The Business Leaders’ Innovation Toolkit … What do you need to change your world?
September 7, 2018
Innovation in large companies was typically about 3 things – strategies that included the need for innovation, innovation processes typically built around a structured linear approach with stage gates, and how to build an innovative culture.
And then came a tsunami of small businesses, who seemed to be able to innovate better. What did they do? They thought more holistically about innovation and how it applied to every aspect of business. It started with the leader, typically an entrepreneur, and everything from the business model to the branding, the people to recruit and the investors to satisfy, was oriented around doing it better and different.
Whilst classic innovation theories from Clay Christiansen to Chan Kim, Disruptive Technologies to Blue Ocean Strategy, are still useful, innovation concepts have been moved on rapidly by the likes of Eric Ries and Alex Osterwalder, the Lean Start-Up to Business Model Generation. Relevant to big and small companies alike.
So here are some of the most useful innovation concepts to embrace:
Business model innovation
Business model innovation refers to the creation, or reinvention, of a business itself. Whereas innovation is more typically seen in the form of a new product or service offering, a business model innovation results in an entirely different type of company that competes not only on the value proposition of its offerings, but aligns its profit formula, resources and processes to enhance that value proposition, capture new market segments and alienate competitors.
The focus on business model innovation really took off with a book by Alex Osterwalder and Yves Pigneur. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers is an easy to approach guide that explains the most common business model patterns and inspires you on how you can apply them in your innovation process.
The new corporate garage
“Three trends are behind this shift. First, the increasing ease and decreasing cost of innovation mean that start-ups now face the same short-term pressures that have constrained innovation at large companies; as soon as a young company gets a whiff of success, it has to race against dozens of copycats. Second, large companies, taking a page from start-up strategy, are embracing open innovation and less hierarchical management and are integrating entrepreneurial behaviors with their existing capabilities. And third, although innovation has historically been product- and service-oriented, it increasingly involves creating business models that tap big companies’ unique strengths.”
Scott Anthony is one of the leading innovation minds and I think he is spot on with this. Big companies are about to kick small company butt when it comes to innovation.
Many people ask what open innovation is. I suggest that you view open innovation as a philosophy or a mindset that you should embrace within your organization. In a more practical definition, open innovation is about bridging internal and external resources and act on those opportunities. The value proposition (better innovation to market faster) this gives companies that get it right is simply too good to miss out on.
Henry Chesbrough said “Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology”
Open innovation is often viewed as an umbrella term that also includes crowdsourcing, user-driven innovation and co-creation. In order to avoid too much confusion on semantics, I suggest that we focus on what really matters here; bring external resources into your innovation process.
The lean startup
Eric Ries, the key thought leader on the lean startup methodology, states that this is a movement that is transforming how new products are built and launched. His initial focus was start-ups, but he is definitely right in also pursuing this for big companies.
Some of the key ideas behind the methodology are: fail fast – fail cheap, “Can we build a sustainable business around this set of products and services?” and develop a minimum viable product to begin the process of learning as quickly as possible.
Yes, this is one of my favorite personal topics, but it is also something that is picking up interest among clients, in blogs/media and at conferences. The intersection of social media tools and (open) innovation is still at the very early stages, but it will become increasingly important as open innovation takes hold. One reason is that the future winners of innovation know how to make communities (virtual and physical) work and a social media will be a key driver for this.
Reverse innovation is an interesting concept / book that helps us understand what it means to develop in emerging markets first, instead of scaling down rich world products, to unlock a world of business opportunity. Vijay Govindarajan and Chris Trimble based their concept on these three key elements:
1. You must innovate, not simply export, if you want to capture the mammoth growth opportunities in the developing world.
2. The stakes in emerging economies are global, not local. Passing up an opportunity in the developing world today may invite formidable new competition in your home markets tomorrow.
3. Legacy multinationals must rethink their dominant organizational logic if they are to win in an era of reverse innovation.
Useful innovation links
Tech In Asia
Top Trends Now and Next
Bothsides of the Table
The Nordic Web
Mine That Data
Business Model Innovation
Business Insider: Chart of the day
Think with Google
30 blogs for business ideas
Innovation videos and documentaries
Innovation tools to get started
- 50+ Business Models you can copy today
- The Innovation Matrix – A tool to define the Innovation Strategy that best fits your company
- 100+ Resources that every Innovator should know
- How to be an Innovation Rockstar
- 16 cognitive biases that can kill your decision making
- The Idea Generator – Generate new ideas for your industry
- 15 Innovation Posters
- The Experiment Picker
- Ideation Guide – A detailed actionable guide that allows you to host your own ideation session
- Validation Guide – A guide with examples to learn how you can validate new business ideas
- 52 hacks for Innovation-oriented organizations
- Brainstorm cards
- Business Model Kit
Innovation books to take you further