'Soft' innovation is
at least as important as 'hard' innovation.
Hard innovation without soft innovation is rare,
soft innovation without hard innovation is common.
The two forms of innovation − hard innovation and
soft innovation − are often implemented together.
'Hard' (R&D-based) innovation is more successful
when it is implemented in combination with 'soft'
('street-smart', intuitive, serendipitous)
Non-technological innovation contributes to a
Street smart innovation is inspired by a combination
of life experiences, social intelligence, awareness,
cleverness, intuition and ingenuity.
Companies that create an environment where employees
are encouraged and rewarded for making contributions
of their street smarts in order to fuel the
company's soft-innovation efforts keep inventing
amazing customer experiences.
STAYING COMPETITIVE: Hard-Soft Innovation Synergy
An firm that innovates continuously maintains its
competitive advantage over other firms. A firm that
stops innovating is fading out in the market.
'Hard' innovations take long time to develop and
thus cannot be introduced every day. 'Soft'
innovations can be introduced frequently and thus
help firms to maintain their competitive advantage.
The best market effect is achieved when introduction
of 'soft' and 'hard' innovations are synergized
strategically and tactically.
Meanings and Examples of “Hard” and “Soft”
Innovation means introducing something new or
improvising on something that already exists.
Hard innovation is organized R & D distinguished by
strategic and tactical investment in innovation be
it high-risk-high-return radical innovation or
low-risk-low-return incremental innovation.
For instance, technological innovation,
market-research-based innovation and
beta-testing-driven innovation are all come under
'Soft' innovation is based on implementation of
smart, intuitive, serendipitous, valuable ideas that
anyone can think up.
For instance, outside-the-box ideas for a new
product or brand, paradigm-breaking approaches to
social networking, new ways of customer engagement,
unusual strategies to promote a product or increase
its sales are all examples of 'soft' innovation.
rapid innovative change of an aesthetic nature –
what he terms 'soft innovation'.
Why soft innovation, conceptually, is important.
Innovation that encompasses the artistic, formal (as
in the contrast between form and function),
intellectual or aesthetic, has largely been ignored
in the mainstream literature on innovation.
At the centre of the analysis here is a form of
innovation labeled soft innovation, defined to
encompass changes in goods and services that
primarily impact upon these aspects rather than
Soft innovation mainly concerns product innovation
and product differentiation. The emphasis upon
product differentiation means that economic analysis
designed for exploring (static) models in
differentiated markets can be brought to bear upon
dynamic questions relating to innovation. Innovation
in terms of new product launches in such markets may
reflect either movements towards equilibrium or
changes in the equilibrium. Two main types of soft
innovation are detailed: the first involving changes
in products in the creative industries; the second
involving changes in the aesthetic/intellectual
dimensions of products in other industries.
Innovative activity is an activity with the purpose
of realising new products or new production
Development and selling of a new product demands
both functional and cross-functional innovation.
In today's era of systemic innovation, hard
(technological) innovation is more successful when
it is implemented in combination with soft
(non-technological) innovation. That's why
successful technology innovators undertake
innovative activities is a non-technological sense
as well, for example in the fields of strategy,
marketing, organisation and management.
What it means to be
street smart in innovation and business
Street Smart Disciplines Every Entrepreneur Needs
Some people argue that street smarts are only a
natural born skill, but I disagree. I believe they
are disciplines that can be taught and learned.
In the urban world, being street smart means
instinctively knowing how to keep yourself safe from
scams and bad guys. It means you know your way
around, how to handle yourself in tough situations,
and how to “read” people’s intent. In reality, the
startup world contains those same very risky
streets, but in the business context.
Work smart. This means
using discipline to get smart before you start
working. Find out everything you can about the
business domain you are targeting. In addition,
maintain a change-oriented and future-focused
mentality, with an actionable execution plan. When
someone tells you they are working hard, it’s
usually an excuse for not working smart.
Present everything. If
you are trying to gain commitment or persuade
someone, practice the discipline of thinking beyond
conversational chatter. The four steps of a
successful presentation always include preparation,
practice, delivery, and asking for the order. Make
these part of every interaction with partners,
customers, and team members.
Deal with people.
People do business with your people, not your
startup. Finely tuned people skills make you more
likeable, warm, friendly, open, and effective. Put
yourself in their heads to see things from their
perspective. Have patience, and listen actively
before speaking. Street smart entrepreneurs practice
this discipline until it is not work.
Watch your money. It’s
not unusual for creative entrepreneurs to find
finances difficult to understand, intimidating, or
just a numbing bore. If you feel that way, find a
partner who loves that critical side of the
business. In reality, the discipline to manage cash
does not require a financial genius. It just
requires a discipline of relentless focus.
Get more business.
This discipline is the art of making a constant of
new business opportunities, new customers, and new
revenue flowing into your startup. Develop an
aggressive prospecting mentality, stay close to
current and past customers, get referrals, and
optimize Internet marketing. If you startup isn’t
evolving and growing, you are failing.
Entrepreneurs will always be wearing many hats in
their business and personal life. Even the more
important activities can sometimes be excuses to
avoid the underlying challenge of working toward you
life-changing goals. Learn and practice time
management disciplines. Banish procrastination. Be
decisive. Have fun.
Everybody sells. It
may not be in their job descriptions, but everyone
in a startup should be selling. The very first
moment that you have contact with an investor, or a
customer has contact with your team, an impression
and a perception is created. That perception is your
reality, and you only get one chance to make it a
Overall, street smarts
also requires that you can put all these things
together for problem solving, and to dodge and weave
effectively through the risky business streets. It
means balancing your idealistic vision of how things
could be, against the realities of the business
world. Confidence and a positive attitude are also
required to be a street smart and successful
But attitude and problem solving are not sufficient,
without the basic disciplines outlined above. No one
is born with all these disciplines. These represent
the knowledge and experience of many successful
business people. Study them carefully and practice
them religiously. The alternative is a long and
painful learning curve, which neither you nor your
investors can afford.