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Where do the truly great innovations lie?


The Next Idea

Cool, shiny, sleek:  These are the qualities we associate with top-shelf innovations.

That’s because we’re constantly confronted with magazine and Internet lists of the most innovative companies that are essentially just beauty contests. At the top of all these shimmering lists are blustery bands and glitzy gadgets and chic designers.

But take a closer look and you’ll see that these sparkly objects aren’t really the best innovations. If you used these lists as an investment tool, you wouldn’t actually beat a composite growth index like the Russell 3000— you would lose your purse, your swagger, and your assumptions about what makes an innovation valuable.

Innovation can, of course, have a big payout, just not in the way that these lists want you to believe.   

True innovation happens behind the scenes.

Sure, new technologies and products and services that we perceive as breakthrough creations look exciting, but the meaningful innovation is in the larger, more complicated processes that make those things possible.

Michigan has a great history of facilitating these under-appreciated advancements. Tons of new materials and methods of manufacturing and marketing were first developed here. For example, Amway pioneered multi-level marketing and played a significant role in the re-emergence of the American entrepreneur.

There's no new miracle drug without discoveries in chemistry, manufacturing, and control processes. There's no new animated feature film without a revolution in software-coding practices. There's no new electric car without developments in material sciences.

Many Michigan manufacturers have been industry leaders in designing carbon alloys that increase the strength of cars, jets, and military vehicles at a fraction of the weight. We don’t hear about these silent innovators because they are mostly suppliers, relegated to the background.

The most valuable innovations solve real problems and respond to pressing issues.

Consider all the game-changing actions that have enabled life-saving improvements to everyday existence: de-salianating water to quench drought-stricken regions; de-bottlenecking highways and airport traffic to improve flow and to reduce accidents; re-developing the electrical bridge to radically improve energy efficiency.

It’s easy to forget that the Internet and human genomics — both revolutionary platforms — are, in reality, loose federations of technology, software, and stitches.

So the smartest innovators are the ones who look not at lists in magazines but who look at the processes and products that everyone else overlooks.

Here are three ways to find and make use of these hidden gems:

Follow the river upstream. Innovators can learn a lot from wilderness guides. Adventurers know to follow the river upstream to the headwaters whenever they’ve lost their way. This is a wonderful analogy for growth and change: Take an innovative device, service, or solution, and trace it all the way to its roots — to the basic, foundational parts that make up its whole. Determine which elements make the product innovative, that make this object stand out. Is it lighter? Smaller? Easier to use? By identifying the start of a previous innovation, you just might find the start of your own, newer and better innovation.

Talk to the locals. In the world of innovation, suppliers, distributors, and service providers are the locals who can give you insider expertise that you won’t get anywhere else. Bring these locals into your project as early as possible, preferably before the design and development stages. Ask them how they’d improve your product or service. Encourage them to integrate their capabilities into your innovation goals. Be kind and generous to these suppliers, distributors, and service providers. If they have reason to believe that you’ll take advantage of them, they’ll inevitably be reluctant to share their local knowledge. Give them the freedom to work their magic.

Forage and fish. Once you find these hidden innovators, go on an expedition together to co-create your future project. Search for the low-hanging fruit that others before you missed because they didn’t have the help of locals. Gather the nuts near your camp, the berries that turn out to be not only edible but also full of nutrients. Without the knowledge and experience of locals, you won’t know what you can actually use and how to use it. Go fishing and put out your lines in new markets. Make it worthwhile for the suppliers, distributors, and service providers helping you by bringing additional value to their innovation. The more lines you put out, the more likely you’ll pull in a big catch.

Curiously, the only time we see these invisible innovations and innovators is when they fail. Think about blackouts and food recalls and natural disasters. It is at these moments of crisis when we realize how valuable these technologies are.

So instead of waiting for them to fail, embrace the gifts of these hidden wonders by discovering them now.

Where will you look for the ghosts of innovation’s future?

Jeff DeGraff is a clinical professor of management and organizations at the Ross School of Business at the University of Michigan. 

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