A Visual Map for Strategic Risk and Innovation Terminology

Published in

The Startup

7 min readJan 11, 2018

There has been an increased interest of late in the subject of innovation as a range of lower-cost enabling technologies and approaches have emerged which make it easier than ever to innovate. At the same time, the risk of disruption of established organisations and markets has increased.

As a result, many of the terms coined in disciplines such as start-up innovation, design thinking, agile development, lean startup, and strategic risk management have begun to permeate into the mainstream business lexicon.

Terms such as disruption, pivots, MVP’s, black swans, and blue oceans are all shorthand descriptions for a more complex set of factors, actors, and playbooks which provide useful insights for those engaged in the practice of strategic risk and innovation.

However, these terms can easily be misunderstood or used out of context by those who are less familiar with their true meaning. This can be a problem for organisations which are seeking to raise their capability for managing strategic risk and innovation since the terms are useful when used in the right context.

Education and Context

Part of the problem with the misuse of such terms is often just a lack of knowledge of the true definition and origin of each term, which can be addressed through education or training.

However, even with an improved knowledge of the proper meaning of the terms, another problem often remains which is the lack of a shared common understanding of the situational context within which the terms are used.

In this article, I provide some examples of a diagram which I have developed that can represent a useful situational context to support the use of these terms. When strategic risk and innovation terms are represented over this diagram I have found that it usually leads to more insightful strategic thinking conversations.

The Markets Map & Strategic Change Map

The diagram that I will share with you is a simplified version of a more detailed diagram that I have developed called the Strategic Change Map which I use to help organisations navigate strategic change.

I originally developed the Strategic Change Map to represent the insights from a great many strategy, innovation, risk, and execution tools that have been developed by other authors, academics and consulting firms over the last 50+ years.

Many of the design elements incorporated in my diagrams will, therefore, be familiar to those of you who have used strategy and innovation tools and frameworks in the past. However, in this article, I shall use a simpler version of the Strategic Change Map which I call the Markets Map.

The Markets Map is used to represent the various markets which you may need to consider when discussing strategic risk and innovation. It allows you to overlay a range of information regarding the various other market players and the strategies that they may employ which may concern you. It also allows you to map out your own strategic options.

The objective of this article is to provide you with an introduction to a customizable Markets Map template which, when combined with commonly used strategic risk and innovation terms, can help individuals and groups better discuss a full range of strategic risk and innovation topics.

Markets Map Template

Market Map Template Design Elements

The Markets Map Template is made up of two axis — a vertical axis for time, and a horizontal axis which represents the degree of change from the current core market that your business is engaged in.

Horizontal Axis: Degree of Change

In order to represent both strategic risk and innovation scenarios, the horizontal axis is divided down the middle between opportunities on the right-hand side and threats on the left. Allowing for both opportunities and threats on the one diagram ensures that you create a more balanced view of both strategic risks and innovation situations facing your organisation.

The two-sided design also makes it easier to distinguish between offensive and defensive strategies. Often people assume that innovation only refers to new growth or productivity improvement initiatives, but increasingly organisations may need to divide their innovation resources to both defend their current core market whilst also developing new markets.

I have further subdivided the horizontal axis into sections to represent your core market, adjacent markets and more distant markets which may influence your core market or organisation over time.

The reason for adding in adjacent and distant markets is to really stretch your thinking as to where new opportunities or threats may lie. Many organisations still believe that disruption will only come from within their current market, which leaves them open to being blindsided by changes from outside of their current market**.

Between each of the core, adjacent, and distant market sections I have added in blue triangles to represent new “blue ocean” markets which may be developed by your organisation or others. The term blue ocean comes from the book Blue Ocean Strategy which explains how organisations can create entirely new markets, often by combining concepts from adjacent markets.

If there is more than one market in each of the sections that you wish to represent, just divide the section into vertical sub-sections to represent each individual market that you wish to show.

Finally, on the right-hand side of the central current core business rectangle, I have added a green triangle to represent any new organic growth which will expand the current core business.

Vertical Axis: Time

The vertical axis represents time, which as others have observed, is not always included as a primary consideration in many classical strategy tools. However, with the increased rate of change that we see in many industries today, I believe that time is a critical factor which needs to be kept front-of-mind.

I usually find it useful to segment the time axis into three horizons over a 10-year period, with the first horizon / short-term period representing the current detailed strategic planning horizon which is often around 3 years for many organisations.

If your organisation uses longer or shorter planning periods, then just calibrate the axis to suit your own circumstances, but always make the total time period longer than your planning period to stretch your thinking.

Overlaying strategic risk and innovation terminology

The diagram below shows how a range of strategic risk and innovation terms can be overlaid onto the Markets Map template.

The resulting diagram then provides greater situational context for the use of the terms since it makes it clearer which players are involved, from which markets, and the strategies that they are using.

Application in Practice

In workshop settings, I either sketch out the Markets Map on a whiteboard or blow up the diagram onto an A0 poster to draw over. As with most “canvas” type models, you can of course also cover the diagram with different coloured Post-It notes.

Where useful, I illustrate the diagram and notes with icons to represent the different terms and the factors that they represent. The icons that I have used in the diagram above for the various terms are just ones that came to mind based on my own experience. Feel free to use different icons that best reflect the meaning of the terms that you use within the context of your own organisation.

The holistic nature of the Markets Map may also highlight some of the gaps in your strategic risk and innovation vocabulary. I have started to add my own new terms below for some of the gaps that I had, such as Black Hole Disruptors* and Market Killing Disruptors*.

I would be interested in hearing your thoughts on what other terms you find useful when discussing strategic risk and innovation in the comments section below.

Conclusion

The main purpose of this article is to share with you the Markets Map diagram which I believe provides a useful situational context when using strategic risk and innovation terms and results in more insightful conversations.

The Markets Map shared in this article can be used for simple organisations, but it can also be expanded to represent more complex organisations.

References

* Black Hole Disruptors — represent the major technology platform businesses such as Google, Amazon, Facebook, Tencent, Alibaba etc which you know are out there, and if they decide to enter your market universe will likely swallow you up…

*Market Killing Disruptors give a name to organisations who are developing new value propositions within adjacent markets or new markets which represent an existential threat to your current core market or individual organisation. Some market killing disruptors intentionally target your market, whereas others are just seeking to solve the customer’s needs in new ways, and your organisation and market are just made redundant by their new solutions.

** Innosight 2017 Strategic Readiness and Transformation Survey

Other inspirational sources:

Many of the terms that I have used I have come across in reading a range of strategy and innovation books and articles, some of which I have listed below.

Clayton Christensen: The Innovators Dilemma. ASIN: B00E257S86
Innosight / Scott Anthony et al. Dual Transformation. ASIN: B01M7OXGYT
Geoffery A Moore / Everet Rogers: Various books/articles on growth curves & diffusion of innovation.
Vijay Govindarajan & Chris Trimble. Ten rules for strategic innovators. ASIN: B004OEIQ18
Nicholas Taleb. The Black Swan: ASIN: B002RI99IM / Anti Fragile: ASIN: B009K6DKTS
Renée Mauborgne and W. Chan Kim. Blue Ocean Strategy: ASIN: B00O4CRR7Y