Rethinking Your Innovation System
OCTOBER 28, 2014by Andrew Taylor and Kim Wagner

https://www.bcgperspectives.com/content/articles/innovation_growth_rethinking_your_innovation_system/

This is a GREAT article that I strongly suggest you read

Companies know that innovation is one of the keys to growth. Seventy-five percent of the respondents in BCG’s report The Most Innovative Companies 2014: Breaking Through Is Hard to Do (October 2014) ranked innovation as a top-three priority for their company; 22 percent said it was their company’s top priority. More than 60 percent said their company planned to increase investment in innovation in the coming year.
So where are the results? 

Companies are the first to admit that there is room for improvement. CEOs question whether they are getting a return commensurate with their investments. Many innovation managers express frustration that their teams are not developing the successful new products and services—or the compelling product or service extensions—that they seek. 

Compounding those challenges, the bar is being raised. Customers, used to continuing progress and improvement, expect more. New technologies, especially digital advances, have conditioned customers to expect it more quickly. But long-used innovation models no longer keep up. Processes are too slow, dragged out by too many rigid stages and gates to clear. 

Decision making has become overly complicated and consensus based, resulting in compromised, incremental solutions with little chance for a big impact.
As customer expectations grow and markets evolve more quickly, companies can’t expect to innovate in the ways they used to. Innovation models themselves need to be systematically innovated, rethought, and updated…. 

…. innovation is a system: a mixture of insight and creativity, as well as a disciplined process that consistently promotes progress. This system has three major components: a strategy comprising choices on where and how to create growth and value through innovation; a supporting set of processes for research and product development; and an enabling set of systems, tools, and capabilities. (See the exhibit, “World-Class Companies Treat Innovation as a System.”) The system should be rooted in experimentation, and, like all adaptive systems, it must evolve over time as the external environment and internal needs change.

Apple iTunes Sees Big Drop in Music Sales
Dive of at Least 13% in Download Sales Underscores Music Industry’s Fragile Recovery
By
HANNAH KARP

http://online.wsj.com/articles/itunes-music-sales-down-more-than-13-this-year-1414166672

Even the disruptors can be disrupted. The spread of streaming services and the overall trend of a sharing vs. ownership culture is hitting Apple hard. One of the drivers for purchasing Beats Music was their existing streaming business, an example of expanding a Capability Platform through acquisition vs. development. A company needs a process that continually searches for their potential disruptors.

Music sales at Apple’s iTunes Store have fallen 13% to 14% world-wide since the start of the year, according to people familiar with the matter. The decline is stark compared with a much shallower dip last year. Global revenue from downloads fell 2.1% in 2013, according to the International Federation of the Phonographic Industry. 

The plummeting download numbers help illustrate why Apple bought the $10-a-month subscription streaming service Beats Music earlier this year, as part of its $3 billion acquisition that included headphone maker Beats Electronics. Apple is rebuilding Beats Music and plans to relaunch it next year as part of iTunes, according to a person familiar with the matter…. 

…..Nielsen Entertainment analyst Dave Bakula chalked up the declines in downloads mostly to “a shift in the way consumers are consuming music,” noting that total streams on services such as Spotify and Pandora Media Inc. were up 46% for the year to date, compared with the same period last year. Streaming services now account for nearly one-third of the revenue from recorded music in the U.S., according to the RIAA… 

….The plummeting download numbers help illustrate why Apple bought the $10-a-month subscription streaming service Beats Music earlier this year, as part of its $3 billion acquisition that included headphone maker Beats Electronics.