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There is a lot of discussion about how firms can harness breakthrough innovations that support growth, improve profitability and create a competitive advantage.
The uncomfortable truth is the first strategy is usually wrong. Most firms are extremely hesitant to consider breakthrough innovations, which is why it is important to iterate your way to success.
Breakthrough innovation occurs when established knowledge and existing resources and capabilities become obsolete.
There are a number of basic steps that support breakthrough innovations:
- Preparing the groundwork
- Discovering ideas and developing opportunities
- Planning the desired outcome
- Interpret collected insights
- Making it happen
(1) Preparing the groundwork
Preparing to launch a novel product or service, or create a new market requires the firm to:
- Set aside human and financial resources
- Understand your target customer segment and market
- A careful selection of the opportunities with the potential to scale
(2) Discovering ideas and developing opportunities
There are many different ways lots of potential ideas can be generated, including:
- Observing customer pain points
- Analysing customer feedback
- Interviews with potential customers
- Desk-based research (Google Trends, Buzzsumo)
(3) Planning the desired outcome
Before any work is started, it is really important the outcome is clearly defined, including:
- What is the desired goal ~ Pitch document, Business Plan, Marketing & Investment prospectus, Prototype
- How you will measure success ~ # of customer interactions, allocation of resources, positive feedback, social media traction
(4) Interpret collected insights
In the search for meaning, it is important to find themes, patterns and connections. By grouping around general themes, valuable insights can become actionable.
The process of idea creation is subject to considerable biases, not least confirmation, anchoring, bystander effect, conformity, loss aversion etc.
In a corporate setting that is ‘conditioned’ by social norms, even the most simple of processes such as Brainstorming can be subject to significant biases that restrict the output. Even if ‘rules of engagement’ are agreed in advance (criticism of ideas should be abolished, all ideas should be given equal weighting etc.), it can be hard going.
The best approach is to generate large quantities of ideas that are then reviewed and prioritised by a second, independent group of innovators with a track record of success.
(6) Make it happen
Experimental learning and rapid prototype development using Apps such as Invision are great ways to build interactive approaches.
Seeking early, relevant feedback from users (potential customers) is paramount, as is building in time to reflect how the process could be improved.
Whatever approach is adopted, it is paramount the customer is placed at the centre of the innovation process. This includes underserved or unserved customers, those who exist in the periphery.
What should a corporate team do if their idea does not make the shortlist?
- Go back and revisit the parameters to win approval
- Consider building a coalition of supporters
- Frame the innovation in the context of existing products, services or markets
If all else fails, just go ahead and do it.
Darren provides Enterprise Risk Management advisory services to the Insurance and Investment Management sectors. Helping Board and C-level executives address strategic challenges, by delivering solutions that create Enterprise Value and improve business performance.
Darren is an experienced executive with over 20 years’ global experience with multinational companies, including Chief Risk Officer reporting to the Board.
Darren is an Honorary Visiting Fellow of the Digital Leadership Research Centre, Cass Business School where he also holds an Executive MBA. Darren is a Certified Fellow of the Institute of Risk Management (CFIRM) and Chartered Insurance Risk Manager (ACII) of the Chartered Insurance Institute.
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