Peter Drucker’s Seven Sources of Innovation are listed in
order of importance with the first four sources being within in the
organization and the last three representing external changes outside the
organization. The Seven Sources are listed below.
1. The Unexpected:
The Unexpected describes unexpected
successes and failures or events that shift the business. Unexpected failures
can lead to other opportunities. My favorite example of the first source of
innovation is 3 M’s product Post-It-Notes. This product was created for
industrial application but failed.
Ironically, one of the 3 M scientists took some of the material home and
found that his daughter was cutting the sheets and using them as reminders on
the refrigerator to list items needed at the grocery store. The failure of the
product in the industrial market led to the opportunity of post-it-notes which
have been used globally for many years.
2. Incongruity:
Incongruity identifies areas of missing
information in how a customer should use a product. Druker defines the
incongruities as discrepancies, dissonance, between what is and what “ought” to
be. An example of incongruity within the
rhythm of a process is the Scott
Spreader. The Scotts Company realized its customers did not know how to evenly
apply their fertilizer product. As a result, Scotts began to manufacture
spreader system which mechanically released a specific amount of fertilizer in
the exact location the consumer requested.
3. Innovation Based on Process Needs:
This type of innovation is based on a
specific task, rather than the overall strategy. Innovation Based on Process
Need identifies the missing link in an existing process. A great example of
this type of innovation comes from Elijah McCoy. In 1870 McCoy earned his
degree in engineering, but as an African American, the only occupation he could
obtain was an oiler of the Michigan Central Railroad. The trains he worked on
stopped frequently and had to be oiled by hand. McCoy designed a lubricating
cup that automatically dripped oil onto the moving parts. His invention became
popular and heavy machinery was not considered “complete” unless it had a McCoy
lubricator. This is where the question “Is it the real McCoy?” comes from.
4. Changes in Industry and Market Structures:
Changes in industry and market structure
catch the market industry off-guard in order to inflict a large impact. This type of innovation describes a shift in marketing
toward a specific subgroup of the consumer base. Fuel-efficient cars are an
example of this type of innovation. With the cost of fuel rising, automobile
companies shift the design of cars to be more fuel efficient for customers concerned
about increasing gas prices. This was a smart move because I think I hear a
conversation at work at least every week about the prices of gas and how much
it cost that co-worker to commute that week.
5. Demographics:
Drucker felt that demographics including population
size, age, location, education, income, employment, and type of occupation are
one of the most reliable predictions of opportunities for innovation in the
future. Now the example I chose to talk
about is not exactly a specific company, but is a business and that is
education. Boarding schools (and no, not the ones for bad kids), are generally located
in New England, more specifically Connecticut and Massachusetts. Although this
is not one specific school or company, there is a reason a majority of prep
schools/boarding schools are located in New England and this is because of the
demographics in New England. Yes, these are boarding schools with students from
around the world, but many of the students come from the New England region
which consists of some of the highest incomes in the nation. Although these are
not companies, these schools are a business and feed off of the wealth in area.
6. Changes in Meaning and Perception:
This type of innovation is the example of a
changing culture. I think of the biggest perceptions that has changed in the
recent years are vacations. The idea of how to vacation has drastically changed
(for those who can afford it). Before vacations were about choosing a place to
go and arranging the transportation to get to that place, and choosing what to
do while you are on that vacation. Now with all-inclusive resorts and
timeshares the ideas of vacation have changed. These types of vacations do not
attract everyone, but they do attract many. The all-inclusive vacations have
created new definitions for relax and spoil. Timeshares typically provide
vacationers with a fully-equipped condo with a kitchen area, living space, and
laundry facilities within the unit. I think it’s ironic because I look at the
pictures of my parents “grand” vacations and now think that’s nothing compared
to what is offered now.
7. New Knowledge:
Technology and scientific findings are a
major source of innovation and ironically is listed as the last source of
importance to innovation. I find this interesting. There are so many examples
of this type of innovation: Google, iphone, app, social networks etc.; the list
goes on and on.
While researching the Drucker’s Seven
Sources of Innovation, I found some excellent quotes and two of my favorite,
happen to be from the company, the 3M Corporation. The quotes are incredible and
so applicable. Let me know what you think! Enjoy!
“Our company has, indeed, stumbled onto
some of its new products. But never forget that you can only stumble if you’re
moving.” – Richard P Carlton, CEO 3M, 1950
“You can learn from success but you have to
work at it; it’s a lot easier to learn from failure.”
