Success evaluation for radical innovation
Gathering some notes about "successes" and "failures" of innovations to improve my talk about foresight failures, I ran across interesting material in Communicating Technology Visions by Tamara Carleton (Funktioneering Magazine. Vol 1, pp. 13). The paper actually shows how measuring only financial and commercial results for a radical innovation is inadequate and that other aspects should be taken into account. She basically shows how "meeting management’s expected sales, profits, market share, andreturn on investment" only offer a partial view. Some excerpts I found relevant to my research:
"For radical innovations, this default definition presents a thorny issue. There is an assumption that all innovations are predicated on financial results. Many experts today consider the Apple iPod to be a successful example of a highly radical technological innovation, and most would argue that the product was radically innovative from the start. However, if the iPod was measured solely in terms of financial profit based on its first few years on the market, then its proof as a successful innovation is not as strong or convincing. (...) Radical innovations may be truly radical and innovative without necessarily producing monetary gains. There are at least three ways to be considered radically innovative. An innovation could create an entirely new market or product catego- ry, such as the Honda Insight, the first American hybrid vehicle that laid the foundation for other cars like the Toyota Prius to follow. Or an innovation might generate a significantly new customer base but still not produce revenue, such as Napster, the original file-sharing service for music. Or an innovation may introduce a new technological application that is recast as novel or revolutionary in a different market without generating lasting financial returns. This would be the adoption of text messaging in the U.S., years aftewidespread phenomenon in Europe. (...) There is another problem in using the common test of success. Financial information about a radical innovation must be available and unambiguous. (...) Historical analysis will identify radical innovations clearly in terms of success and failure, but investigation of contemporary or budding innovations for the future require different metrics."
Why do I blog this? some good elements here about the definition of "success". Given my interest in "failures", it's important as it helps to symmetrically rethink what is a failure: a commercial failure is not necessarily an innovation failure as described in the example above.