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The Truth About Innovation

By: Darrin C. Duber-Smith, MS, MBA
Posted: May 31, 2013, from the June 2013 issue of GCI Magazine.

Natural ingredients come from everywhere, and many of them have multiple applications that meet a broad assortment of consumer needs. Every year there are a handful of popular ingredients that dominate new product development, and each year the list changes slightly. Natural ingredients are rather like fashion, and paraphrasing from TV’s Project Runway, “One day you are in, and the next you are out.”

A Google search of the term “new natural personal care ingredients” reveals a range of patented and branded ingredient combinations addressing existing needs, as well as lists of ingredients to avoid and the most popular ingredients. And when the word “new” was replaced by “innovative,” the list was largely the same.

Innovation Unveiled

But just because some of these ingredients are relatively new, does that make them “innovative”? It seems this word has been thrown around quite a bit and has lost much of its meaning, similar to the way that social media—and Facebook in particular—has somewhat diluted the word “friend.”

This begs the question, are these ingredients truly innovative, or is this just a story that product developers tell? Just because a botanical or ingredient blend is new or popular doesn’t necessarily mean that it is innovative in any real sense.

The term “innovation” has been used to describe all kinds of product developments, including underwhelming ones, and the colloquial understanding of the term “innovation” is that it means “new.” We can all likely agree that the telegraph, automobile, lightbulb, radio, television, computer and smartphone were all ground-breaking innovations, but what about each iteration of the iPhone? Is a new emollient truly innovative? A new natural preservative? A new, naturally derived active ingredient?

Innovation and Product Development

Product development is one of my favorite university courses to teach, and in this class we learn there are three forms of innovation.

  1. A continuous innovation describes a new product that requires almost no change in consumer behavior, so it represents very minor changes in an existing product type. An example of this would be an existing hand lotion product that features a new non-active ingredient. Or, if you prefer a technological example, each iteration of the iPhone would be continuous. Many experts do not consider a continuous innovation to be very innovative at all.
  2. A dynamically continuous innovation involves a major change in a minor behavior or a minor change in a major behavior. An example would be a hand lotion (either an existing product or a new one) that features an entirely new way of dispensing the liquid, such as moving from a jar to a pump. Or technologically speaking, it’s the difference between a tablet and a laptop.
  3. A discontinuous innovation can be very disruptive to the industry. An example in the beauty realm would be a product or a newly discovered ingredient that has an entirely new market application, such as hair regrowth. And in fact, the decade-old advent of skin and hair care products in the form of ingestible nutritional supplements may have been the last true discontinuous innovation in the beauty sector.

In most cases, it’s not really the ingredients that are innovative, but the finished product. And in every case, it is always the degree of consumer behavioral change required, and not the ingredient/product itself, that determines the type of innovation. It may sound academic, but what happens is that people in general become desensitized to words that they hear all the time such as “innovative,” and when they are underwhelmed by what they see, it serves to further numb the target market to the marketing message.

I think we can all agree now that the vast majority of new products are continuous innovations. A real ground-breaking product, featuring an entirely new ingredient with an entirely new application, can only be introduced once. After that, successive products will be dynamically continuous or continuous innovations. As such, in almost all cases, “hot” ingredients are merely popular ingredients.

Now let’s look at the patent process. In order to qualify for a patent in the U.S., an invention must be novel, involve an inventive step not obvious to a skilled person, and have an industrial application. If approved, the patent is exclusive for 20 years. Patents are awarded in beauty and personal care all the time, mostly in the form of process and composition of matter inventions. But the vast majority of these do not require changes in consumer behavior, and so they cannot be considered innovations. In fact, in too many cases, the changes are often things the consumer doesn’t even notice.

True Innovation

By now, the point of this article should be abundantly clear. We in the industry have overused the term “innovation” and are therefore somewhat desensitized to technological and product developments. Consumers barely even notice most of what we accomplish due to the continuous nature of our “innovations.”

Here is the rub. New product development in the beauty and personal care industry is really driven by needs and wants in the marketplace, not technology. This is known as a marketing concept—the dominant strategic approach in contemporary marketing, wherein marketers identify a need in the marketplace and deliver a bundle of features and benefits (a product) that addresses that need. Technological advancements are fine, but generally result in barely noticeable, incremental innovation. This means that product development is primarily under the purview of marketers because these professionals are responsible for assessing consumer needs. Research and development then follows the lead of marketing to ensure that what those folks are developing has a relevant market application and is something consumers actually want. Many firms learn this simple lesson too late and expend massive resources pushing something that doesn’t resonate in the marketplace.