In my last post I discussed four dimensions of innovation. Innovation is a very broad term, and impasses in understanding often result when people are using similar terms to describe very different things. In summary:

Innovation for Optimization - Creating and developing new ways to manufacture and deliver existing offerings to the market.

Innovation for Improvement - Improving the existing offering as it is perceived by the market.

Innovation for Invention - Developing new offerings that will deliver known benefits in ways that are currently unknown, but ultimately more relevant to the market.

Innovation for Disruption - Developing an offering that changes the competitive landscape of the market.

In distinguishing between different dimensions of innovation, we can begin to see that working to achieve the goals of each type of innovation requires very different types of problem-posing and problem-solving skills.  This also results in the need to make sure the innovation process itself is conducive to the work that needs to be done.  Let's think about how the process may differ to best enable each Dimension.

If we think about the first two Dimensions - Optimization and Improvement - the similarity is that the criteria for a successful is already defined, and the benchmarks are well established.  With Optimization, the goal is to deliver the same offering that has always been delivered.  Success can be easily measured.  With Improvement, the offering is different from the existing offering, but the existing offering is used in comparison and as a benchmark.  Since both of these Dimensions can be compared to what the company is currently doing, the existing development process is probably fine for managing the work.  Yes, issues arise when teams try to introduce levels of variation in Improvement projects, but most often, the process itself will dictate how far the variation can stray from the norm. 

In most companies, Innovation for Improvement is about as far as they can go in developing something new.  That's because that's the limit of most existing development processes.  If they can even attempt the second two Dimensions - Invention and Disruption - they struggle with them at best.  Think of the large corporations that spend lots of money on blue-sky R&D, open-ended market research, and open solicitation of new ideas that have a difficult time getting a new invention or disruption out the door.  That's because the existing development processes are not equiped to handle such a great variation on the theme.  Different processes are necessary to achieve the goals of the Invention and Disruption Dimensions.

So what does a process for Innovation for Invention and Disruption look like?  While the details may vary, there are some basic components that are necessary:

The main goal of this process is to define the criteria for a successful offering.  Just as Innovation for Optimization and Improvement start with a benchmark, it is equally necessary to know how to tell if we've done a good job.  This criteria is more fundamental than a benchmark, and is often described in terms of market motivation as expressed as an opportunity that informs all the other business disciplines. (Notice that it is not a fully formed solution. It needs to enable multiple solutions, and transcend specific technology solutions.  It should guide the development of new technology, not be a result of it.) Once this is in place, the other components follow:

It is not random.  Just because existing benchmarks are not relevant, that does not give license to just make things up.  This does not mean that everything needs to be linear, quite the contrary.  Non-linear and random are not always related.  If you've done a good job of creating the success criteria this will become obvious to the right people.  Which leads us to people:

The people need to have strong problem-posing abilities.  Too many random solutions live past their useful life because of a lack of problem-posing abilities in an organization.  In this process we must first pose the right problem, the solution to which will satisfy the success criteria.  This will then set the stage for any problem-solving activities.

The team should be multi-disciplinary.  Although people must first be selected for problem-posing abilities, they should also come from different disciplines.  This will help the team to avoid blind-spots, as well as ensure that the opportunity is translated accurately to the rest of the organization.

It must feed a development process.  Development processes are good at delivering an offering to the market.  The opportunity must be defined in such a way that the following development processes is informed, but not spoon-fed.  Therefore it is good to have some crossover people from the development team involved in the innovation process, as well as have some innovation team members move into the beginning of the development process.  Think of a baton hand-off in a relay.  It's not an abrupt hand-off at one point in time, but a gradual ramping up and down of the team members doing the transition.

These are the most important aspects, and I'm sure more points could be added.  But the important point is that this process is different from the development process: It is comprised of people with different skills, has different goals and outcomes, and should not be force-fit into an existing development process.  When people at your company talk about innovation, stop and think about defining what type of innovation is really needed, and then make sure the right process is being used to realistically enable it, and outsource it if you need to. 

A couple of months ago I was discussing models that help to think about focusing innovation efforts with Hutch Carpenter.  I said I would post one that I use, and Ooops!  I forgot to do that.  So here's a model that I often use when discussing the type of innovation capability a client wants to build.  My working definition of innovation is "doing something new that adds value to the business."  It's not just about making new products or technology.  For that reason, the people, processes and skills necessary to innovate can vary greatly, and we need to be very clear about what is necessary for each specific situation.

This model is based on two points that drive the approach to the innovation effort.  First, the degree to which the lines in each box are orderly or chaotic represents how well the end solution can be defined before the project starts.  Second, success criteria is determined differently at each innovation dimension. Let's look at how they differ.

Dimension 1 - I call this Innovation for Optimization.  The product or service that the company develops will stay the same, and innovation will focus on new ways to manufacture and deliver the offering to the market.  New technologies, processes, and organizational structures may be introduced.  Clear benchmarks for success exist, and the results can be tangibly measured with existing metrics.  The consumer will not notice a difference in the product or service, but may share in the benefits of the innovation through cost savings and ease of access to the product or service.  An example would be a new manufacturing technology that reduces production costs by 50%.

Dimension 2 - I call this Innovation for Improvement.  The goal is to improve the existing offerings themselves.  It may be that the product becomes easier to use, or new technologies will enable enhanced functionality.  In this dimension, success criteria may not exist already, and can be derived by learning directly from the market. It may involve learning what pain points the consumer has with existing products, or uncovering new uses that an upgrade can deliver.  An example would be the addition of calcium to an orange juice product.

Dimension 3 - I call this Innovation for Invention.  The goal is to develop new products and services that will provide the same benefits as existing options, but in new and better ways.  In this dimension, success criteria for the specific product attributes does not exist, and consumers may not be able to articulate the potential solutions. However, the benefits are well recognized. An example would be new products that increase the ease of eating yogurt on the go.  A yogurt company may develop new technologies or formulations to enable drinkable yogurt or yogurt in a tube. New internal benchmarks for manufacturing and cost structures may need to be created, as the company is making different products.

Dimension 4 - I call this Innovation for Disruption.  The result of this type of innovation is that it fundamentally changes the competitive landscape.  Very often - but not always, this type of innovation focuses more on changing existing business models than on changing the products themselves.  We can see this type of innovation playing out in the publishing and other media industries, as existing business models are becoming irrelevant.  New products and technologies play a part, but they are enablers that allow consumers to access media more easily and inexpensively than ever before.  The sources of power are shifting in the market, and existing benchmarks become irrelevant. Consumer research is very important here, but as a source of information about what is valued, not as a source of solutions as in dimension 2.

Since my work involves ensuring that new offerings are relevant to the market, the focus is from the perspective of how the consumer (or other end-user) will perceive the differences.  It also sets the stage for how directly the consumer can give input to what the end result will be, and guides the type of work we need to do.  From my experience, most companies are very good at Optimization, and they can often stretch to create innovative improvements.  This work can be handled in existing development processes.  In future posts, I will describe the fundamental difference in the work necessary to innovate in the 3rd and 4th dimensions, as this is where the existing development processes typically break down.