INNOVATION BY AGGREGATION
When you first hear the phrase “innovation by aggregation” you probably think I am referring to mergers and acquisitions. And while the idea of acquiring companies to keep your organization innovative is a tried and true method that has been around for over three hundred years, what I am referring to is something a little bit different.
When I say "innovation by aggregation" I am specifically talking about ideas and how they relate to product and service innovation. Simply put, when you innovate through aggregation, you take an existing idea and combine it with other current or new ideas, and in that process of combining the ideas, you end up with a genuinely innovative product or service.
The concept of innovation by aggregation is something used by many inventors for centuries. Some of the most famous inventions of our time have used this method. For example, the light bulb. This was Thomas Edison’s most notable invention, which happened to also have already existed before Edison. Here is what Edison did: He took the previously existing bulb and applied a lower current electricity with a small carbonized filament—this improved the vacuum in the globe of the bulb. He took three ideas from his other inventions and combined or aggregated them to create a new innovative product that disrupted the industry. The use of the light bulb went from a few hours to 60 days, making the light bulb a commercially viable product and at the same time cementing Edison as the innovator of the light bulb
When I look back over my 15-year entrepreneurial career I can see where I used this concept myself multiple times. The most notable was when I created the first securities-based loan origination product. Securities-based loans existed and banks lived long before my product did. In 2008 if you wanted to get a loan on your portfolio you went to your broker and they had one loan product to offer you. But what I realized was that every broker and bank offered a different loan product for the same portfolio. So, what I did was I went to each bank and learned about their security-based loan products and I aggregated that data and could quickly determine which bank/brokerage would give the best loan product for a specific portfolio. My innovation was creating the first securities-based loan origination product similar to mortgage brokers--they know all of the products on the market and help you get the best fit for your needs. So by taking all existing products and services, I was able to create something new and innovative.
So how does a company who is trying to create something innovative in their industry use the concept of innovation by aggregation? I will discuss a straightforward exercise today.
First, you need to have one team member study the space you are trying to enter by going back over ten years and compiling a list of the innovations from that industry.
Next, build a separate team of 3 or more people with different domain expertise and no prior experience or knowledge of the area you are trying to innovate in. What this does is give the team a fresh set of eyes on that particular space.
The team then needs to get a general understanding of the industry (NOT the researched innovations). This is important because you want the team to create their own concepts, whether they already exist or not. Then have the group brainstorm ideas they think would make sense based on their limited knowledge of the space.
Next, have the team look at the compiled data on the industry and combine that with the initial brainstorm of ideas.
Lastly, begin by combining the brainstorm ideas with the previous innovations on the list to see if any of them make sense together. This exercise can be harder to execute in larger organizations where teams usually have the same domain expertise and work in the area in which the company is looking to innovate in.
If that is true for your company, consider seeking an outside innovation consultant to help you properly execute this exercise.