Agree and disagree.

Great quality by itself does not make success. Just look at all the cheap low grade (low quality) crap flooding the west and coming from China. VERY SUCCESSFUL – for the Chinese supplier. Not high quality.

There are anomalies – Look at Apple, the iMac, the iPod, the iPhone.

There is a lesson here:

For success you need to be either very very cheap, or alternatively if you are not cheap you must have all of these;

- a quality product. Not ultimate quality. Good enough quality. Different, and hard to spot the difference.

- solve some problem. If you don’t solve a problem, you don’t give anybody a reason to buy. Be that a cheap video capture card or a monitored security system.

- a means of selling (commonly called a Channel). You need to have a means of getting the product in front of customers.

The world is full of examples of high quality products, or innovative and orginal products loaded with great ideas – which failed.

You need the right thing, at the right price, at the right quality, with the right sales people, sold through the right channel.

There is a continuum – at a lower price customers tolerate lower quality, worse sales people, crappy channels. Heck some will even order over the internet!

Also about companies need to make good products to do well, thats not the only aspect. What if the customer service sucked while the product is good. Like I had a cable connection and I got a really good scheme but the customer service sucked, so I switched to a rival company even though getting a more expensive scheme.
So my point being that many aspects of an organization need to be looked at to really make it a winner. And probably long discussions on ‘innovation or customer centricity’ would aid in bringing these insights.

~Priyanka
http://www.mahindrauniverse.com

You hit the nail on the head when you said that innovation is “a vague, subjective term.” The comments in support of your argument, and those that disagree with you, all seem to be based on how the individual is defining the word “innovation.” Technically, innovation is really just a synonym for the word “new.” What is happening to the word “innovation” is what happened to the word “new” in the past; marketers have whored it out to the point where it doesn’t represent anything meaningful to the consumer. Essentially they ignore claims of “innovation.” So, I think you are right in one sense. The term “innovation” will reach the same status as the word “new.” Firms will continue to use and abuse the word innovation until the point where everyone ignores it. On the other hand, I think deep down most of us feel that innovation means more than that. Even though you can’t put a solid definition to the word, I think it means more than “new” to most people. Although the impact of the word will go away as a fad, the people who are constantly redefining industries and product lines through innovation, whether they call it that or not, will continue to win in the business world. In that sense, innovation is not overrated, it is imperative. However, I concede that I have no idea how to better define innovation. It’s one of those things that you have a gut feeling about, but innovation has so many meanings across so many industries that it defies a more standardized definition.

Finally, I wanted to address your suggestion that instead of focusing on the word innovation, companies should focus on making great products. Again I think you are right in one sense but I also believe that there are two caveats to that suggestion. You are right in the sense that making great products is what companies should focus on. Great products surprise consumers and reward them with things that enhance their everyday life, as you pointed out. Taking the time and effort to make great products is crucial to a firm’s success. The caveat to this is something that comes up often in Clayton Christensen’s books. Making great products sometimes results in overshooting the needs of the target consumer and the product flops. The product may be great, but consumers don’t need it. So making great products is not always the answer. Secondly, most of the first iterations of an innovative product flat out suck. The company didn’t make something great, they just made something that sucked less than the alternatives. Sometimes great companies release products that are pretty crappy at solving a problem. By most accounts the first Palm Pilot sucked horribly, but it was still viewed as a valuable innovation.

Anyways, just my rambling two cents…

-Dan Roberts