The power of the concept behind every successful innovation is evident from the success of Apple. Steve Jobs did not just create sleek devices but conceptualized an ecosystem that included iOS, carrier and music label partnerships, iTunes, and App Store. The expanding ecosystem is the reason behind the success of Apple. Successful innovators focus on conceptualizing their idea to succeed in the marketplace.
When conceptualizing an idea, it is essential to ask questions like what is the problem that the idea solves, who is the consumer for the idea, does the idea solve the consumer’s problems and how will the solution be delivered to the consumer. It is very important to direct the thinking to specific dimensions and search answers to certain questions that help in evolving the idea from the initial thought through the various stages of innovation.
The availability of new technologies provides you with different options to conceptualize and build your idea. Success depends on the application of the idea to solve a problem and the market environment that you choose to play. It is also very important to relate to the strategic objectives of your organization. Apple’s success with its products like iPod, iPhone and iPad are mainly contributed by the strategic focus on convergence of technologies and on media and entertainment. Apple chose to position its ideas in a specific market place aligned to their strategic intent. Innovators should explore the broad opportunities that are available to succeed with their idea. They should study the customer need, market environment, competition, business strategy of the enterprise and the eco-system consisting of partners and suppliers in the market for the idea. It is essential to design their idea around a business like an entrepreneur. The two views that help the innovator to think along this direction are the ‘Business model for the idea’ and the ‘business strategy of the enterprise’.
A study of literature on the importance of business model for successful innovation throws many interesting findings. According to Henry Chesbrough and Rosenbloom, established companies as well as startups take technology to market through a venture shaped by a business model, whether explicitly considered or implicitly embodied in the act of innovation¹. In some instances, an innovation can successfully employ a business model already familiar to the firm and in other cases, managers must expand their perspectives to find the right business model. John Selly Brown, states that a successful disruptive innovation often demands an innovative business model that is enabled by technological innovation – Rapid business model prototyping is as critically important as is technological innovation².
It is essential for an innovator to make the right choices for the business model of an idea for it to be successful. The innovator must have a good understanding of the components of the business model to conceptualize the idea. The framework defined in this article has important dimensions to help the innovator in this direction.
Innovators need to have a clear understanding of the strategic objectives of the enterprise and relate them to conceptualize their idea. The idea needs to align to the enterprise strategies and should differentiate with other similar competitive offerings. The two important aspects of the business strategy view for the innovator is the competitive positioning for the idea and how the core competencies of the enterprise facilitate the operating activities critical to developing the idea and sustaining it in the market place.
According to Michael Porter, strategy is the creation of a unique and valuable position, involving a different set of activities. A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or do both³. Innovators need to articulate a well defined competitive position for their idea to succeed. For example, Nintendo designed its gaming console with a clear understanding of its competitive position. Nintendo was very successful with Wii gaming console because of its focused strategy on a wider segment of customers than the traditional gamers and this helped in a market dominated by Sony and Microsoft. For innovators, it is very important to ask what is the positioning of the idea – is it based on cost, differentiation or focused strategy.
It is also important to think about target customers and their needs to develop competitive positions. Is bottom of the pyramid the target segment? Tata Nano for example is successfully positioned based on the bottom of the pyramid strategy. Innovators must understand that the competitive position they take for their idea requires a strong alignment to the operating activities of their organization and its competitive strategy without which the idea cannot evolve successfully.
Another important contributing factor to competitive advantage is the core competencies of your organization. C.K.Prahalad and Gary Hamel⁴ define core competencies as the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies. They quote the example of Sony and Philips. For long, the successful innovations of Sony can be associated with the competency to ‘miniaturize’ and for Philips it is the technical expertise in optical media. Innovators should design their idea leveraging the core competencies of their enterprise. Apple’s competency on experience design has been a critical success factor for many of their innovations.
Conceptualizing the idea with a clear view of its competitive positioning, target market and tying it to the core competencies of the organization are critical factors in the success of an innovation.
The two views of the business model for the idea and the business strategy of the enterprise combine to give five important dimensions that an innovator can use to think through and conceptualize the idea.
Innovators who have a good understanding of the two perspectives – business model and business strategy will gain immensely in discovering unique positions for their ideas. At times, the original idea contributor may not have all the required skill sets to conceptualize the idea. It is very important in such situations to co-create their idea with other experts. A team of innovators with diverse skill sets in technology and business aspects will help in conceptualizing the idea. Also, in organizations that promote collaboration, enthusiasts and innovation community leaders should be on the lookout for good ideas and help the innovators to conceptualize their ideas.
The dimensions defined in the framework will be very useful to conceptualize new product ideas and evolve them. The innovator needs to continuously be in the lookout for strengthening the dimensions while evolving the idea. The key to success is to take the idea forward by working on the dimensions that are strong. The dimensions can be further elaborated with questions that help innovators to conceptualize their idea.
By Venkatakrishnan Balasubramanian
Venkatakrishnan is a Research Analyst with Infosys Labs, the Technology, Research and Innovation arm of Infosys. His interests include innovation management practices, co-creation, and innovation management platforms and tools. He can be reached by email. The views expressed in this article are personal and not those of the company.