Category design for radical innovation

My favourite business book of late is Play Bigger by Al Ramadan, Christopher Lochhead, Dave Peterson, and Kevin Maney.

It’s a fascinating and straightforward read which really helped me reframe the way I think about disruption and radical innovation. I highly recommend it (and if you’re short of time skim the slightly long-winded (sorry!) intro chapter and focus on the first 2/3rds of the book).

As co-founder of an innovation consultancy, I have a long-standing interest in the way new products and services are designed and delivered. From understanding customers and markets, to ideation, product development and go-to-market strategy.

At FreshMinds we’ve long used a framework based on three categories: incremental, breakthrough and radical innovation. There’s a 2x2 of course — what would consultancy be without one?

Essentially, incremental innovation is little humdrum — perhaps a new flavour, packaging or proposition bundle. Sure, it’s new and improved, but it probably won’t set the world alight. c. 70% of innovation hits this category and it’s hugely useful and valuable commercially for business, it’s just not something you’re going to tell all your friends about.

Breakthrough innovation on the other hand, is a lot more interesting. Driven by business model or technology newness, this has considerably better results — overlapping with “10X product thinking.” Breakthrough innovation overcomes consumer inertia around switching product, whilst driving uptake and word-of-mouth far beyond incremental results. Many brilliant products and businesses fall firmly into this area.

The dream pursuit though, is always for radical innovation. Something much rarer which results in true market disruption. Play Bigger focuses on this with an emphasis on category design. The central argument is that disruption occurs when a business is not just better, but different. Better reinforces the position of the existing category leader, but different creates something not yet seen and defines a new future.

My favourite example from the book is that of Elvis Presley and his effect on music: “Elvis Presley didn’t set out to “disrupt” jazz. He set out to create rock and roll — a product that came from his soul. Rock was different, not better, than jazz.”

Too often we think of disruptive innovation as the process — looking for ‘disruptive business models’ or ‘disruptive technology.’ Lockhead et al argue convincingly that this is the wrong way to think of it — that the focus should be on category design. Disruption will be the end result if the new category exerts enough pull to shift consumer behaviour out of the incumbent.

After setting out their thesis the rest of the book is a practical How To for category design

Overall, it’s a must-read for anyone attempting to build a category-defining business. Something that we’re trying to do at Fluidly with a new category of intelligent cashflow.