Immersive Technologies to Accelerate Innovation. Simon Richir

      1

      Innovation Management: Issues and Key Points for a Vital and Strategic Process

      Systematic innovation requires a willingness to see change as an opportunity. PETER DRUCKER

1.1. A question of survival

      Every year since 1955, Fortune magazine has published a ranking of the 500 highest-grossing U.S. companies. In 2014, the American Enterprise Institute revealed that 88% of the companies initially included in this ranking were no longer in existence. Some had gone bankrupt, others were bought out, even though most of them had been flagships of American industry. As Joseph Schumpeter said, most companies die “of old age” when they are no longer able to innovate. Lack of innovation naturally leads established companies to disappear. These disappearances are accelerated by the arrival of new companies which, on the contrary, are born and develop in their wake. Innovation is therefore a question of survival, or at least of maintaining a dominant position.

      1.1.1. The example of Blockbuster Video

      Blockbuster Video is a famous example of a company that died of old age due to lack of innovation. Founded in 1985 in Dallas, the company operated a chain of VHS movie rental stores. It adapted to the evolution of video media, moving from VHS to DVD and video games. In 2000, Blockbuster had an option to buy the young California company Netflix for $50 million. Blockbuster’s executive at the time refused the deal because Netflix was losing money. In 2014, Blockbuster Video went bankrupt while Netflix raked in more than $5 billion in annual revenue. Netflix made all video rental companies obsolete in a few years. Blockbuster Video, in a dominant position, failed to make the paradigm shift that was needed at the time. The story was not over, as in 2019 and 2020, no less than six competing platforms came to the market with a technological and economic model similar to that of Netflix: Disney, NBC, Apple, HBO and Amazon. There is also room for “followers”; it is never too late to innovate.

      1.1.2. A regime of intensive innovation

The challenge of innovation is to survive or to maintain one’s advantageous position. This is not new, of course, but innovation is even more crucial today than it was yesterday because we have entered a regime of intensive innovation (Hatchuel et al. 2000). On a global scale, the number of patents filed and scientific publications is constantly increasing. While it took more than 60 years to go from a 17 cm vinyl to a 12 cm CD, it took only 5 years to go from a digital music player to a subscription-based streaming service. This example illustrates the accelerating pace of innovation. MPO, the European leader in vinyl records, became the European leader in CDs and then DVDs after a successful technological transition. Moreover, the reduction in the number of vinyl records on the shelves has not disrupted the expertise of companies in this field, whereas the arrival of online listening platforms has made other media obsolete. This is the second characteristic of the era of intensive innovation: innovation is increasingly radical. Not only do disruptions happen more often, but they are also more brutal. Companies are therefore more and more subject to the risk of seeing their market disrupted and must adopt methods that allow them to transform this risk into an opportunity. Incremental innovation remains essential, but does not protect against the emergence of a disruptive competitor.

      It is possible to prepare oneself to face this obligation of innovation, either through methods or tools. Innovation is a way of transforming ourselves to absorb the revolutions underway; the digital revolution in the broadest sense (including artificial intelligence, immersive technologies, supercomputers, etc.) is the one we are currently dealing with. It is also a way to adapt to the new constraints linked to the consideration of ecological issues, with a set of opportunities to be seized.

      The impact of innovation as a process is considerable in the long run, but innovations as an outcome of the process are often small, incremental steps. We only hear the stories of very dramatic innovation, but most innovations are not. They are not original, nor technically complex, and often look like common sense in hindsight.

      1.1.3. From creativity to innovation

Creativity differs from innovation in that the former is about coming up with ideas and the latter is about implementing them. Creativity is therefore a psychological trait and process, whereas innovation is a management issue, a professional activity that is generally collective. Indeed, the implementation of ideas often requires the association of several forms of expertise in an innovation team. When the organization allows it, creativity will generate a flow of new ideas that will feed the innovation process. If innovation is a question of survival, it is also an exciting playground with flexible rules, allowing each step forward to transform ideas into successes. The challenge is to ensure that new ideas can survive in mature companies, that is, with an optimized organization for production and continuous improvement but whose rigidity sometimes blocks any possibility of radical innovation (Lecossier et al. 2018). As a result, mature companies need to redesign their innovation process to protect truly innovative ideas as they mature. A survey by the Product Development and Management Association reveals that 24% of companies with a true innovation methodology manage to bring one out of every four generated ideas to fruition, while 76% of companies with fewer tools bring only one out of every nine to fruition.