:

• Lessons learned in innovation, based on Ring’s invention. 
• How to ensure success when an innovative startup is acquired by a much larger enterprise.

The research byte concludes with Siminoff’s view on how business leaders in traditional organizations can apply the lessons in innovation.

Read the research byte on the Avasant website: An Innovator’s Story: Creating a Business for Lasting Success

What Is Innovation? An Expansive View

On the business conference circuit today, innovation has become a buzzword.  It's too bad, because organizations today need to innovate as much, if not more, than ever before. So, instead of abandoning the word, let's try to recover it.

When thinking about innovation, business leaders often set the bar too high for themselves. They hear about new technologies coming out of Silicon Valley and other tech hubs around the world and they equate that with innovation. Surely, new technologies are innovations. But I would argue that view is too narrow, and what executives need is a more expansive view of innovation. Furthermore, too much focus on technology can actually lead to a lack of real innovation.

Innovation Is Something New--For You

According to Merriam-Webster, the word innovation has two meanings. First, it is "a new idea, device, or method." This generally fits the common understanding of innovation. But the second definition is, "the act or process of introducing new ideas, devices, or methods." The first definition is the new thing itself, while the second definition is the introduction of that new thing.

Smartphones were an innovation. But the introduction of smartphones into, say, your expense reporting process, is also an innovation. In business, innovation does not just mean that you invent something new. Innovation means that you introduce a new invention into your organization.

I would take it a step further. Innovation does not just mean you do something that no one has ever done before. Innovation means you do something that you have never done before. Others may have introduced smartphones into their expense reporting process. That was innovation for them. But when you introduce them into your expense reporting process, that is innovation for you.

A few years ago, I was working as a strategy consultant to a large high tech manufacturer that wanted to "transform the customer experience." The goal was to come up with a three to five year plan of strategic initiatives, in which new technology would play a starring role. Over a period of weeks, the project team came up with a long list of ideas, such as building a customer-facing knowledge base, new mobile apps for field service engineers, and big data analytics.

But some team members were concerned that none of our ideas were "far out" enough, that top management would think we had failed to be "innovative." At one point, a team member joked about coming up with a “hologram” of a service agent, which the customer in the field could conjur up, like a spirit.

Of course, in brainstorming, no idea is too far out. But that doesn’t mean that innovation is only in far out ideas. As it turns out, the project team had many good ideas, including leveraging the company’s smart products in the field as a platform for customer service. Were other companies already doing this? Yes. But this company had not fully exploited these opportunities. Rather than worry that their ideas were not “innovative” enough, this company would be better served by actually implementing the ideas they already had. In other words, it was not a matter of inventing a new technology but of introducing a new technology to their business.

Business Process Innovation

Second, innovation is not a synonym for technology. The innovations that many organizations need today are not new technologies, but the application of available technologies to their business processes. The goal should be to simplify a process--or even better, eliminate the process.

For example, again, in customer service, what if customers could serve themselves? Or, what if customers could serve each other? The technology for customer self-service and for customer communities is now widely available from commercial software vendors. Innovation is no longer a matter of writing customer self-service applications or community platforms. The innovation today is to introduce those technologies into a specific organization.

Of course, at some point, introduction of a technology becomes so commonplace that it can no longer be considered an innovation, even if it is new for you. If you are just now getting around to using a personal computer, instead of index cards, to track your inventory, it would be hard to say you are innovating.

Nevertheless, many organizations do not focus enough on business process innovation. Even when they introduce new technologies they do not spend sufficient time ensuring that they change their business processes. The customer self-service system is installed, but service engineers do not spend time to populate the knowledge base behind it. The community platform is installed, but no one invests the time to nurture a community. The computerized inventory system is in place, but when the materials manager wants to check on-hand inventory he walks out the the warehouse, because he doesn't trust the system. In many cases, the technology does not lead to innovation because there is no business process change.

Business Model Innovation

Innovation becomes even more powerful when it means introduction of something new in the organization’s products or services. This goes beyond business process innovation to innovation in how the organization makes money. Or, in the case of a public sector organization, how it delivers its services and fulfills its charter.

Business model innovation certainly can involve introduction of a new technology. For example, Uber's business model is heavily dependent on mobile apps to match drivers with riders who are physically near by one another. Here the mobile apps do not make money directly but enable the business model.

Caterpillar is another example. Sensors built into Cat's equipment have opened up a whole new way for the company to make money by offering job site services, such as controlling compaction of soil and asphalt. Caterpillar is no longer just selling heavy equipment and maintenance contracts. The innovation is not just in the sensor technology but in the business model that it enables.

Innovation should not be a buzzword. Business leaders should take an expansive view of what innovation means for their organizations and think beyond technology to business process and business model innovation.

Related Posts

How to Become a Chief Innovation Officer
In Defense of Incremental Innovation 

The New Technology Elite: A Book and Author Review

My friend and associate Vinnie Mirchandani has written his second book, The New Technology Elite: How Great Companies Optimize Both Technology Consumption and Production. I asked Vinnie if I could write a review, and he provided a pre-release copy of his book.

I’d gotten bits and pieces of the book from Vinnie’s blog posts and excerpts he released on LinkedIn. But getting a look at the entire book is a whole other experience.

In this post, I'd like not only to review the book--I'd like to also review the author.

A Curious Mind

For regular readers of the Spectator, Vinnie needs no introduction. I’ve been quoting and linking to him for years, even before I met him in person, around 2007. Since then, we’ve become friends. Among industry analysts, Vinnie is someone I consider like-minded.

At the same time, though, Vinnie is something of a strange cat. As a former Gartner analyst and PwC sourcing executive, his background is in enterprise software and vendor management (his blog title, Deal Architect, gives that away).

But over the past several years his focus has shifted to technology innovation more generally. Ever restless, he launched a second blog, New Florence, New Renaissance, I suspect, to help him on his flights of fancy outside the walls of enterprise IT. This has taken him far afield into areas such as nanotechnology, healthcare IT, sustainability, consumer electronics, mobility, and dozens of other corners of technology innovation. From time to time I try to scoop him, by sending him a link to some cool new application of technology, when I spot it. But generally, he’s not only spotted it himself: he’s also written about it. I still try, though.

Vinnie’s interests led to his 2010 book, The New Polymaths: Profiles in Compound-Technology Innovations. There he chronicled dozens of case-studies of organizations that are leveraging a wide range of technologies to solve the world’s grand challenges and improve our lives. Now in his second book, The New Technology Elite: How Great Companies Optimize Both Technology Consumption and Production, he weaves more case-studies into a larger story.

In Vinnie's view, some organizations that are, historically, buyers of information technology, are now turning into technology providers—as they embed new technology into their products and services. Virgin America, 3M, GE, and UPS are examples. At the same time, leading technology providers, such as Apple, Google, Amazon, and Facebook are becoming examples of best business practices, such as in their data center operations, retailing units, and supply chains. He then presents a framework for understanding what these organizations have in common: their 12 key attributes.

He concludes by examining the outside influences affecting these organizations, including the regulatory environment, their impact on society at large, and the ability (or lack thereof) of sell-side financial analysts to understand it all. Lest one think Vinnie is an unabashed technology enthusiast, these last three chapters strike a counterbalance—it’s not all positive.

A Disorienting Experience

Reading the book leads to one overriding impression: the pace of technology change is unprecedented. Sure, we all know this, generally. But, most of us really don’t.

The danger for anyone in a business leadership position today is to not recognize new entrants arising from outside traditional markets. At the same time, it’s no longer enough to look at best business practices within one’s own industry. Often, it’s players in other markets that are setting the bar higher. This is a problem for today’s market leaders, their customers and suppliers, and the analysts that cover them.

Vinnie’s fast-paced writing style matches his subject matter. Just one example: in Chapter 15, Vinnie discusses how quickly GPS technology evolved from in-auto dashboard systems, to standalone GPS devices, to smartphone apps—in less than a decade. He then launches into a discussion about technologies that are being embedded in home appliances, enabling them to connect to smartphones, tablets, and other devices and how this is leading to Samsung—a consumer electronics company—to take market share away from appliance market leaders, such as Whirlpool and Kenmore. He then jumps to an analysis of how difficult it is to forecast demand for new products such as Amazon’s Kindle, or Nintendo’s Wii.

If you have attention-deficit disorder, Vinnie’s book is for you. He piles on examples one after another, barely giving time to take a breath. For the rest of us, it is disorienting. But it serves a purpose: to give the reader overwhelming evidence of the magnitude and pace of the changes taking place in all industries.

A Positive Example

Although his book is on new technologies, Vinnie’s research style is definitely old school. Today too many so-called industry analysts take the lazy way, getting nearly all of their information from vendor briefings and press releases, writing analysis that regurgitates vendor PR talking points, and rarely speaking directly to customers. As a result, they have no original insight.

Vinnie’s way requires more work, but it’s more rewarding: Do your homework, pick up the phone, talk to those at the center of the action, and learn something new.

Then, take a position. Those who engage with Vinnie on Twitter or in blog comments know that Vinnie doesn’t hedge his views. From time to time, I get into debates with him. Although sometimes I don’t agree with him, I respect that he doesn't arrive at a position lightly, and that his opinions are research-based. He doesn’t shoot from the hip. (At the same time, though, I do see an evolution of his thinking in the final version of the book, as compared to some of his earlier blog posts on the same subjects.)

So, there’s much to learn from The New Technology Elite. Moreover, there’s a lot to learn in imitating the author’s example.

The New Technology Elite can be pre-ordered from Amazon. My copy is already on order. It is now scheduled to ship in March, 2012.