(This is just my opinion.)

As the consequences of the subprime mortgage mess roll on and on;  America’s economy is sputtering, housing markets in Europe are stalling and financial markets around the world are feeling poorly.  How did it all get so out of hand?

I found myself thinking about this when I was out in the barn one evening, with a goat that wasn’t feeling so well.  My wife raises dairy goats, and I try to pitch in when I can.  Goats are not the biggest marketplace for veterinary medicine in the United States, so you don’t have that many treatments made specifically for goats.  So, when we have a goat that’s really ill, often enough the vet will suggests a treatment designed for sheep, or for horses, but which seems to work well on goats.

Veterinarians, like medical doctors, have the privilege of “off-label prescribing.”  Once a medicine has been approved for one use, it can be used for other purposes, with caveats.  Sometimes these other purposes become a major part of the market for a medicine.

That’s innovation, after all–discovering that a product designed for one need can also serve another.  Of course, you want your people to be on the lookout for those opportunities.  The ROI for this kind of innovation is usually very attractive.

That’s pretty much what happened with sub-prime mortgages.  They’re great medicine for certain conditions.  (OK, many of these potions were taken on the false assumption of continuing real estate price increases.)  But then mortgage brokers found major new uses for these instruments.  The off-label prescribing of alternative loans gotw ay out of hand.

So why doesn’t the same thing happen with veterinarians?  I think the key difference is that veterinarians are licensed professionals, with professional codes, continuing education requirements, and reputations to protect.  By contrast, too many loan originators take a “churn and burn” approach to their sales force.  Salespeople make their quota or they don’t get paid, and don’t stick around long.  Honestly, why worry about long-term consequences (even if I realize what might happen) if you likely won’t be around by that point?

By contrast, if loan originators viewed their salesforce as valuable sales professionals who were not only making sales but building relationships and expertise–and if there were the continuing investment to maintain the currency and integrity of these professionals–it is hard to imagine that we would have this mess today.

Yes, there would be a certain percentage of loas gone sour–if you never regret a deal, then you’ve been too cautious–with more gone sour among borrowers with weaker finaces.  But a worldwide epidemic of bad loans?  I don;’t think a community of licensed financial doctors would let that happen.

- Ed Rigdon, Professor at Georgia State University

I have been a judge for the MAX Awards for several years, but I am writing this for myself and do not represent the opinions of the Georgia State Marketing Roundtable.I can tell you that the Marketing Roundtable meeting in January when we judge the entries is one of the most interesting and liveliest meetings of the year.At some point in the discussion of an entry, it always happens that one of the Members will ask “Is this really innovation?”A very good question!

Wikipedia, the free online encyclopedia, identifies several types of innovation.mThe types that we most frequently encounter in evaluating the MAX award entries are:

Business model innovation - changing the way business is done in terms of capturing value.

Marketing innovation – developing new marketing methods with improvement in product design or packaging, product promotion or pricing.

Organizational innovation – creating or altering business structures, practices, and models, (may include process, marketing and business model innovation).

Process innovation - implementing new or significantly improved production or delivery method.

Product or service innovation - introducing a good or service that is new or substantially improved in functional characteristics, technical capabilities ease of use, or any other dimension.

Perhaps the innovation model we struggle with the most is the application of any type of innovation from one industry to a different industry or to a new market segment.  While this sort of “copying” may not seem to meet the criteria of pure innovation, we do include these situations as innovations.  Certainly the ability to see beyond one’s boundaries and to have the vision and foresight to apply the tools and techniques of one industry/market segment to another often leads to the delivery of increased value, improved business structures and efficiencies for the new application.  And if that’s not the purpose of innovation, what is?

 –Debra Semans