The Theory of Accelerated Innovation: A Strategic Guide
I may be stating the obvious, but innovation is hard. Even when an organisation successfully aligns its efforts and resources to create a new ‘innovative’ product, it may still fail… Why? Because products (and services and experiences) do not live in a vacuum but in a system. Products sold by organisations require a lot of underlying processes to run smoothly and make the experience complete. Products are also bought by users that see their value, pay for it and want to keep paying for it.
Today I want to talk about the latter two. With innovation, you may go bankrupt if you cannot support your product or if no one is interested in your product. Sometimes, it just so happens that a product is too new for its organisation or market. In the worst cases, your product is too new and innovative for both your organisation and market—a true requiem for a dream.
What does that look like? We use the following diagram, which some may recognise (or use), to map an innovation portfolio (credits to the Innovation Ambition Matrix created by Bansi Nagji and Geoff Tuff, refined from H. Igor Ansoff). We adapted it a bit so we can map how new a product, service or experience is to its organisation and market:
What does it represent? When launching innovative products, both the organisation and market need to have the right mindset, appetite and readiness for the newness that the product represents. In other words: when a product is too new for the organisation or market, it won’t work. The difficulty lies in knowing where that mindset, appetite and readiness is. Some organisations or markets may have a high appetite for innovation, whereas this may be much lower in other cases. Combinations are possible, of course; this makes it a flexible tool that takes into account the singularity of each case.
This leaves us roughly with three types of innovation:
- Incremental innovation: a new aspect to your organisation or the market. Not everything is innovative, but small efforts can have an innovative impact. The innovation is usually at the product level; implementing this innovation can be done quickly or with a reasonable amount of planning and investment. It does show its effect since it is innovation (otherwise it wouldn't be on the map). You won’t have a hard time convincing the majority of the market. The failure rate is rather low.
- Strategic innovation: there is a lot more newness to the organisation or the market. This is where a lot of new products are created but without the big effect of disruption or awe. This type of innovation needs strategy work before it can be translated into a product or get picked up by the market. You don’t need to overhaul the organisation, but you won’t achieve everything in one go. The investment is often higher. You’ll also have a harder time convincing the majority of the market. The failure rate ranges from low to medium.
- Disruptive innovation: this is where new things shake up the world. Your impact on the market and organisation is huge. To be able to disrupt a market, you’ll need a solid future vision supported by a good strategy and product. This is where startups thrive since they only need to convince the market. There is a considerably higher investment, and the time required to succeed is much longer than with other products. You’ll first have to convince the innovators and early adopters before crossing the chasm, making the failure rate quite high. For a lot of corporates, given the impact on the organisation, the investment and time required to convince the market, disruptive innovation is very risky and often avoided or not picked up.
Where do we use these tools? We use them in strategic design tracks or when we talk about product strategy. In our strategic product design approach, we have three layers that make up the success of a product: vision, strategy and the products themselves. Now, when you want to innovate, you want to aim far. But adapt your strategy to avoid the failure of having a product that is too new for the market or organisation. We don't want to miss, like Xerox. The tool allows you to build your future vision over a timeframe to the point you achieve that vision. That’s when we see something different: everything is a system, and we can observe how things work together.
Imagine a company with a product that is very new to that company and the market. How are they able to innovate? First, they set their vision far enough (1) in the disruptive innovation sphere. Secondly, they start, but they only begin with some incremental innovation (2). This allows the company to kick-start their innovation efforts. Teams are on board, get to know the new stuff, and start to apply more innovations (3). The same applies to the market. They suddenly see an improved product over those of competitors. The company picks this up and ramps up its innovation (4). Now, what happens? The company makes a bigger shift: a separate team was preparing a strategic innovation project parallel to the incremental innovation. The company is immediately on board. The market is excited and sales go up (5), which requires competitors to act on it as well. The whole market changes and what was new a year before, is the old ages today. When the iPhone was a year old, no one was talking about the new Blackberry keyboard anymore. As the market changes, we notice something else as well: the appetite of innovation has changed.
Suddenly, your future vision is no longer that disruptive anymore, and it’s getting closer and closer to strategic innovation. At the same time, the appetite for both your company and the market has increased as well. Your competitors are now getting back on track, but now it’s time to give them the final punch: you execute your future vision and introduce a radically better product than the market has ever seen (6). You’ve done it.
This is how we help companies to innovate within their specific market and company culture. It also allows an organization to innovate and disrupt within those constraints, lowering the risk that companies are faced with when innovating.
Interested in learning more about corporate innovation? Contact me or leave your questions and reflections in the comment box below.
