<a href="www.swatch.com"><img class="alignnone size-full wp-image-987" title="swatch" src="/pullinc/wp-content/uploads/2010/02/swatch.gif" alt="" width="515" height="251" /></a>
<h1><span style="color: #808080;">When thinking about product and brand innovation– what seems to elude many executive leaders is a lack of understanding that people do not buy products, they buy into meanings.</span></h1>
Maybe the reason for this is simply the physics of most organizations inhibits radical innovation and the competitive advantage that results. What matters the most to people is not the function of a product, but their emotional, psychological and cultural connection to what a product means to them. The key to sustained competitive advantage for companies is to innovate around meanings rather than function and performance.

Radical Innovation does not happen when you bring people an incremental improvement of what they already know. Rather, radical innovation (and market leadership for that matter) is the result of  “proposing” an unexpected meaning. This meaning, unsolicited by user needs, once discovered, turns out to be the very thing people where waiting for!

There are countless examples of companies who have mastered this. Of course, Apple is an easy one. And there are other compelling examples. Back in the early 80’s, Seiko and Casio were driving technological innovation in quartz watches, believing people wanted technical precision. However, a Swiss watchmaker realized people cared more about self-expression than technical precision. Swatch was born and proved to be a radical innovation of meaning that created radical market success. While Seiko and Casio were closely observing user needs and existing meanings, Swatch created new ones.
<h3>Forget user-centered innovation.</h3>
With so many such examples in every industry to benchmark from, I am surprised most companies don’t seem to “get it”. Most are heavily invested in traditional market innovation – finding a consumer need and filling it. From our own experience working in early stage product and brand innovation, seemingly the conversation starts by the client explaining how their new product innovation has more buttons and is easier to use than the leading brand. A radical innovation of meaning rarely, if ever, comes from user-centered approaches.

In my view, this explains why so many high user involvement product categories are being commoditized. Most companies continue to improve incremental performance within existing market concepts leaving only a few visionary companies to gain competitive advantage (market leadership) by proposing new and different meanings. Did I mention Apple yet?
<h3>Good and Different.</h3>
In his whiteboard book <a href="http://www.amazon.com/Zag-Number-Strategy-High-Performance-Brands/dp/0321426770" target="_blank"><em>Zag</em></a>, noted consultant and author <a href="http://www.neutronllc.com/neutron/who" target="_blank">Marty Neumeier</a> outlines the fundamentals of good and different. The premise is simple–you can’t lead by following the leader. To remove uncertainty and hedge risk in innovation, many companies rely on focus group testing. While useful for certain kinds of learning, people in focus groups have a frame of reference that is based on what is currently known to them. Most people usually want more of what they currently know– only with more features and cheaper. This is not an effective venue for discovering new meanings or competitive advantage.

Today the marketplace is over-crowded with good. Good is expected. Good = the same! Different on the other hand, is more elusive. When a company proposes a radical innovation of meaning, it’s no surprise it will be first judged as crazy or impractical idea. Radical innovations of meaning don’t test well. A product that is radically different is always radically different than the current dominant meaning in the category. Think back to the Swatch example; personal expression trumps precision instrument. Indeed Swatch is still good and different.
<h3>What is your innovation strategy?</h3>
In his book, <a href="http://www.designdriveninnovation.com/index.html" target="_blank"><em>Design-Driven Innovation</em></a>, author Roberto Verganti outlines a framework for mapping strategy for innovation as a radical change in meanings. Check out his thinking in the diagram below:
<a href="/2010/02/innovation1.jpg"><img class="alignnone size-full wp-image-1010" title="innovation" src="/pullinc/wp-content/uploads/2010/02/innovation1.jpg" alt="" width="463" height="435" /></a>

Verganti describes the process of product innovation and competitive advantage as historically being the result of product performance enhanced by disruptive technology advances and intense analysis of users’ needs. Radical innovation, on the other hand, is more about baking the more elusive unexpected meaning into the product. People discover something unexpected that, when delivered, is somehow what people have been waiting for, just not asking for. Radical innovation is a proposal to people. Radical innovation is not about function and form, but about function and meaning– never driven by users.

<strong>As your company maps its innovation strategy, this distinction of radical innovation of meanings rather than features may be noteworthy in your product development.  If you‘re not thinking about radical innovation right now, you can be sure your competitor is. Lead, follow, or get out of the way has never rang so true.</strong>

Please share your thoughts with us.