"Ideas won't keep. Something must be done about them" - Alfred North Whitehead (English mathematician)
Innovation is great. It's the life blood of long term value creation in many industries. And, quite rightly, it gets a lot of attention in the press, your digital feeds, and in strategy/financial analysis work. But we need to be clear, on it's own it's not enough. It needs all sorts of detailed and complex follow up to turn something from a good idea to a great business opportunity. And without this work innovation is just another good idea.
Why is this ? Because as Gina Domanig says in her recent TED talk "innovation is just the seed". And to take the analogy a bit further, if we don't water and nurture the seed, it dies.
In the case of innovation, this nurturing is about validating the value proposition, working out how to industrialise the technology, raising the required capital, and building market demand. Skills and expertise that sometimes innovators do not have. If we don't give these aspects of innovation development the attention they deserve, a decade from now we will still be talking about what needs to be done, and how we need more innovation.
And remember, we already have most of the technologies we need to make the sustainability transitions happen - its now about application and improvement. So while we should keep on celebrating the inventors and the innovators, when it comes to putting your money to work, look beyond this to those companies that are good at taking good ideas, and turning them into profitable businesses.
To misquote the Bible, and the Field of Dreams movie "you need to do more than build it, if you want them to come".
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Innovation alone will NOT save the world
Innovation is just the beginning of the process, not an end in itself. As investors and Sustainability Professionals it is important that we look beyond the 'good idea', spending time examining the building blocks of what will turn an innovation into a successful business - from both a sustainability and profitability perspective.
This is something that some finance people understand. But it can be seen as less important by Sustainability Professionals. Why ? Sometimes it's our bias. We want to believe that innovation can fix the problem, so we suspend our critical facilities - just a bit.
Behavioral people call this confirmation bias. And it's something that Alex Edmans, which many of you may know through his influential book Grow the Pie, talks about on his website "May Contain Lies.
But, my experience has been that a lot of the time it's a lack of knowledge about the nitty gritty of business. The contribution to a successful business that comes from process & operations, supply chains, marketing, and finance. The good news is that it's possible to learn about these things. And you don't need to become a subject expert.
CT & MRI scanners - the innovators and the commercial winners
Innovation often doesn't work out the way you expect. Computed Tomography (CT) and Magnetic Image Resonating (MRI) scanners are now widely used in hospitals across the world for medical diagnosis. It's not an exaggeration to say that they have been influential in massively advancing medical science, and in saving countless lives.