Sustainable gInnovationh #1

I participated in the morning study session of Mr. Nichiguchi, Managing Director of Frontier Research Committee of METI at Roppongi Academy Hills.  According to Mr. Nishiguchi, the definition of Innovation is a function of invention and insight to create economical and social value.

 

He is quite right.  I always had a question when I read the Nikkei newspaper which always translates the word “innovation” as “technological innovation.”  I wonder how many Japanese thought it is not true.  It is not only technological innovation that creates economic and social value but also “marketing” will create economic and social value using the existing technology.  Let me take an example of a FMCG company.  By finding consumers’ wants and needs and the wants/needs that they haven’t even realized, FMCG companies can provide goods that consumers can solve their needs/wants.  This is the “insight”.  In other words, “insight” is to search for unmet needs of consumers and provide tools/goods to solve their needs.

Peter Drucker claimed that Marketing and Innovation can create a value of society.  This is it.  However, it is outdated to connect this to mass production and mass consumption anymore. 

Well then, are marketing and innovation enough for creating social/economic value? Unfortunately not.  In order to sustain innovation, there must be appropriate human resources and management methods that are quite different from the ones for the existing business, Mr. Nishiguchi mentioned.  Especially, in Japan, it is quite difficult to achieve innovation.

One of the reasons is, according to my interpretation of what he said, Japanese tend to be good at criticizing on something that others created but not to be good at creating something from scratch.  In other words, many of us are weak on insight.  I come across many Japanese people who criticize other people’s idea but when I ask them, “then what about creating an good idea based on your criticism?” then they tend to answer, “No, I am not in charge of crating it,” or, “it is her/his responsibility but not mine.”  

Another reason is there exists no management “Eco-System” for brand-new business.  Especially, there is no systematic skill for finding issues, the concept to make solutions, and creating business model.  On top of this, even if there exists a team for innovation, the idea does not go to a stage of business model unless there is a balance between a person with creativity and the one with execution.  When there is a team with many creative staffs, the execution team would not execute the plan thinking “this is the most unrealistic plan that we have ever seen,” but instead saying, “it would take some time to execute in the market,” and leave it as is.

There is another case where technology and R&D are strong; they tend to believe whenever they develop a “good” product, it will sell itself without any sales & advertising efforts.  This is totally wrong.  If no one wants what the company launched in the market place no matter how the technology is outstanding, it will not be purchased by cosumers.  They should ask themselves, “Why are we developing the product?”  The product is meaningless without a theme or purpose. Unless there is a clear theme or reason, sales force would not go out to sell or store owner will not accept the product.

 

To be continued.

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