"Enterprises should know when the market is ready for a product"

It doesn't matter how different or creative your technology is, it has to be grounded in the real world - it should be what people want. Lars Erik Holmquist, the author of 'Grounded Innovation: Strategies for Creating Digital Products', who is also the Principal Research Scientist, Yahoo! Labs, reveals to Data Quest what enterprises should keep in mind while innovating for business.

What is the idea behind grounded innovation?

Any new idea takes a long time to get into the real world, no matter how good it is. The key to success lies in knowing when the market is ready for your product. Innovation is when your technology meets utility. The focus is not on an invention - i.e. creating a new technology- but on the whole eco-system. When the technology finds a new usability, or even if you make a 10-year-old product 10 times cheaper, that in itself is an innovation.

How would you differenciate an invention from an innovation?

People often get confused as they think inventing something new is an innovation - that's only one part of it. Inquiry and usability are the other parts of innovation - you cannot come up with a new product with disregard to what users like and what the technology can do for them. If you really want to innovate, you need to work on something new that will be relevant to the real world.

For instance, the tablet computer was originally developed ad a 'pad' 20 years ago at Xerox Parc, California. The product wasn't a success but inspired a number of devices like Apple's Newton Message Pad, which also was a commercial failure. Microsoft followed suit and created a tablet PC in 2001 - also a failure. In 2010, Apple launched the iPad, which was foreseen as a potential failure, but there were so many lessons learnt from different products, research, half-functioning prototypes. With the iPad, everything sort of came together. My theory is that a product will not go on sale immediately, but eventually, if there are many people working on the same problem, it will end up in a real world product.

Why does it take long a technology to be successful?

Many enterprises focus on invention of new products and technologies in research labs. However, they learn the hard way that it doesn't go far commercially. Any new idea or invention takes a long time to materialise into a successful product. Enterprises need to remember this while they work on new products.

There is also a lot of basic research that goes into studying the world, and do not include a new aspect in coming up with new ideas. If we combine this research with invention, there is a higher chance of making an innovation grounded in the real world.

How can enterprises reduce the time taken from research and invention to innovating?

Grounded innovation is one component of how we do that. Very often, an exciting innovation comes out too early to get it into the market. Moreover, they should know when your technology is ready as well as users. Understand the users and know when they're ready.

We can learn from the company 3M, that decided about 30% of their income has to come from products developed within the last five years. This forces them to be innovative and innovate with new products. One of the dangers that persists today, especially with Internet and technology-based enterprises, is that their already existing business is going well, but it is not enough for the ever-changing future.

Internally, there needs to be interaction and conversation between the researchers and product guys. When both of them are in sync, you're closer to an innovation. Researchers who have already known and foreseen these changes for a long time is a very important resource to proof yourself for the future.