A Framework for Managing (and Predicting) Successful Innovation
Through my involvement leading innovation directly at companies that I’ve founded, being part of large companies’ innovation successes (and failures), and studying innovation both in an academic and real-world setting, I have developed a framework for what it takes to drive successful innovation. The framework can be used internally by your business as a check of whether you are on the right path, or externally for prospective investors to help determine who the winners and losers might be in a new emerging field.
I have found that successful innovation depends on three key factors, each of which have a great deal of detail that I will get to in future posts. But at the highest level, success comes down to having:
- A visionary idea that can disrupt current ways of operating with orders of magnitude of improvement in some area of importance to the target market (often this happens when an individual or team identifies an opportunity at the intersection of disciplines).
- An integrated business strategy to achieve the vision that combines product strategy, go-to-market strategy and capital strategy (think of it like playing a 3D chess match — where a “first mover” can be winning on, say, product design and early sales, but get blind-sided by a company playing a completely different game on funding strategy and gaining access significantly greater resources; or conversely where an incumbent player with much greater resources and market access gets blind-sided by a nimble startup that does a better job focusing on the consumer in its product implementation).
- Inspiring leadership to drive execution. This includes articulating a meaningful vision for the team to rally behind; defining the strategies to achieve it; aligning and motivating the internal team and external stakeholders behind the vision; designing the organization to achieve results; developing scorecards that focus in on the key indicators of success; aligning incentives against them, monitoring them, and taking corrective action as needed to stay on track.
Each of these three legs of the stool has a lot of details behind it, and will be further explained in future posts. But whether you’re the leader in your industry or the challenger, it’s important to note that a time of disruptive innovation the race goes to the quickest not the biggest — meaning the quickest to execute on the integration of all aspects of the framework.
There’s no reason the established company should not win — it has the resources and the market access, among its many advantages. But given an opening, a fast moving David can beat a slow-moving Goliath, particularly if the Goliath is internally focused and over-confident in its knowledge of customers’ wants.
Hear a 10-minute interview with more detail on this framework.