The importance of the "how" and "why" of innovation

Strategy & Innovation

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Not so long ago, Nokia had a huge market share in mobile telephony. Today the company focuses primarily on network infrastructure. The 'phone brand' was sold to Microsoft, who in their turn sold it to HMD Global who launched the new Nokia smartphones last year.

It's a classic example of how a lack of innovation can threaten the existence of a company. It’s not like they did not invest in innovation, but they did miss the entire hype of smartphones. Since roughly 80% of all innovations fail, it is important to make innovation comprehensible and keep it manageable. Innovation is too important to leave up to pure chance.


According to Mark Payne (Fahrenheit212, “How to Kill a Unicorn”), this has to do with the fact that companies often place the ‘wow’ ahead of the ‘how’. They go after the ‘wow’ effect, while the ‘how’ gets delayed, because it seems less important. Payne encourages companies to put an emphasis on the ‘how’ in the first phases of innovation, so they will sooner have an idea of the project’s potential success.


In addition, Simon Sinek (“Start With Why”) then introduced the ‘why’ question. Why is your innovation of importance to your customer? If you start from that question, you know that there is a reason for your customer to be interested in your innovation.

That is how we get to Peter Drucker (“Innovation and Entrepreneurship”, “Managing Oneself”) who said that innovation only exists to generate customers. Personally, I would add, ‘new customers’. If you look at it that way, innovation is a lot broader than just new products, it can also entail new services, new customer segments, or new business models.


From that perspective you can see that innovation can’t be the responsibility of just one person or a small group.  It is important that there is a clear vision and strategy coming from top management. The culture should be open to experimentation. The process has to be open to ideas and should be able to enrich them.

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