Scaling Innovation

Moving an Innovation project from the sandbox to production is challenging. There are many great articles dealing with the different approaches to solve the issues like Dr. Ralph-Christian Ohr’s Model for Integrative Innovation and Evangelos Simoudis’ Most Critical Horizon….

In the both models the stages of innovation projects move from exploration to exploitation going from Horizon 3 to Horizon 1. The dimensions that are used are Market/Business Model vs. Technology.

The most important transition happens between Horizon2 and Horizon1. When a validated solution needs to hit the market. I would like to examine this transition by adding two more dimensions to the picture and explore the different combinations between them. These dimensions are implicitly embedded in the models, but if we make them explicit it will distinguish the different scenarios and will reduce a bit the complexity of the issue.

The two dimensions I would add are the “Customer Need” and “Who’s in Charge”.

Customer need — is the reason the customer buys our product. It could be New or the Same. I use Need and not “Customer” to distinguish from the cases where we up-sell complementary products to the same customer. In that case it is a New need — like selling tires car owners. Same customer different needs.

Who is in charge — which department is developing the innovation. Is it the existing product group or the Innovation team.

My goal is to expand the different types of innovation, which will reduce the number of the challenges per type (last column). Once we define all cases we could group them based on shared challenges, not on common traits.

So when a company correctly identifies the type of innovation at hand, it will be much easier to find the right solution.

Using this simple table we can see the main challenges for each scenario. The Technology, Monetization model and Customer need are described as Same and New, but we can extend them to more categories. Like:

  • Same
  • Synergetic — when the old and new could reinforce each other.
  • Replacement — when the new technology replaces the old one.
  • Detached — when they are addressing unrelated space.

Some of the scenarios are simple to resolve, some are complicated and few are complex.

For example scaling a product that uses new technology but applies the same Business Model is simple — not easy, but could be planed and manageable. 
Compare it to the case of scaling a product based on new technology and new business model to new customers. It should involve education of the customer and the employees and hope that the business model will make sense.

The hardest it seems to be to replace an existing product with a new product based on disruptive technology. Then on top of the challenges listed above we should add the internal resistance from the obsolete product line.

It is hard to cannibalize your own product, but sometimes it is the only option when the company is facing external disruptors. This is the case where a good portfolio management is needed. The transition from the old to the new product should be done in a controlled way. With careful market segmentation and clear gap between the two products. Still the gap should not be big enough for a competitor to sneak in.

Please let me know if you think there are missing scenarios?

Thank you!