 Hey everyone, in this video, I'm going to give you a definition of innovation, break it down into very non-fluffy language to show you exactly what innovation is and how you can apply it to your business or your clients in 2020. For many people and many companies, innovation means one thing, and that one thing is cool or new or interesting ideas. But that's actually a really dangerous and very simple and actually wrong way to think about innovation. Thinking about innovation as just pure ideas can lead companies down the wrong path to creating interesting and cool things that really have no market need and are often badly executed because they have so much weight on how important an idea is. What innovation actually is, is the combination of an idea, which could be maybe even a mediocre idea, with execution. So how is it executed? How does the promotion work? How is the marketing working? How much does it cost? How much does this new solution cost? How much better is it than the competitor's solution? How well is it integrated into the current systems that the company has? So it's really a combination of three things. It's the idea, which you could also say the solution mixed with the execution and then that meeting market needs. And the market needs are either known, basically something that people know exists on the market that people need, or they could be unknown. For example, there wasn't a clear market need for something like the iPhone, but it was still an innovative product that managed to change the entire market and move the entire market towards that product. So as you watch this video, what I want you to think about are which companies are actually secretly innovating in the background. So I'm going to show you a formula for innovation, but I want you to write into the comments which companies are not obviously innovating but are actually innovating. So I think right now when you think of innovation, you're thinking of all the big flashy ones. But in a few minutes, hopefully after watching my formula, you're going to have a different thought about what innovation is. And I want to know which companies you think are innovative by the end of this video. One of my favorite illustrations of innovation and how to visualize it comes from a book called Anything You Want by Derek Sivers. And right now I'm going to go to my whiteboard and show you how this works in real life. And I think this is going to be a great little way of you showing other companies. Are you showing your clients? Are you showing your colleagues? Hey, this is kind of a clear definition of what innovation is like physically. Okay, on this board, I hope you can see that it says idea and execution. Maybe I'm even going to finish off that circle here. And so on this side, we can see awful idea, weak idea, so-so idea, good idea, great idea, excellent idea. And then we can see numbers next to it. These numbers are the multipliers. So on the other side, we can see that we have execution, no execution, weak execution, so-so, et cetera, et cetera, down to excellent execution. So let's do some simple math and look at a product like the iPhone, okay? So the original iPhone, I've even got a print out of the Apple logo here, which is great for the video. The original iPhone is sort of an anomaly. It's one of the few products that has ever existed that's actually high on sort of the innovative scale. So I would say the original iPhone was actually a great idea. So we're going to give it 15 multiplier. And I think the execution was, compared to what was on the rest of the market, I think the execution was excellent. And this is a rare case where you have great ideas and a great kind of solution and something very unique and excellent execution. And the result of this is we have the $15 billion product. And that's kind of the idea is you can add up and see how much the innovation is worth, right? That's not true today, but that's kind of the idea. Let's look at something a little bit different. Let's look at something a bit more normal. What about the iPhone 11 Pro? Let's get a bit more boring. So here's the iPhone 11 Pro. And one of the biggest innovations in this product is it has more cameras. Now, would you say this is a good idea? Callum, where do you think that in terms of an idea, where do you think the iPhone 11 Pro sits here? For the cameras. Just in general, that product. I think so too, agree. Really? I don't know. I would say it's at max, at the max level, it's a weak idea. Because this product exists on the market already today from every other company. But I think the thing that Apple does well is that they still execute these things excellently. And so this equals, you know, one billion, right? It's not now this industry changing product anymore, but because they're still excellent at execution, it still works well for that company. Think about something different. I always love to give the... Do you have any things you want to? There's Netflix. Netflix? Netflix is... Well, that's actually another example of something that once they did the streaming product, I mean, there were not so many other streaming products out there. So that's almost an iPhone style anomaly, I would say. It's one of these great ideas with excellent execution. How about something like the Tesla Model 3 or even the Tesla Model S? I think there were... I mean, I don't think there were other electric cars on the market. People knew what electric cars were. Those things didn't need to be invented. But the idea of... So I would say it's a so-so idea. The original, like we're skipping the roadster and going to the mainstream Tesla car. But the execution once again was excellent. So when you had a company coming along like maybe the early versions of the electric cars coming from Nissan or other companies like that, the same idea but less good execution. And so they just didn't manage to take the market or win the kind of hearts of minds of investors the way Tesla did. Another nice example I like to show is the Wii U, so Nintendo's Wii U product. So let's actually... They have three products in the last few years. There was the Wii, maybe you can show it. The Wii, the Wii U and the Switch. And the Wii was unbelievably successful. It was an excellent idea. It was something completely unique and it had excellent execution. It completely took over the market. It was one of the fastest selling and biggest selling games consoles of all time. And it was genuinely unique. It was something very different. Now, the next product was called the Wii U. It was also a very interesting concept. It was less interesting, but you could say it was a great concept. But the execution was absolutely terrible. And so that product, even though it was very innovative and very interesting and very new, it had very weak execution. And so it just didn't do so well on the market. Now, what's really interesting is they took the Wii U concept, which was this portable concept and tried it again, which means for me the concept is actually, you know, weak or let's just say so-so because they were just repeating the same thing again. But this time they executed it excellently. So you can have the exact same idea executed crappily like the Wii U and it makes no dent in the market and Nintendo's shares drop. And then you can choose essentially the same idea again, but with a much better execution and that hits the market hard and Nintendo's shares start to skyrocket like crazy. And so that's like a good more kind of... I mean, of course, these numbers are not accurate, but it's a good way of looking at innovation rather than it just being ideas. And rather than thinking that ideas are super important, understanding that ideas are actually just the multiplier of how well executed something is. Right? When we look at the first foldable phones that are coming to the market, let's say foldable phones are very innovative. So maybe they're even like great ideas, but currently nobody is executing them well. So there's no market for foldable phones. Or the first smartwatches that nobody cared about great ideas, weak execution, nobody cared about them. So when a company like Apple comes along, that's one of the things that people don't realize about a company like Apple why they're always considered innovative, but people actually don't realize they're innovative, is that they come along, they wait generally, they watch what the market does, they let the market iterate on the products, and then they come to the market with the same idea as everyone else, so-so idea, but they execute it better than everybody else, which is a super interesting thing. And what I always find interesting about it is that the media doesn't understand this. The media only wants to talk about exciting products, and Apple doesn't really release exciting products. This is why the AirPods, for example, nobody really paid attention to the AirPods in the beginning, because like, oh yeah, great Bluetooth headset that looks crap, and it somehow looks like cigarettes coming out of the ears. So a Bluetooth headset has existed a million times, so it's a weak idea, but excellent execution. And I think one thing that a lot of companies could do with is stop, especially if you're not a company that's very excellent at making products, especially if you're a company that's new to sort of the digital space, it's to try to get better and better at execution and not necessarily focusing too much on having the crazy new idea. A lot of companies try to do things, they try too hard to be unique, and it's often like these large telcos or large companies that really don't have any right to try crazy things, because they just can't pull them off. Often if these companies just tried something a little bit safer, but with really interesting execution, they could have an innovative product. And I think that's one of the biggest, biggest warnings I would have for companies, especially larger businesses, when they want to make an innovative product, when they want to disrupt the market, do understand that there is this sort of equation happening in the background, that it doesn't matter if you have the coolest idea of all time, we're going to have a streaming service that's like 5K and it's VR and it's AR, if you're not able to do it well, if you're not able to market it, if your company's just unable to do these things, then the product is not going to succeed regardless. And that's why I really like this almost depressing way of looking at innovation. All right, I'm done standing at this whiteboard. I'm going back to my desk and, you know, Callum has to set up all the lights again. So, well, here's the transition. All right, so hopefully that little overview of what innovation is and what innovation maybe isn't, gives you a better idea that innovation isn't this kind of fancy idea generation. You have to be a genius to innovate thing. It's actually the kind of almost slow and boring culmination of being able to execute something well and being able to execute something better than your competitors. And often it's really not about, you know, having the greatest creative director in the world. It's not about having someone like Steve Jobs running the company. It's about being able to give your employees or being able to teach your employees or your colleagues how to actually build systems so that they can execute better. It's not necessarily about how to be more creative because actually everyone has enough ideas. It's about how do you capture these ideas and how do you execute on these ideas better than your competitors? And of course, many of the ways to do this are by learning systems and, you know, companies use things like agile, companies use things like design thinking, design sprints. These are all systems that can help your company execute better rather than focusing just on when's the next big idea. I mean, if you look at a company like Facebook and Apple, two companies like Facebook and Apple, both of these companies are right now working on completely changing the entire computing landscape with augmented reality. Everyone knows it. Facebook are being super open about it. And it's not about the idea. Everyone knows what the idea. The idea is out there now. Everyone has the chance to work on that idea, but whoever executes it the best will win. And that's the kind of thing I'm super interested in seeing playing out. I hope you liked this video on innovation. I know it was very simple, a very quick overview. But if you head over to our LinkedIn page, there'll be a description, a link in the description down below. You can get a much deeper, deep dive into the topic of innovation. We're posting every single day different tactics you can use at your company or if you're consulting different tactics you can use when you're consulting on the topic of innovation. So definitely check out our LinkedIn page. We make new videos every week. So if you want to see more videos on innovation, design thinking, design sprints or anything around the topic of innovation, make sure you subscribe. So you'll get a little notification or, you know, we'll pop up on your recommended feed whenever we have a new video. And we've got new videos out every Tuesday. All right. Have a good one. Bye-bye. One of my favorite illustrations of innovation comes from the book Anything You Want by David Sir. F*** Derek Sivers. Yeah. Okay. I'm done writing here. I'm going to go back to the desk and I'm going to round this off. Don't do that. No. All right. I'm done standing at this whiteboard. I'm going back to my desk and, you know, Callum has to set up all the lights again. So, well, here's the transition. So I hope you like this video. Sorry, my energy wasn't as high as it usually is. A little bit tired today. We had a heavy night last night at the office. No. Okay. Did I say weak enough? Yeah, no, I think. I'll see you next, all right. We'll see you in one more bit if you want to do more.