Due to the reality that increasing levels of reliability and efficiency are no longer the guarantee of competitive advantage they once were, the ability to develop breakthrough products and services has become the holy grail of innovation. However, the fact that a company is highly innovative in all other aspects of their business is no guarantee that they will be able to successful at developing breakthrough products and services.
Could it be that a different organizational barrier exists that is specific to breakthrough innovation?
Examining the purpose of innovation and how it relates to the purpose of a business enterprise brings a different issue to light. While an individual or small group of people are able to create a breakthrough product or service idea, a business enterprise is usually necessary to produce the offering at scale, reliably, and efficiently. If we think about what has historically caused the creation of new companies or product categories, it has been breakthrough innovation.
If we then think about what has historically made the companies themselves successful, with a few obvious exceptions, breakthrough innovation isn’t at the top of the list. Sure, the company could have been created because of a breakthrough innovation, but once formed most companies owe their success to their ability to optimize their processes.
We can see then, that the purpose of innovation is to identify opportunities to create competitive advantage, and the purpose of a business enterprise is to bring products and services to market reliably and efficiently. When these two purposes are aligned, it is easier for companies to innovate successfully.
For example, incremental innovation initiatives typically consist of improvements to what is currently being produced. The new offering can be clearly defined, and benchmarks for success already exist. The same is true for process innovation, regardless of how radical the new process may be. In these cases, the purpose of innovation is aligned with the purpose of the company; it helps the company to do a better job at what it is already doing.
Identifying an opportunity that may be unrelated to the current business is counter to the very purpose of a company’s existence
From this perspective, we can see why companies find themselves paralyzed when faced with the prospect of developing breakthrough products or services. Identifying an opportunity that may be unrelated to the current business is counter to the very purpose of a company’s existence, presenting unique challenges that existing development processes are not prepared to meet. In order to develop breakthrough products and services without disrupting current development processes, business leaders may need to take steps to ensure that both purposes can be realized.
Companies can define their business goals in many ways. For example, an automobile manufacturer could decide that their goal is to become the largest automobile manufacturer in the world. Or they could decide that they want to be the market leader in providing ground transportation solutions. Each business goal frames a different set of acceptable business opportunities that the company would consider. Companies that define themselves in terms of benefits will be better able to recognize viable breakthrough products and services when they are presented.
Identifying innovation opportunities and developing products are two different types of work, requiring different thought processes and skill sets. Development teams are excellent at developing new products and improving existing products. A different, dedicated team and process are in a better position to identify new opportunities since they function independently of existing business processes.
Identifying innovation opportunities and developing products are two different types of work
Consumer preference tests will usually give an inaccurate assessment of the viability of a breakthrough product because they require comparisons to existing benchmarks which are not relevant to a truly breakthrough product or service. However, the validity and market viability of an opportunity can and should be assessed with contextual evaluation methods. Companies that use different metrics to assess breakthrough and incremental opportunities will be better able to recognize the value of breakthroughs.
If you have decided that it is important that your company develop breakthrough products and services, and are experiencing roadblocks, take a look at whether this activity is aligned with your company’s purpose. Rather than trying to turn your development team into something it is not, taking steps to align the purpose of innovation with the purpose of your overall business may yield better results.
Ellen Di Resta is the founder of Synaptics Group, an advisory and research consultancy that helps clients to develop market-relevant innovation. She has held leadership positions in strategic innovation and new product development at Design Continuum and CR Bard. Her work has spanned global markets, and her clients have ranged from large multinationals such as Procter and Gamble and Boston Scientific, to small start-ups.
Ellen is also a frequent guest lecturer on innovation topics at Boston University, and she is spearheading new research to codify personnel selection for innovation.
Ellen Di Resta has a BS in engineering from Rochester Institute of Technology, an MS in design from the University of North Texas, and an MBA from Boston University where her thesis focused on organizational factors to foster innovation within corporations. Ellen has also led teams that have been recognized with the IDEA award for design excellence, the Bottom Line Design award, and the AG Lafley design award for realizing business goals.
She can be reached at [email protected]