The lingering economic malaise has forced business managers of all stripes to do some navel gazing about how to turn around company fortunes. The often prescribed remedy is to innovate — come up with game-changing products, services, or ways of delivering them.

But managers can’t exactly command their employees to innovate. And in fact, most managers are drawn to management approaches that are unlikely to result in any kind of inventive developments.

So says Roberto Verganti, a professor of innovation management in Italy and author of, among other things, a book called Design-Driven Innovation. Verganti should know what he’s talking about. He rubs elbows with a lot of the top Italian design firms known for devising some of the world’s hottest-selling products.

One problem with most managers, says Verganti, is that they’re drawn to step-by-step processes and tools. The downside is that something efficiently codified this way can easily be replicated by competitors. Another difficulty is that management often confuses styling for innovation, a mistake Verganti says auto companies are particularly prone to make. Add styling to a design that is just an incremental improvement of its predecessor, and you get products like cars that seem to look alike. So, “When I listen to professors and managers say that design is a source of differentiation in mature industries, I think they are 10 years behind. It used to be that way, but no longer,” Verganti says.

And if you want to come up with something truly innovative, forget about getting close to your customers. Focus groups, for example, are only going to focus on what they already know and currently need. Innovative ideas just tend to confuse them.

The classic example is what happened when focus groups in the 1970s were shown Speak & Spell, the first synthesized-voice toy that helped children learn the alphabet and spell words. Parents weren’t impressed. They thought it was just another noisy plaything. Texas Instruments almost killed the project. It only brought Speak & Spell to market after a lot of convincing by the four engineers running the effort. Good thing: Speak & Spell’s descendants are still selling well today.

Companies also sometimes miss the boat on innovations by limiting their strategies to those of technological substitution, says Verganti. Truly innovative products don’t just improve on the performance of what came before. They often change the meaning of the products themselves in the eyes of their users. The iPod, for example, wasn’t just a better MP3 player. It gave birth to the idea of letting people produce their own personal music and revolutionized the music industry.

The principal way to get at insights which can propel innovations, says Verganti, is to collaborate closely with a few key visionaries. Often these are users working at the cutting edge of what an existing product offers and who may have modified, often for their own purposes, the product in ways that point to how its meaning is likely to evolve in the context of its use. (In autos, drag racers who gut conventional vehicles and outfit them with electric motors and trunks-full of batteries come to mind.)

Of course, this sort of thinking is unconventional, but it is likely to distinguish leaders from followers. After all, says Verganti, “Steve Jobs did not invest in design on the basis of financial analysis.”

Leland Teschler, Editor