This is a guest post by James Gardner, an innovation author and chief strategy officer at crowd innovation company Spigit.
In the last decade, Microsoft has spent between four to five times as much every year on research and development as Apple. Yet, their stock price has been flat, whilst Apple's has soared out of all proportion. If the conventional wisdom about innovation and R&D was correct, then surely the opposite should have been true.
It is an outcome which challenges one of the greatest corporate myths of our time: if you invest to create something genuinely new, something that's a breakthrough, you have a better than average chance of windfall returns.
When I was head of innovation at a major European bank, I believed my job was to create the next breakthrough that would change the business. I wasn't successful.
In my next role, as the chief technology officer of the biggest public sector organization in the UK, my challenge was again to create the next wave of innovation that would change everything.
Change happened, but none of it was of the breakthrough kind that reshaped the world. Instead, we made lots of little things happen, and they all added up to a respectable number over time.
The story of Apple and Microsoft, any my own personal experiences led me to research "Sidestep and Twist", a book which explores these issues.
It turns out there are important lessons about innovation that leaders - especially technology leaders - can learn once you take away the myths.
For example, there hasn't really been a genuine breakthrough that led to actual profits in the last couple of decades. All the "hit" products have been incremental improvements on something else.
Another is this: patents, trade secrets, and copyrights seem to be less a driver of value than they ever have been. Those businesses that are relying on them are protecting yesterday's innovation: newer kinds of businesses aren't bothering.
And most importantly of all: competitive advantage is now less about features than building products that get better the more they're used.
What are your innovation efforts concentrated on? If, like most organisations you're concentrating on genuinely new stuff, you might like to think again. History gives us a long history of failure for breakthroughs.
James Gardner's book "Sidestep and Twist" is available on Amazon.
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I do not think James quite understands what "real" innovation is about. First is to recognise from idea to a production ready product takes minimum 5 years more likely 10. He like many confuses innovation with just trying to a job better with established resources.
I came across James at DWP where he was asked to look at our "disruptive" innovation in Business Software. It is what Bill Gates called the holy grail of software and removes over 90% of coding to build exactly what is required - including a benefit system. To sum up it was a fiasco - maybe James was under pressure to ignore breakthrough technology. James had real opportunity to tackle the very issue he raises about genuine breakthroughs and like most failed. See the paper I wrote re UK Government http://bit.ly/hnPMMl on a benefit system!
We in UK are v good at real innovation but bad at supporting at the critical stage of exploitation. Maybe James has come out of his glass house.... because his comments do display understanding in particular the patent issue. We rely on prior art which we established by just getting out there a telling what we had dome - so when Microsoft IBM and SAP tried to patent what we actually had built some 8 years earlier it was effective! Prior art always wins with virtually no cost - but make sure you have marketed your ideas asap.
Real innovation is going to be important for UK plc maybe next time James sees breakthrough technology he will stand up and be counted to help make it happen