Companies know they need to innovate in the face of rapid technological change, rising customer expectations, and threats from new market entrants. In a recent survey from Forrester, 88% of global purchase influencers tell us that improving their ability to innovate is a priority — but 91% of purchase influencers executing on their organization’s top priorities expect this initiative to be challenging, if not daunting.
A part of that is the perception of innovation.
While the COVID-19 pandemic has exacerbated the need for companies to be nimble and adaptable, it has also changed the idea of innovation. It is no longer about achieving a big moonshot idea but starting with smaller, near-term initiatives.
Most companies, and people for that matter, have a narrow view of innovation as creating something from scratch or disruptive to shake up the status quo. This idea can instill a fear of innovation. They see it as risky and expensive — that it takes away from long-term goals, can't address short-term needs, and is not a cost priority.
Innovation exists on a continuum with three main points: core innovation, new product innovation and transformational innovation. Your place on that continuum depends on your digital maturity and ability to support those innovation efforts.
Innovation traits: incremental, sustaining, continuous, adaptive
This level of innovation is the most attainable point on the continuum. Core innovation is about improving existing capabilities in existing markets. Those mature in this area have a pretty clear idea of their users’ needs and problems and know what skill domains are required to solve them.
From a resource investment standpoint, strategic road mapping, traditional R&D labs, and acquisitions to bring new resources and skill sets into the organization are usually effective in achieving this level of innovation.
Core innovation in action:
By focusing on UX, learn how a pharmaceutical supply company was able to update their e-commerce platform to grow their annual revenue by 22% in six months.
Innovation traits: adjacent, disruptive
New product innovation is the most common (or public) type of innovation. Developing new products allows a company to draw on existing capabilities for new uses. They require fresh, proprietary insight into customer needs, demand trends, market structure, competitive dynamics, technology trends, and other market variables. While it can involve changes in business models or some level of disruption, that isn’t a requirement or necessarily an expectation.
New product innovation in action:
Learn how PING evolved their digital presence to create a seamless customer experience.
Innovation traits: radical, breakthrough
This is how most of us view innovation. It happens when the market becomes more competitive, technological shifts occur, or other changes in the marketplace and consumer needs force you to innovate not just your products but your business model as well. While the outcomes of transformational innovation can show monumental returns, there’s typically higher scope and greater risk involved.
Transformational innovation in action:
Real Sportscards created Uncommon, a first-of-its-kind platform for virtual events and e-commerce platform for sports trading cards.
As you think about where your organization lives on the continuum, you might think that you’re not mature enough digitally to invest in innovation. Remember that this is a spectrum, and you don’t have to focus your innovation efforts or excel in certain areas over others. Innovation is not all or nothing. You can (and should) strategically invest across the entire continuum.
Once you’ve identified where you exist on the innovation continuum, you’re able to triage the common innovation barriers and how best to combat them to enable growth.
Do upfront goal-setting before moving forward with an innovation initiative.
When your team can rally around achieving specific goals early on, it makes it easier to test and prioritize ideas if they’re working towards something specific. The decision to move forward or scrap an idea is easier if you can determine whether or not it accomplishes those goals.
Talking to your users frequently and regularly.
Your users will always be the best measure of your innovation efforts. To get to the point of innovation, you need to figure out what works and what doesn’t. Something to remember: wherever there’s frustration for your user, there’s an opportunity.
Structure your teams to be able to innovate.
When setting up your innovation teams, there shouldn’t be a hierarchical chain of command; rather, a team to support true collaboration – and collaboration happens only when product, design and engineering work out solutions together, fueled by user insights.
Define your innovation charter:
Your vision, goal, objectives and tactics center around where your organization exists on the innovation continuum (core, new product, transformational)
Strive for cross-functional, organization-wide innovation teams:
The best ideas come from diverse teams and should include everyone’s ideas.
Balance innovation efforts across the innovation continuum:
Allow different initiatives to take shape over time and try not to focus on innovation initiatives that drive short-term ROI. Decide how much to invest in and effectively manage team expectations.
Ensure action after ideation:
What you really want to avoid is exploring and refining ideas but never acting on them. Assign an executive sponsor for the innovation initiative to allow for healthy debates, improvements, and the possibility of the idea becoming a reality. From ideation, flow into creating an execution roadmap to for practical next steps to bring that idea to life. This process is hard work, and sometimes you’ll have to go back to the drawing board, but it’s a necessary part of innovation.