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One of the most enjoyable sessions I saw at the World Business Forum was an interview with filmmaker George Lucas. Quite striking was the degree to which both serendipity and fate were intertwined in his education and early career. Also striking was seeing film clips of one after another scene showing a way in which Lucas has innovated.

And beyond the obvious – that he’s an extraordinarily creative filmmaker – Lucas has innovated the very business of filmmaking in a variety of ways:

• Lucas was among the first to insist on getting merchandising and sequel rights. He then created the kind of move-related merchandising we know today, and created the sequel-as-franchise idea with Star Wars
• Rather than limit himself to contractual obligation as a way of keeping control, Lucas simply formed his own studio
• Lucas saw digital moviemaking coming and started Industrial Light and Magic to experiment with digital filmmaking techniques that pioneered an industry.
• Lucas innovated the very sound of movies when he created THX Sound, paving the way for a day when enhanced sound became part of every entertainment experience from car stereo to mp3 player earbuds to video games with surround sound and a DVD player in your living room.

While Lucas has made his mark pushing the technological envelope, he described himself as not particularly technologically oriented. He writes in longhand and when developing filmmaking technologies often seems to cast himself almost in a “lead user” role, directing others as they do the technological work of creating the user interface. He focuses on the goal and lets others actually do the work.

Lucas seems to be unusually adept at spotting the overall direction indicated by trends, and is unusually fearless and clear-thinking as he goes about inventing ways to capitalize on new trends and technological innovations without regarding to protecting what he already has. This is a trait shown by almost no incumbent whose businesses and products are under attack from potential disruptors.

For example, although Lucas said he “never imagined people would go through Star Wars frame by frame, and tweet their friends about its cinematic tricks,” he embraced DVD technology when it came out. He has embraced every type of medium, and said during his World Business Forum interview that not only has he made films for all kinds of screens, he’s now focused on learning to make films for mobile phones.

Yet he also seemed quite humble, acknowledging others’ innovations and at one point saying that he had thought that due to its complexity the Lord of the Rings saga couldn’t be made into movies, and that he thought Peter Jackson had done a great job at that.

Running as a theme throughout Lucas’ story was that you should keep trying, keep experimenting, move on when the experiments don’t work, and build on them when they do. He quoted one of his most famous characters, Yoda, saying “be careful what you hate – you may become it,” which is one way of saying don’t focus on negativity and failures. Another Lucas aphorism appropriate for innovators: “Nothing is a lost cause, unless you give up.”

Who is your competition? The question seems so simple, but a company that defines its competitive set too narrowly can miss disruptive attackers and high-potential growth opportunities.

Take, for example, a recent article in the Wall Street Journal describing Apple's surprising entry into the video game market. A few short months ago, Apple launched the "App Store," where iPhone and Touch users can download a wide range of applications. Some applications are free, others cost a few dollars.

A recent visit to the App Store showed that seven of the top 10 applications are games. More than 2,000 games are available in the App Store. Developers are taking advantage of unique features in Apple's products--like an accelerometer that tracks motion--to develop engaging, entertaining games.

One video game manufacturer--Nintendo--is watching this development closely. One of its executives told the Journal, "Whether you chose to play on your DS [Nintendo's handheld console] or listen to music on your iPod, we're already in the same competitive space for time."

In the very next paragraph, a Sony executive displayed a different perspective, noting that Apple isn't a threat because "the consumer is using the mobile gaming on the iPhone and iPod Touch as a time waster."

Anyone who has tracked this industry over the past couple of years would find these answers predictable.

Read the rest on Scott's Harvard Management blog, Innovation Insights.

This New York Times article describes the positive fallout that resulted after Ph.D. candidate Johnny Chung Lee posted a YouTube video last December showing how the Nintendo Wii remote controller could transform a normal video screen into a virtual reality display (an idea I also referenced in this Emerging Technology Watch article). So far, the video has been seen more than six million times, helped Lee get a job with Microsoft and helped him get listed in this year's MIT Technology Review Young Innovators Under 35.

Lee's choice of YouTube to disseminate information about his invention was perhaps more innovative than what he actually invented. Sais the Times: "Contrast this with what might have followed from other options Mr. Lee considered for communicating his ideas. He might have published a paper that only a few dozen specialists would have read. A talk at a conference would have brought a slightly larger audience. In either case, it would have taken months for his ideas to reach others."

Also, demonstrating his invention in a YouTube video allowed Lee to not only reach millions of people, it allowed for him to receive feedback and essentially test his ideas — an illustration of one of the prime uses of social media: listening to others. Those others might be your customers if you are using social media as a marketer. If you are an inventor, listening to others gives you valuable information on how your idea works and how it might be tweaked — which essentially is the value of a prototype.

Mr. Lee himself told the Times, “ 'Sharing an idea the right way is just as important as doing the work itself. If you create something but nobody knows, it’s as if it never happened.' "

In May, Nintendo will seek to expand its successful strategy of expanding the video game market by launching the U.S. version of “Wii Fit.” All signs suggest that Nintendo’s strategy of “competing against nonconsumption” will continue to thrive.

Nintendo’s strategy has long been one of our favorites. While Microsoft (who makes the Xbox 360) and Sony (who makes the Playstation 3) are locked in an arm’s race to provide cutting-edge game play to demanding customers, Nintendo is trying to reach new customers.

Arguably Nintendo’s first breakthrough success with this market expansion strategy was “Brain Age.” The handheld game targeted Baby Boomers who wanted an easy way to combat the effects of aging on their mental acuity—hardly the typical gamer market!

In 2006 Nintendo launched the Wii. The console’s innovative, intuitive controller makes video game playing so simple that my two-year old son can play the baseball game (admittedly not particular well).

Nintendo’s strategy is not accidental. CEO Satoru Iwata said “Some people put their money on the screen, but we decided to spend ours on the gaming experience. It’s an investment … not simply to improve the market—but to disrupt it.” 

We call this sort of strategy “competing against nonconsumption” …

Read the rest at Scott's Harvard Management blog, Innovation Insights