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October 10, 2007

Exploitative vs. Exporatory Innovation: Is there a balance to be struck?


A recent AdAge article by Barry Curewitz called want_products_that_get_noticed_change_the_process got me thinking.  Besides discussing a rather obvious piece of research concluding that marketers are reluctant to invest in true innovation, he discussed the difference of exploitative innovation and exploratory innovation.  Exploitative innovation is about launching me too products to take advantage of an already exposed need.  Exploratory innovation is about uncovering an unmet need, developing new platforms, changing the game, offering new solutions and creating value in the customers life.  His big point is that most organizations aren't willing to make the financial investment necessary in exploratory innovation, because there is a longer-term payoff with few guarantees. 

I agree with his assessment that the six sigma culture is crushing the creative instincts of companies.  And as Martin Calle observes, CPG's have no exploratory innovation in them because the quant jocks who rule the companies cannot "measure success into existence."  Marin also makes an interesting point about insecure executives not wanting to allow other up and coming executives to innovate a better way of doing things.  It seems that many companies today aren't willing to make the sacrifice to truly innovate, and that the culture of fast returns, efficient management, corporate inertia and easy money are the main drivers of this lack of creativity.

Plenitude_2 Sadly enough, you can see the same dynamics at play in an industry that supposedly exists to sell its creativity.  The ad industry is full of big agencies, beholden to the P&L's of even bigger holding companies, who cannot find ways to help brands connect with people because they're so busy making advertising.  So the problem is epidemic, and the fallout is what Rich Gold refers to as "The Plenitude."  In his book, the late Mr. Gold outlines the problem of too much crap that ads absolutely no value to our lives.  As an innovator, he provides philosophical solutions to the excess of insignificant things ending it with a quote that should ring true to us all, "We should be careful to make the world we actually want to live in."

In his article, Barry Curewitz suggests that the responsible choice for marketers to make is to strike a balance between exploitation and exploration; to balance short term gain with long-term potential.  Considering the very real business and cultural barriers to exploratory innovation, I don't think this approach will ever really work.  Exploratory innovation has to be something the company does, breathes and lives.  Companies like Apple, Google and Method are innovating to change the way things work.  They operate on principle.  A principle that says there is a better way to do things that are both better for the customer and more profitable for me in the long run.

Companies who run on principle are the ones who are most equipped to innovate.  Similarly, companies who believe that they should be adding real value to the lives of customers are the ones best equipped to actually do so.  I believe that marketers should be adding value to people's lives through their communications.  To do that takes innovation, the exploratory kind.

By Brandon Murphy


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Martin Calle

Sadly, I also recall reading an article, I don't recall if it was in Ad Age, Brand Week or in one of those popular leadership guru books "that the smartest of us are always afraid of being found out." That maybe we are not all as smart as we or others think we are, and that we might be 'found out'. True or false? Let readers make the call.

How 'bout trading blogroll links? I'd like to make it easier for readers to leave my sight and find yours. Thank you. Good stuff here.


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