Innovation has become the corporate Holy Grail. The pressure to create new, better, different is fierce and unrelenting. But for most companies, it remains as elusive as the grail, always just out of reach. Innovation is, as Adam Richardson argues
Let's talk baseball. At the turn of the 20th century, it wasn't unusual to see batting averages that soared past .400. Today's best hitters don't come close, even though they're technically better. Why? Evolutionary biologist Steven J. Gould concluded that "there has been an overall improvement in play that has narrowed the gap between the very best and the average players." In other words, the best are just barely better than everyone else.
Businesses are in the same ballpark, so to speak. Previously, innately innovative companies - like natural athletes - had a clear competitive advantage. They could hit .400. But as Richardson writes, "the superiority of innovation-gifted companies forces the competition to work harder." Therefore, the gap between the best and the average is closing.
At the same time that the playing field is levelling, "the scope and complexity of problems businesses must solve have changed." As a result, up to 60% of new product initiatives are cancelled before they come to market; of the 40% that make it, 40% (or more) fail. Richardson created the Innovation X framework "to tackle this complexity head-on" and to help companies ensure that their innovation efforts are more consistently successful.
To regain the competitive advantage, companies have to get a grip on the innovation challenges they're now facing. X-problems arise from the collision of the following factors:
Richardson purposely uses X to describe these problems because X is extreme, as is the risk and complexity businesses face. X is mysterious; it represents a crossroads - and most importantly, it signifies opportunity. To realize this opportunity, businesses first must contend with X-problems, which share the following characteristics.
What should businesses do when confronted with X-problems? Clarify the problem and develop constructive ways to solve it. Easy as that! Well, it's not, but using the Innovation X framework
Toyota's core insight, for example, led the automaker to create the hybrid Prius. It wasn't overly comfortable. It wasn't a high-performance machine. And it had a relatively hefty price tag. So why would customers pay more for a car like that? Because it was environmentally responsible; it was a symbol of awareness, and of status. This core insight gave Toyota a significant head start in this emerging market. To arrive at a core insight, Richardson suggests four methods:
Immersion. Attack the X-problem from all angles. Richardson calls this "multi-vector research," and it incorporates customers, competitors, complementors, comparatives, brand, organizational toolbox, technology, retail, and trends. Use a diverse team to ensure fresh perspectives, and research all vectors simultaneously.
Richardson provides clear direction for research. For the organizational toolbox vector, for instance, he recommends examining culture, intellectual property, values, goals, and tolerance for risk and change. Companies with a clear vision and self of identity tend to fare better when confronting X-problems.
Convergence. After fully immersing themselves in the problem, companies can turn towards convergence, or the integration of "multiple products and customer touch points in order to provide functionality, benefits, and a customer experience that would be impossible in a standalone product." Amazon's Kindle (which integrates the normal Amazon web experience, the ability to purchase books anywhere with the device, and subscription-less ease of use) is a prime example.
The goal of convergence is to create a unique offering in the market - one that delivers a complete customer experience. To do this, brands need to understand and control the ecosystem (collection of products and technologies that create the offering's functionality) and the touch points (where they and their customers intersect). And if done well, convergence allows companies to respond more agilely to customer needs and integrate multiple components into a coherent whole.
Divergence. This is where expansion comes into play. Divergence is:
To diverge, companies need to know where they're coming from (this is where research on organization toolboxes, products, ecosystem and complementors, and customer needs comes in handy).
Adaption. How will companies continue to evolve and thrive in a dynamic environment? They need the ability to:
Richardson provides clear step-by-step instruction and insight into each of these areas. For companies that want - and need - to fix innovation, Innovation X is a useful guide. X-problems underscore the complex nature of the business world; leaders must develop dynamic solutions to regain a competitive edge. Picking up Richardson's book is a good place to start.
