Product innovation is not enough

Some time ago on the article “7 Ways to Unlock Innovation” I had already defended the idea that companies must go beyond simple product innovations: “over the last decade companies and managers have paid too much attention to product innovation. No wonder most people associate the word innovation with the introduction of a new, revolutionary, uber-technological device. Instead of focusing exclusively on product innovation companies should think how they can innovate their processes, their structure, their business model and even their market.”

BusinessWeek recently published an extensive article describing this very same idea. Throughout the article there are examples of many companies that were successful because they went beyond product innovation into the realms of business model innovation. Apple’s entrance into the online music industry and Dell’s innovative distribution system are two examples of business model innovation.

Quoting the article: “In an era when innovation is all the rage, many CEOs are discovering that product innovation alone isn’t enough to save sick companies or turbocharge healthy ones. For many, their core businesses are being disrupted by globalization, technology shifts, and new competitors. They must reinvent the company. Even at healthy companies, business model innovations are essential to retaining their competitive positions.”

The article also describes Kodak’s entrance into the digital era and what role its CEO Antonio Perez played on the whole transition. Make sure you check it out here.

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