The Innovation Dilemma: Why Focusing on People, Not Products, Drives True Progress
In 2008, Netflix made a daring leap. They weren’t the first to recognize the potential of streaming content online, but they were the first to build an entire business around it. What began as a DVD rental service transformed into a digital entertainment powerhouse, ultimately reshaping the media landscape. Netflix’s shift to streaming wasn’t merely a technological upgrade; it was an innovation that spurred a fundamental change in how people consume entertainment, disrupting not only the video rental industry but the entire entertainment ecosystem.
From early humans using stones to spark fires to the creation of groundbreaking technologies, innovation has been woven into the fabric of human evolution. It’s a defining trait of homo sapiens—our ability to think beyond immediate needs and craft solutions that advance societies. However, what we recognize as innovation today is not new; it’s an acceleration of our intrinsic drive to create, evolve, and adapt.
The competitive landscape has shifted dramatically. In today’s fast-paced market, organizations innovate not just to improve but to survive. Those that thrive can rapidly turn ideas into realities, while those that don’t often fade into irrelevance. Innovation has evolved from being a linear process to one driven by urgency—a race for dominance where standing still is not an option.
Thus, innovation today isn’t solely about creating; it’s about creating swiftly and strategically, staying aligned with ever-evolving market needs and customer expectations.
The Innovation Dilemma: What We Missed
In 1997, Harvard Professor Clayton Christensen introduced The Innovator’s Dilemma, a theory that fundamentally altered how businesses approach disruption. The idea was simple yet powerful: successful companies often fail not due to a lack of innovation but because they focus too heavily on sustaining innovations—incremental improvements to existing products—rather than on disruptive innovations that create entirely new markets or reshape existing ones. The dilemma arises when companies, driven by existing customer demands and established business models, optimize their current offerings at the expense of transformative opportunities.
Christensen’s theory became a reference for innovation, inspiring companies to rethink how they approached new technologies and markets. Take, for example, the evolution of digital photography. While Kodak pioneered the technology, it focused on sustaining its film business and missed the disruptive potential of digital. As a result, other companies seized the opportunity, transforming how we capture and share images today.
Yet, despite the widespread adoption of innovation frameworks and dedicated resources, organizations often fail to realize the transformative successes they seek. Why? Because most models focus on what to innovate: new features, improved products, or streamlined processes. Companies chase the next big thing but overlook a critical element—the who. Who is the innovation for? Who will it serve?
This oversight lies at the heart of the innovation dilemma. Many organizations become trapped in their product-focused worlds, detached from the individuals they aim to serve. The most successful innovations emerge not from optimizing products but from understanding customers, sometimes better than they understand themselves.
The Role of Humans in Innovation
In 2011, Airbnb was still an emerging company, facing skepticism from investors. The idea of staying in a stranger’s home instead of a hotel seemed risky and even unthinkable to many. However, the founders shifted their focus from merely providing an alternative accommodation option to deeply understanding their customers—both hosts and travelers. By staying with their hosts and experiencing the platform firsthand, they unearthed a fundamental insight: it wasn’t just about offering a room; it was about creating a sense of belonging, trust, and community.
Meanwhile, major players in the hospitality industry were pouring investments into technology, experimenting with new hotel concepts for various segments. But while they innovated in product and experience, they often missed the mark by failing to circle back to the individual—the person they were ultimately serving. They optimized processes but didn’t prioritize the human connection that travelers sought.
This example underscores the essence of human-centered innovation. It shifts the focus from the product or technology to the needs, desires, and behaviors of the people being served. The most successful innovations don’t simply add features or improve efficiency; they align so closely with human needs that they become indispensable.
Today, many organizations are missing this crucial point. Despite investing heavily in technology and product design, they find themselves struggling to create solutions that truly resonate with customers. By focusing excessively on what they are building, they overlook the why—the human purpose behind it.
True innovation happens when companies can anticipate customer needs before customers themselves realize them. It’s about deeply understanding human behavior, identifying unspoken desires, and crafting solutions that enhance the human experience.
As history shows, companies that place people, not products, at the center of their innovation efforts succeed in creating offerings that connect on a deeper level. If the human is not the purpose of innovation, it is merely progress without purpose.
Innovation has always been a fundamental part of human progress, but today’s world demands a faster and more aligned approach. Christensen’s Innovator’s Dilemma highlighted a core challenge: while many companies can innovate, they often fail to innovate disruptively. They focus on what needs to be improved, forgetting to ask who they are innovating for.
The role of human-centered innovation becomes clear when we recognize that it’s not just about adding features or adopting the latest technology. It’s about deeply understanding the individuals we aim to serve, so our innovations resonate on a human level. In a time where the pace of change is relentless, organizations that put people at the heart of their innovation efforts will be those that endure—because innovation without purpose is merely progress, and the true purpose of progress is to improve lives.