Innovation in luxury is driven by an obsession with excellence. It involves the relentless pursuit of refinement, research, and development to continuously enhance the products and services offered. In this context, "good" is the enemy of "great," as mere adequacy is never enough. As Salvador Dali aptly put it: "Have no fear of perfection—you'll never reach it." This philosophy enables luxury brands to consistently produce best-in-class goods and services. But what can non-luxury businesses learn from this approach to innovation?

“Have no fear of perfection - you'll never reach it.”

Salvador Dali

What is ordinary for the luxury industry today often becomes extraordinary for the non-luxury industry tomorrow. Over time, many luxury items trickle down and become accessible to the general public. Books, for example, were once luxury objects affordable only to the wealthy, but eventually, they became available to everyone. Automobiles and cell phones, once exclusive to the elite, are now ubiquitous. The fantastic UFOs of yesterday are the autonomous drones of today, already used in agriculture, delivery services, and the military. As behavioral economist Professor Ludwig von Mises observed, "Innovation is the whim of an elite before it becomes a need of the public. The luxury of today is the necessity of tomorrow."

To innovate, it is useful to look beyond the ordinary luxury found today and focus on the cutting-edge luxuries at the very top. This forward-thinking approach allows businesses to anticipate future needs and stay ahead of the curve.

“The future is already here, it's just not evenly distributed.”

William Gibson

Innovation, or more precisely, innovativeness is an attitude. It’s not just some virtue-signalling buzzword that you put on your corporate website’s ‘about’ section. As Steve Blank explains in his HBR article, too many companies today are preoccupied with ‘innovation theatre’ instead of actual innovation.[1] The bandwagon effect on brands like Prada or Gucci releasing NFTs merely to look more digitally innovative is just that – innovation signalling rather than real innovative action. Actual innovativeness comes from excellence, out-of-the-box or maverick thinking, leadership,  being at the leading edge… These values must not be just words on a PowerPoint presentation, but they need to be anchored to guide the internal culture of the company.

Moncler has successfully merged luxury fashion with sports functionality wear. No other brand was able to do it this way. Breguet invented the Tourbillon watch that deals with how physics affect the precision and accuracy of the mechanical movements. Bang & Olufsen created sound systems that look like installations of art or modern decorative sculptures in your home.

Companies with maverick cultures tend to be more creative and innovative. They are more imaginative and inventive when it comes to improving a product from good to great or finding the right solutions for the client. They can look at things from several viewpoints, of thinking independently, of reframing the problem right and of asking the right questions. Some of the non-luxury brands that borrow from luxury to create innovative concepts are Dyson, Tesla, GoPro, Apple, Uber, Nespresso and so on. Musk’s obsession for performance introduced the Roadster first, creating a halo – Model 3 followed much later, and a much lower price point.  GoPro took image stabilization to the next level while also simplifying the whole user experience. Nespresso’s innovation is the most stylish and user-friendly coffee machines for capsule use. Dyson brought specific innovations to several categories from hair stylers to air filtering and vacuum cleaners.

So where do you start? Which best practices are necessary for your business? What are some of the steps you can take today to become an innovative company?

Three Key Steps to Get Going

 Start looking outside of your industry

• Look outside of your industry and compete with those that are ahead or leading. Rolls-Royce is not competing with Bentley. It’s competing with jets and yachts when it comes to innovating customized interior features. Ferrari is not competing with Lamborghini. It’s competing with Formula 1 when it comes to R&D. In their study M. Poetz, N. Franke and M. Schreier found that it is valuable to look outside of one’s industry and implement knowledge from analogous fields.[2] What’s still magic for one field is already science for another. What one industry hasn’t discovered yet, another industry has mastered in practice. This means when the answer cannot be found within the field, it is to be found outside obit. Where are you looking?

Read the signs from the future

• Turn what’s in sci-fi novels into your brand’s novelties. According to futurists, some of the devices we’ve seen in the films and novels of the last decade will likely become part of our daily reality in a shorter period than most people think. Many of the devices we use today were depicted in sci-fi films such as Star Wars, Minority Report, Star Trek, Avatar and so forth. In 1865, Jules Verne wrote From the Earth to the Moon. What was total fiction back then turned out to be an indication of where the world was headed. Then he wrote Twenty Thousand Leagues Under the Sea in 1870, the source of inspiration for the inventor of the submarine. Verne then went on to envision the helicopter in Nautilus. Clearly, such fictional novels and their heroes have spurred innovation and inventiveness in the great minds of our times. Take Martin Cooper, the director of research and development at Motorola, for example. He credited the Star Trek communicator for the design of the first mobile phone in the early 1970s. “That was not fantasy to us,” Cooper said, “that was an objective.” So what’s fantasy and imagination for some are an actual road map or a clear direction for others. What is a reality elsewhere that could be a reality for you tomorrow?

Build cultural foundations of innovation

• Innovation flourishes in environments where creativity, curiosity, and risk-taking are encouraged. Companies like Google, with its famous "20% time" policy, allow employees to spend one-fifth of their work hours on projects they are passionate about. This freedom to explore and experiment often leads to breakthroughs that fuel the company's growth. Similarly, 3M's commitment to creating an innovative culture has resulted in the creation of iconic products like Post-it Notes and Scotch tape. Where and how does your culture actively create room for innovation?

--- 

[1] Blank, Steve. “Why Companies Do ‘Innovation Theater’ Instead of Actual Innovation.” Harvard Business Review, 7 Oct. 2019, hbr.org/2019/10/why-companies-do-innovation-theater-instead-of-actual-innovation.

[2] Poetz, M., Franke, N. and Schreier, M., (2014). Sometimes the best ideas come from outside your industry. Harvard Business Review Digital Articles, pp.2-6.