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Published by Tina Marie Jones

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Published by: Tina Marie Jones on May 27, 2011
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In just over 30 years, ThomasEdison pioneered six industries thattoday have a cumulative marketvalue of more than $1 trillion. Howdid he do it? This article showsthat Edison was ahead of his time,adopting a needs-first approach toinnovation that is being hailed asthe wave of the future today.
America has reigned as the world’s dominantinnovation leader since drawing its firstbreaths as a nation in 1776. Pluck and “Yankeeingenuity” drove its growth during its first100 years. But in America’s second century,it was the genius of Thomas Alva Edison(1847–1931) and the efforts of his legions ofemployees that spurred the nation forward toglobal dominance as a leader in scientific andtechnological innovation.With the creation of Edison’s storied MenloPark, New Jersey, laboratory in 1876, Edisonnot only invented what we know today asresearch and development, he also pioneeredsix industries in just over 30 years—all of whichremain with us today. At Menlo Park and laterin his West Orange, New Jersey, lab, Edisondesigned a systematic process for successfullymoving concepts from an idea stage all the waythrough to commercialization.Historical records indicate that the sixindustries pioneered by Edison generateda market value of $6.7 billion by 1910 (seeTable 1)—or more than $100 billion in today’sdollars. Furthermore, from the roots of thosesix industries grew much of the moderntechnology that shaped America in the 20thcentury. On a global level, the ripple effect ofthese six industries—alongside Edison’s 1,093U.S. patents and 1,293 international patents—accounts for more than $1 trillion in marketvalue today.Today, in an era when leaders in bothdeveloped and developing markets aregrappling with how to pioneer new industriesand drive value, Edison has a great deal to teachus. Edison’s success provides numerous cluesas to how to look at 21st-century markets, howto discover new market space, and how to slicethrough the complexity that often accompaniesthe development of new products and services.How was Edison able to consistently and sosuccessfully carve out new market space in sucha relatively short period of time? And how canwe begin to leverage Edison’s value creationinsights today?
Ideas-first or needs-first: What would Edison say?
©2009 Sarah Miller Caldicott. All rights reserved.
Table 1. The Six Industries Created by EdisonInventionsIndustryYear
Edison electric pen and pressDocument duplication1873Carbon button microphone (telephone transmitter)Telecommunications 1876First phonograph and recordRecorded sound1877Incandescent electric light and system of electrical powerElectrical power1879Motion picture camera and moving picturesThe movies1893Alkaline storage batteryPortable power1905
Historical records indicate that the six industriespioneered by Edison generated a market value of $6.7 billion by 1910—or more than $100 billion intoday’s dollars.
I came to understand Edison’s innovationcompetencies during three years of extensiveresearch I conducted at Rutgers University,where I had access to hundreds of thousandsof documents housed within the ThomasA. Edison Papers, an archive that chroniclesEdison’s life and accomplishments. The resultwas a first-ever analysis of the five innovationcompetencies that enabled Edison to innovateso successfully throughout his 62-year career.The five competencies of innovation areexplained in depth in my book,
Innovate LikeEdison: The Five-Step System for BreakthroughBusiness Success,
co-authored with Michael J.Gelb (Dutton Penguin, 2007).This article addresses another importantobservation I made following my research. Itexplains how Edison successfully carved outnew market space and drove efficient productdevelopment efforts by adopting a customer-needs-first approach to innovation ratherthan an ideas-first approach. I will explore thesignificance of this finding using two examplesdrawn from Edison’s portfolio of successes:the development of the document duplicationindustry and the development of the lightbulband the system of electrical power.Throughout my analysis, I reference a modernneeds-first approach to innovation that I’vefound to be closely aligned with Edison’s ownworld-changing view on innovation. Thisapproach, called Outcome-Driven Innovation(ODI), was developed by Strategyn, a US-basedinnovation consulting firm. It incorporates manyof Edison’s Five Competencies of Innovation‰and provides a modern language and processaround Edison’s approach to innovation. Itis testimony to Edison’s foresight and geniusthat his innovation practices offer fresh andprofound insight for 21st-century executives.
Tough lessons about customerneeds and utility
One of the most notable aspects of Edison’sworld-changing innovation process was hisbelief in linking basic research to appliedscience. Edison conducted his extensive basicresearch work (for example, studying the natureof vacuums, or identifying the rate at whichthe eye tracks moving images) shoulder toshoulder with his applied-science investigations,focusing on such practical questions as how toconnect lightbulbs together. This meant thatthe insights that sprang from Edison’s researchlaboratory could be efficiently corralled for usein commercial applications—but only if therewas a perceived market or customer need.Edison learned the hard way about theimportance of understanding customer needsbefore launching an invention. His first toughlesson came with the commercial failureof his patented Electronic Vote Recorder in1869. Deciding that he wanted to harnesshis extraordinary knack for creating devicesthat incorporated principles of mechanics andelectrochemistry, Edison devised a machine thatcould quickly and accurately tally up the votesof legislators voting on a bill. By simply havingthe legislators punch in their name and whetherthey were voting yes or no, the votes in everylegislative session could be accurately countedand ascribed to the appropriate legislator.
Ideas-first or needs-first: What would Edison say?
©2009 Sarah Miller Caldicott. All rights reserved.
One of the most notable aspects of Edison’s world-changing innovation process was his belief inlinking basic research to applied science.

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