The Nine Domains of Innovation -- Beating Your Competition with Planned Strategic Disruption

For most businesses, innovation is something that is left to random chance. Random people meet, random people encounter a random problem or opportunity, and the innovation light bulb simply goes off at times. It isn’t common for a business to force innovation to happen in a specific area of interest, yet this can be done by proactively and consciously focusing creative energy in a structured manner onto that area of interest.

In my career, I have seen innovation from many diverse angles. As an inventor, as a patent attorney, as a strategy executive, in M&A, in business development roles, operations, and more. Through that experience, I have learned that innovation can be substantially accelerated and/or can be willed into happening, and this often can provide exceptional business value.

For innovation to happen, you need to bring together three fundamental things: 

(1) People. First, you need to assemble the right kind of professionals for the innovation you want to enable. They should be experts in their fields, creative thinkers, not afraid to speak out, yet thoughtful listeners, with low ego, and they should be people that are energized by teaming with others. Further, you need diversity of both thought and past experiences on the team. Innovation does not optimally happen when all the people in the room are myopically saying the same thing, from the same vantage point, for the same reasons, based on the same experiences.  You should assemble the team to include many skills that surround all facets of the subject matter of interest, and you might even consider including some experts that are totally off track from the topic at hand to serve as intelligence, common sense, interjectors. Interjectors are people that are not “brain-washed” by being surrounded and pummeled by years/decades of conventional thinking in an area. Interjectors are apt to consider approaches and ideas that true experts in a field may immediately dismiss as impossible or impractical, and that blissful unfamiliarity with an area can sometimes create interesting pathways when a thoughtful team is engaged in an innovation exercise. As an example of a well-assembled team, for innovation in the area of semiconductor manufacturing, you might want to assemble chemists, electrical engineers, industrial engineers, engineering mechanics, physicists, material scientists, biologists, operations people, and more, and perhaps throw in an interjector or two like a computer scientist, marketing exec, finance expert, or manufacturing expert from another industry.

(2) Knowledge. Innovation rarely happens in a vacuum. Innovation happens on top of existing information. Therefore, the team needs to be knowledgeable (or get knowledgeable) about foundational information related to and encompassing the area of innovative focus. Get the team to formulate a very solid understanding of the status quo and competitive dynamic in the area of interest and assimilate information in adjacent market areas that could impact the area of interest. Continuing the example from above, for semiconductor manufacturing, have the team refresh their knowledge in areas of etching, lithography, deposition, implantation, device physics, reliability, fab operations, etc. In addition, consider extending outward to get an understanding in surrounding ecosystems that orbit around semiconductor manufacturing, like what printed circuit board (PCB) guys are doing, what the chemical industry is investing in, what optics publications are saying, where outsourced assembly and test (OSAT) houses are focusing their efforts, and the like. It may be valuable focus some effort on other areas of manufacturing, like the manufacturing that occurs in industries like consumer electronics, automobiles, biomedical devices, etc.

(3) Process. Lastly, the best innovation doesn’t usually happen via meandering thought, although that is oftentimes the way most people experience innovation. Innovative results can usually be optimized by progressing the thought process systematically through what I refer to as the nine domains of innovation. When you look at all (or most) of the inventions ever created throughout recent history, there often is a common root, foundation, or fundamental characteristic of that innovation that anchors it into a neat and manageable taxonomy. The nodes in this taxonomy are domains. A well-informed team can systematically focus their energy and thinking on one domain or a couple of interconnected domains, and by doing so, innovation can be driven and accelerated for nearly any targeted area of strategic subject matter.

The Nine Domains of Innovation:

1.    Integration

Many innovative solutions result from taking many different pieces of existing status quo technology or features and combining them or integrating them in ways that create something highly disruptive. The combination can often exponentially increase the value add and/or stickiness of the solution to a user. To explore this domain of innovation, it is often best to have the team think about the functions and features of objects surrounding the main object of interest. Think in terms of surrounding components and devices, and reflect on the surrounding features and functions abstracted from physical componentry and see how things can be better integrated or combined. When thinking in terms of surrounding components and functions, do not forget to include adjacent solutions that at first glance seem unrelated or unhelpful. Explore how adjacent solutions/components/features can be combined in manners where synergies create new use cases or nonlinear value enhancement when in combination. 

Example:  Most believe the smartphone market began with the first iPhone. The iPhone created (intentionally or unintentionally) an innovation platform that enabled convergence and integration. Phones grew nonlinearly in value as the phone enhanced its operation and features far beyond simple text communication and voice calls. The iPhone was an extensible platform, and innovation was piled on to the smartphone platform by thinking along the lines of feature/function integration and integration of multiple functional objects onto one physical platform. The phone replaced or became your digital camera, video recorder, music device, eBook reader, calculator, GPS system, dictation machine, flashlight, document scanner, payment system or credit card, storage device, alarm clock, wrist watch, calendar, photo album, car keys, remote control, personal trainer, and more… or the phone mimicked these functions. Today, most people cannot live a single day without the utility of their smartphone, largely due to years of stacked innovation on the phone driven by creative combinatorial thinking and integration.

The integration or combination of previously uncombined items can create new solutions and address use cases that give a company or product line a differentiated edge over their competition.

2.    Improved Performance

Sometimes innovation does not come from integration, the art of merging two or more objects, features, or functions onto one component or platform. Rather, innovation comes from improving a performance characteristic of one or more features or functions that are already present on or in the solution. It is important to note that the term “performance” can come in many different forms for different systems, and you need to ensure the you identify and focus on performance dimensions that most interest you. These dimensions include: power, longevity, bandwidth, throughput, area, speed, efficiency, thermal resilience, quality of service, resolution, and much more.  Video information may be defined in terms of resolution, e.g., high definition or low definition. If the content is high definition, there are sub-categorizations of high-end definition, as it could be 4k or 8k in terms of its resolution. The content could further be characterized in terms of high or low frame rates, etc. As another example, some central processing units (CPUs) used as the “brains” in computers are higher frequency than others (say 4.2GHz versus 1.8GHz), some CPUs are 32-bit processors while others are 64-bit, some CPUs burn 120 Watts while others are designed for more power efficiency at 25 Watts, 1 Watt, or even 1mW. In many cases, powerful innovation results when improving the performance of an existing function or feature, and doing so continually until the user no longer experiences added value from that incremental performance improvement.

Example:  When digital audio first came to consumer electronics, the resolution of digital audio (the number of bits representing the audio signal) was low and the sample rate (the number of times a second the music was sampled to render it into a digital format) was low. Eight-bit music that was sampled at low rates such as 5.5kHz or 11KHz was common early on, and often sounded noisy or flawed to the human ear. Therefore, early digital music was often viewed as low quality or low performance. Low performance products often fail to attract a large crowd of satisfied users.  Over time, digital audio performance progressed, through innovation, to 16-bits for compact disks sampled at 44KHz, and to 24-bits for DVD-audio and Blu-ray sampled at higher rates like 96KHz or 192KHz. As the bit resolution and sample rate improved, the audio was perceived as higher performance and more consumers were attracted to digital audio hardware and content. Today, a large majority of people believe digital music has progressed to a point where greater resolution and higher sample rates do not materially improve the audio experience for the human ear. Said another way, with the exception of a few audiophiles, innovation on certain characteristics of digital audio may no longer be adding mainstream value, but it has taken decades of incremental “performance” innovation to get there.

Innovation can be highly valued when improving or enhancing features and functions that already exist in the current solution and greatly improve the user experience.

3.    Lower Entropy

The prior two domains of innovation involve taking a simpler solution and, in most cases, rendering that solution more complex. You either integrate features together where the combination is more complex than the isolation of the two features, or you take features that are resident in the solution and render them more complex and capable. Sometimes, swinging the pendulum in the other direction and actually simplifying the solution adds more value than continuing a competitive trend of increasing complexity (i.e., greater entropy). So, to drive innovation in this domain, it is good to think about the features/functions of the solution or the physical make-up of the solution with the goal of making the function or device simpler, de-featured, easier to use, and/or more targeted to a specific use case.

Example: The first TV remove for television was launched by Zenith in 1950. It was wireline-connected to the TV, with fixed functions (not programmable), and had very few buttons to achieve very low complexity and reasonable ease of use. Over time, innovation on the remote began adding features, added physical components, and integrating functions on the remote. Eventually, the complexity of the remote control progressed to today where we have a remote for each of the TV, DVD, set top box, game console, and more devices, with the total number of remote control buttons per remote easily reaching into the dozens or even hundreds. Companies like Apple and Amazon decided to innovate by going in the other direction and reducing complexity, and therefore entropy. The Apple TV remote contains 7 buttons and Amazon has launched a new product called Echo that allows users to control devices using voice commands that may obsolete the remote control entirely (basically, simplifying the remote control user interface (UI) down to zero buttons). These simplified devices have generally been valued by users who grow incrementally tired of feature creep (often features they never use) and complex UIs that have now started to accumulate negative value for most users.

Sometimes valued innovation lies in reversing a trend, going against the crowd, and favoring simplicity over added complexity, integration, and enhanced features.

4.    Enhanced Form Factor

Sometimes, innovative energy isn’t best applied to what an object can do, rather, inventive energy is better applied to what an object is. If a device can be made with the same features and functions, and the same performance, power, throughput, etc., but be smaller, thinner, more durable, more flexible, or lighter, then the value of the platform skyrockets. In many cases, improvements in form factor are the best way to address highly valued or new use cases and even drive technology into new or adjacent markets. 

Example: Here is a story I heard from a good friend years ago. My friend had a PhD in Electrical Engineering was injured from an illegal blow he experienced while sparring in a martial arts event. In the hospital, under some sedation, cameras were being inserted into his body to check on the severity of his injury and to determine if surgery was needed. My friend, in significant pain from the cameras being inserted and moved around, turned to the nurse and said, “I promise you, I am going to quit my job today and spend the rest of my days inventing smaller cameras.”  Cameras (and the cabling for such cameras) that are used for invasive and surgical applications are now approaching the diameter of a hypodermic needle. Innovation isn’t always about enhancing or adding functions, features, etc. or even reducing complexity, it is about creating a form factor that adds tremendous human value and enables new use cases for that solution. Very small cameras add tremendous value in medical applications and open new use cases in areas of security and surveillance, among other things.

In many instances, it is valuable to take a step back from what technology can do and ask how it be manifest in different physical configurations with different physical characteristics to better solve common problems or address completely new opportunities.

5.    Improving the Process/Interface/Content

What an object does is often inextricably linked to what the object is. I have often found many inventive people spent time brain-storming about the object (noun) and not the process (verb) when trying to solve problems or drive new ideas. Thinking within the confines of the object immediately constrains you in an artificial way. The space open for you to innovate is limited due to the objects limitations. Disruptive and unique ideas can often come from abstracting the innovation discussion off of the object and focusing more attention on what the object does, even if such thinking is done in the abstract. Ask yourself, what are the connections and interfaces we are dealing with, the media being processed, the algorithms being performed, the format and flow of the processing, data structures and data formats, and so forth. In essence, new and unconstrained innovation can result from focusing on the abstract rather than the tangible.

Example: The cell/smart phone business and wireless communications in general has made fantastic technological progress by focusing abstractly on the data, interconnects, and algorithms that are employed by phones, independent of the hardware doing that work. The industry has developed many algorithms and protocols, such as TDMA, UMTS, CDMA, WiMax, OFDM, LTE, AM/FM/PM/TM, QAM, ASK, FSK, PSK, VSB, SSB, DSB, TCM, CPM, and the list could go on for pages. Many of these solutions were focused on doing something better, different, or addressing specific use cases with enhanced user value added. But the thinking here was often on the process, not on the object performing the process, and some of the thinking had its roots in abstract mathematical exploration. Eventually, focus on the process/interface/content led to advances in compression, error correction, encryption, decryption, error correction and recovery, and more. Another example of focusing on the process over the object is how machine learning is currently impacting many areas of technology and many vertical industry segments. Thinking of how things can be done through new machine learning algorithms, enhanced by big data, powered by data collected from the Internet of things (IOT), and more, changes the innovation exercise, because making a better pharmaceutical product or a better oil exploration organization may be more about the algorithms/process than the product itself.

Sometimes new and useful ideas can come from looking at a market, problem, technology, or system not as an object but through the lens of what needs to be actively done, with an eye toward the data/content, interfaces, algorithms, and the like.

6.    Innovate at the Higher System Level

Sometimes, the best avenue for innovation lies not in focusing on a component or how that one component interfaces or functions, but rather by focusing on the combination of many components that form a larger system. If innovative energy is just focused on one component, the innovation that lies at the sum of parts is often lost. Ironically, some of the added elements in the system offer no fertile ground for innovation when considered alone, but once combined with adjacent or related items so that a larger system is evaluated, orders of magnitude more possibilities for innovation often unfold. Further, there are different trade-offs that can be made at the system level to improve some inventive thinking. For example, new ideas that can be manifest in software can also be done in hardware or some combination of the two, with different advantages and disadvantages, and great ideas at the component level amplify in user value when tied holistically into a broader system. 

Example: In the integrated circuit (IC) industry, an IC chip often cingulated into a stand-alone piece of silicon/semiconductor material and them packaged into its own separate package. These cingulated and packaged components are then assembled across a two-dimensional printed circuit board (PCB) with hundreds of these segmented ICs located in different spaces on the PCB. Complex multi-layer connections run through the PCB to connect the various separated IC chips (think of how the Big Dig in Boston connects various neighborhoods together).  Innovation is happening now, called 2.5D or 3D integration where various pieces of cingulated silicon are note packaged separately, but assembled in unpackaged silicon-form like Legos into one aggregated construct of amalgamated circuitry, which is then packaged in a single package. This type of “Lego” approach to IC systems in electronics enables several advantages that are difficult to achieve or entirely lost when trying to improve the old system of placing cingulated components on a PCB: (1) the closer proximity of ”Lego” components radically lowers power consumption, as the signals in the Lego assembly travel over distances that are often orders of magnitude shorter; (2) the separate packaged devices on a PCB are often input/output limited to hundreds of signals, causing severe communication and data transfer bottlenecks in the design, where these bottlenecks vanish when using the thousands of interconnections between closely packed “Legos” in the same unitary package; (3) parts of the “Lego” circuitry can be made in high performance expensive technology while other parts of the “Lego” circuitry are made in lower-cost higher-yielding technology optimizing cost in some cases; (4) size is significantly reduced, as an entire PCB can be compressed down to a much-smaller “Lego” component; (5) performance (bandwidth, throughput, etc.) is radically enhanced as components are placed in closer proximity; and more.

It some cases, it is advantageous to take a step back from the component or object that you want to improve and take a broader look at the entire environment and ecosystem that surrounds it.

7.    The Art of Creation

We explored above that innovation can be driven by focusing on the object or the processes performed by the object.  However, valuable innovation can come from exploring how an object is created, which means focusing on how an object is manufactured, tested, certified, or processed into creation. In some cases, the best enhancement of user/customer value isn’t found by exploring more features, more performance, more integration, etc., it is found by improving how the device is created. Said another way, some people don’t want a better house, they want to build the same house faster, cheaper and/or better without there being any negative consequences like increased cost, loss of features, etc.

Example: The Ford assembly line. Before coming up with the concept of an assembly line, articles of manufacture were often made by hand, one at time, by one person or a small team of skilled laborers acting in unison from start to finish on the same article. The articles made in this manner often lacked consistency and reliability, as many of the same objects were made from different teams, with differing skills, using different tools, with different “best” practices. When Ford moved Model T production to an assembly line, time-to-manufacture quickly dropped from 12.5 man hours to 1.5 hours and car output skyrocketed to one car output from the factory every three minutes.  Going beyond the conventional assembly line, some people envision a world where thousands, millions, or billions of products in the field may communicate problems they are experiencing back to a manufacturing line. That manufacturing line then automatically (under artificial intelligence analytics) makes adjustments or improvements to the manufacturing process for that product. This way, the products coming off the line are progressively improved and enhanced hour-by-hour without need for human intervention, thereby automating innovation in this domain of creation.

8.    Focusing on Tangential Common Problems

In the sections above, we have discussed that a lot of innovative ideas can come from thinking about the object that needs improvement, the process performed or certain characteristics of the object, etc. In many cases, innovation is needed to solve a critical problem that is preventing progress of some sort. In those cases, it is often valuable to exhaustively study (sometimes in abstract) the problem, and not the object, environment, features, processes, or physical characteristics that are part of the tangible object that needs to be improved. Often, if you check your ego and look at how similar problems were solved in the past in unrelated, adjacent, or other markets or industries, an innovative solution can become readily apparent in your technological space.

Example: In semiconductors, patterns are printed on semiconductor wafers by spinning photoresist on the wafer followed by selective lithographic exposure of the photoresist. As the minimum-sized geometries on semiconductor substrates continued to reduce year-on-year beyond sub-micron and into nanometer ranges, photoresist that contained large chunks of material rapidly became a yield and quality problem. A solution to this problem first showed up in a valuable Motorola patent, long-ago expired, that can be found online as US Patent 4,132,550, Bowman.  Most of the focus of the Bowman patent was on making an improved germanium semiconductor device. However, as a necessary step to making the small device, Bowman came up with a way to process and then use photoresist where the photoresist was filtered or “micro-centrifuged” to remove all large chunks from the photoresist. Upon filing or soon after filing, lawyers at Motorola began to realize this photoresist filtering was the real valuable novelty in the Bowman filing, they spoke to Bowman on how he came up with this apparently simple but super-advantageous filtering process. As the story goes, Bowman responded that he looked at adjacent industries that needed to solve a similar problem, pharmaceuticals, medical applications, basic photography, etc., and settled on the concept of filtering. He did some development and research in the semiconductor business domain, and it worked well and solved a vexing problem emerging in the industry. He didn’t think much of the small photoresist pre-processing step in his germanium device patent, as it seemed to simple of a solution… filter the photoresist. In the issued patent, the only allowed independent claim focuses on this filtering aspect of photoresist with no mention of the germanium device that was the primary focus of the patent when filed. 

Sometimes it pays off not to focus on the object(s) that requires invention, but rather to focus on the problem you are trying to solve and looking at other industries for clues and suggestions on how to develop a solution.

9.    Improved Financials/Operations

Too many people correlate the act of inventing only with technology. It is true, innovation most often happens by focusing on how to make technology better, but very profitable innovation can happen when trying to improve operations, organizational structure, decision making, time to market, business processes/practices, manufacturing logistics, and other aspects of a business that involve little or no technical content. Innovation along operational or business lines, while perhaps not even patentable these days, can reap massive benefits to the company or individual doing this type of thinking, as benefits can often include large reduction in costs, faster time to market, improve efficiency and quality, and more. 

Example: One very well-known case of non-technical innovation comes from Dell creativity that had its genesis in the 1980s. Dell and his team envisioned an operational system called just in time (JIT) operations, where the personal computers (PCs) Dell made were financially and operationally improved by JIT. Most companies bought the hundreds or thousands of components necessary to build their PCs in large volumes far in advance of the actual time when the PCs were built. By doing so, these companies locked up heavy amounts of working capital in components that sat on a shelf and returned no value to the PC company until months or quarters later when PCs were actually built and shipped. Also, because of this high-inventory process, the companies doing this often took on the risk of inventory loss, the cost and overhead of inventory logistic, and storage, and more. All this further increased the cost of doing business, and this was very bad in a business that often turned out operating margins in the low single digits. Dell did deals with suppliers where the hundreds or thousands of parts needed to make a Dell PC were provided to the manufacturing line “just in time”, often a day or even hours before the actual PC needing that part was built. This way, Dell didn’t tie up a lot of their capital in parts sitting on shelf, Dell didn’t have to build and manage huge warehouses of components, insure piles of inventory, suffer the yield loss from the parts sitting too long on the shelf, and more. Dells’ computers used the same technology all their competitors used, but Dell beat their competition for more than a decade simply by engaging in operational and financial innovative thinking that helped drive Dell to a company with $55B in revenue today.

By focusing on the operations and processes that surround a business or system, innovation can drive faster time to market, reduced cost, improved revenue and margin, enhanced efficiencies, and other material benefits for a corporation.

Summary:

Companies and individuals do not have to wait for strategic innovation to happen haphazardly. With an organized assembly of the right people, sufficiently educated and informed, innovation can be forced to happen or substantially accelerated in areas of strategic interest. Superior results do occur when that team’s creative energy is purposefully focused on one or a handful of specific innovative domains in a disciplined manner.