Don’t Be a ‘One-Innovation Wonder’

By: Jeffrey Baumgartner

Take a lesson from Airbus and WebVan: When you have that really big, disruptive, amazing, incredible, world-changing idea, it should not mark the end of your innovation process.

In the mid 1990s, Airbus had a very big, innovative idea: a massive passenger jet aeroplane capable of carrying 555 passengers on two levels. Moreover, using new technologies the aeroplane would be fuel efficient and have a greater range than existing jets. Launched in December 2000, the Airbus A380 prototype dwarfed the competitor’s largest passenger jet: the Boeing 747. And as orders for the A380 poured in, the management of Boeing became understandably nervous. For years, their 747 was the only massive passenger aircraft and it owned the market for large transcontinental aeroplanes.

Boeing knew there was not room in the market for two massive jets of the size of the A380. So, instead of developing a competing product, Boeing worked on some less spectacularly innovative ideas of their own, focusing on smaller, faster, more fuel efficient passenger jets. Nevertheless, Boeing management remained nervous. Would Airbus overtake them and become a firm leader in civil aviation? Both airlines have for years been fighting neck and neck for the market in which presently there are no other serious players.

Unfortunately for Airbus, they followed their really big innovation – the A380 – with few other innovations. And those other innovations were related to the design of the 380 rather than manufacturing, other products, their processes or any other aspect of their operations.

Worse, manufacturing problems resulted in delays which were not helped by Airbus’s highly bureaucratic structure and political inefficiency (Airbus is largely owned by the French, German, Spanish and British governments – so you can imagine that operational efficiency often gives way to satisfying political demands).

Airbus had placed all of their eggs – and all of their innovation – in one basket.

Worse still, Airbus had placed all of their eggs – and all of their innovation – in one basket: the A380. Meanwhile, their other planes were ageing and in need of updating.

The result? In spite of a huge innovation that had the aerospace sector salivating in anticipation, Airbus’s shares are losing value and the company is likely to lose a lot of money before they make any on the A380. Indeed, costly delays mean they need to sell ever more of the A380s in order to earn back their investment.

Meanwhile, Boeing, with their steady stream of smaller innovations in various projects, together with innovations in their production process, is looking better all the time. They are more profitable, keeping closer to their schedule and innovating better.

Is the lesson to be learned here that little innovations are better than big innovations? No. The mistake that Airbus made is one that many other companies have made throughout history: failing to continue to innovate after that first big innovation.

Had Airbus continued to innovate, especially in improving manufacturing efficiency and existing aeroplane products, they would be in a far better position today, with reduced costs and an attractive range of products, instead of a single very attractive product that the customers cannot yet have.

Another example: WebVan

Airbus is not alone. The dot-com boom resulted in a corporate graveyard of small businesses with one innovative idea each. Webvan was to have provided on-line ordering and home delivery of groceries (although an old Scottish friend of mine liked to point out that when he was a child, his mother could call the village grocer’s and get a home delivery of her order), Boo.com had a highly innovative on-line fashion shop concept, Pointcast was a leader in “push” technology which would send web pages to your browser while you slept.

However, all of these organisations no longer exist – at least not in their original forms – for the simple reason that they failed to continue to innovate beyond their initial big, innovative idea.

WebVan was innovative in their idea and on-line ordering system, but failed completely to innovate in the logistics. And it was expensive logistics, in the end, that killed them. Boo.com was all innovative show and no innovative back-end. They went bankrupt.

Conclusion

The lesson to be learned, then, is very simple. When you have that really big, disruptive, amazing, incredible, world-changing idea, it should not mark the end of your innovation process. Rather, it should mark the beginning.

By Jeffrey Baumgartner

Photo credit: Paper airplane from Shutterstock.com