Peter Drucker on innovation

"Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth."

Since the beginning of business creation, successful brands have gone through three phases of evolution: mystery, model, and method. Mystery is the “I wonder . . .?” phase: “I wonder if people will purchase an automobile if I can get the price down to ‘x’?” The next phase is the model phase . . . a messy, imperfect process: “Let me try to produce an automobile for ‘x.’”

Once the model phase has proven out the mystery--“Wow! They WILL buy it.”---successful brands quickly move into the methods phase: “How can I produce enough automobiles at the target price to fulfill demand, and make a profit while doing so?” Some are driven by insights regarding a market opportunity like Henry Ford, while others, like Michael Dell, are simply trying to stay ahead of the competition and remain profitable. Either way, a brand is born.

The problems arise when successful brands . . .

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Posted October 18, 2005
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