More than a buzzword

The word innovation has been thrown around the business court for the past decade, wreaking havoc in corporations and glorifying startups.

Before innovation’s time, companies used diversification to explain their venturing into unknown territories.

But when Uber dismayed the taxi industry and Apple leapt over Microsoft’s head, executives were sent into a spin.

In fear of becoming the next disruption casualty – or the next boss crying uncontrollably down the barrel of television cameras – the term innovation was put on a pedestal in the business realm.

Innovation is typically defined as new ideas that satisfy customers. Essentially, something that hasn’t been done before that the world never knew it needed before it arrived.

To find the ultimate definition of innovation, Improvides Innovation Consulting chief executive Nick Skillicorn asked 15 experts what they thought.

The majority said innovation was an idea and successful execution.

Forty per cent said an innovative idea must be valuable to the company and its customer.

Most surprisingly, only 27 per cent described innovation as new thinking.

Does that mean we already know how to innovate but some are not conforming?

Technology and innovation are good friends. It seems that every ground-breaking idea emerges from the tech sector.

Virtual reality, artificial intelligence and mobile apps are booming and attracting big money.

Tech startup Snap Inc started with a video-sharing social media app. After launching into video eyewear and acquiring an augmented reality business, it listed on the United States stockmarket.

New Zealand’s Snap equivalent comes in the form of accounting software company Xero.

Xero actually felt a flop when it listed on the New Zealand stock exchange in June 2007. Its revival began when boss Rod Drury scored millions of dollars in funds from major investors in 2009.

It listed on the Australian stockmarket in 2012, and in 2014 briefly shot to a peak of $15.99. While the shares have fallen back to about $19 a share it is nowworth about $2.6 billion.

New Zealand is not without its sad innovation turmoil stories, either. Children’s clothing store Pumpkin Patch listed on the NZX in 2004 and rose to be worth $5 a share. Throughout 2007 the company’s worth declined. Rapidly.

Critics looking at its sliding slope may blame the 2008 global financial crash. But many believe the desire for innovation was the cause for its recent liquidation.

Internally Pumpkin Patch did not fail to innovate. Its clothing designs attracted global markets.

However, its business model opened the floodgates to copycats.

To step out of the firing line, traditional corporates have hired heads of innovation to drive their boat away from such disruption and subsequently receivership.

Our largest co-operative, Fonterra, hired an entire team of innovation experts to adopt an internal startup mentality.

Its chief executive, Theo Spierings, launched an initiative called Disrupt, encouraging any of its 20,000 staff to invent the next ground-breaking idea.

Fitting, because we are particularly great at agri-tech innovation.

So, the answer to the posed question is: No. Innovation is not just a buzzword. It is the survival kit for your business.

This Fairfax Media Innovation Series will be a show-and-tell platform for New Zealand’s innovation underground, bringing advice and examples to you weekly.

Because, as corporate strategic advisor Stefan Lidegaard told Ideatovalue.com, we should ‘‘tone down our use of the word’’ and let you see innovation at work.

The Fairfax Media Innovation Series runs in partnership with Callaghan Innovation.