Innovation is not limited to invention. To successfully and consistently innovate, you need a broader portfolio of strategies, an eye on invention included. As with investing, diversification can raise the value and impact of your company’s overall innovation effort, maximizing your ROI.
The following strategies might sound familiar — maybe you’re leading one or more of these efforts in some form. Even so, this section will guide an evaluation of each strategy, and help you better understand how they can cross-pollinate each other.
A constant effort to speed-innovate within your current lines of business.
Most companies have R&D teams. Rapid Evolution goes a step beyond that to find ways your current products or other assets can leap forward, not merely hold their own or graduate slowly through incremental year-to-year improvements.
Asking employees to focus on Rapid Evolution is its own unique work. Dedicated resources are best, especially for constant, long-term output. The ability to quickly test new ideas will help keep momentum strong, and ensure teams can capitalize on windows of opportunity.
Prototyping is one way of pushing new ideas to sink or swim, then freeing up resources for continued exploration. As a real-world example of prototyping, Mars Petcare was considering how pet food sampling could work in the digital space. Our Lab team generated over 325 ideas in 2 weeks, testing simulated experiences of the most viable few. This allowed Mars to quickly understand which methods were resonant, and which fell flat, allowing their team to execute and move on.
Rapid Evolution looks beyond solidifying next year’s new and improved version of your current product or service and takes on the challenge of answering “what if” — quickly and with certainty — when new, divergent opportunities are uncovered. Prototyping is your friend, and key to keeping Rapid Evolution efforts rolling along smoothly.
Purchasing a strategically-necessary company or technology that would be cost prohibitive for your company to build from the ground up.
Acquisitions rarely materialize into the boons we envision at the outset. According to a study by KPMG, a shocking 83% of acquisitions fail to positively impact shareholder returns.
Buying another company is sexy, earns your company some quick internal and external buzz and can temporarily satisfy action-hungry board members. But the cost of the acquisition is not the cost of innovation.
Using Verizon as an example, they acquired Hum Technologies, a telematics hardware and app service that connects to your car’s OBD2 sensor and lets you know what’s going on behind your check-engine light. With this acquisition alone, Verizon owned miles and miles of data. And in order to keep collecting data — therefore adding long-term value to the acquisition — they had to find new ways the app could deliver value to their customers beyond interpreting occasional check-engine alerts. Right away, they invested in testing the market viability of new key features.
On the flipside, while working with a major CPG retail brand, we recognized a Disruptor’s Gap in the direct-to-consumer space. Many disruptors in their category were already circumventing traditional retail processes, but few own the manufacturing and distribution assets this brand does, making it perfectly poised to dive right into the direct-to-consumer marketplace. Acquiring a disruptor made zero sense — it would only mean duplicating assets. More importantly, they needed to aim what they’d already built at disrupting themselves. That was a clear path to becoming newly competitive with direct-to-consumer retailers like Amazon and smaller disruptors too.
Under perfect conditions an acquisition can help to ensure true innovation for your company. If your company is looking to expand its market reach by getting smart in areas outside of your basic offerings — and fast — in order to avoid disruption, acquisition can take you from zero to 100 mph, helping you leapfrog ahead of those working to build the same extensions from scratch. But first, it’s always worth taking a fresh look at your owned assets to make sure the potential for innovation isn’t hiding in plain sight.
Creating something from nothing, often using your existing assets as a foundation.
An idea is not an invention. An idea is only the beginning.
Again, there’s a process between the idea and the invention. Rapid prototyping and consumer validation especially, core components of true innovation practices, can keep companies from pursuing inventions that might not match up with market need, consumer desire, timing or budget constraints.
While ideas we love can make it tempting to skip process, and skip prototyping, exercising patience and the proper steps will actually create success faster. By working through a mapped out process, including the integrated perspective of an interdisciplinary team, strategy and ideation, prototyping and consumer validation, our experience is that your company can invent something new in seven weeks.
It’s always worth keeping in mind that introducing something entirely new means giving other brands a roadmap to compete. Yeti is losing its share of the premium cooler market to knockoff brands like RTIC and Orca; Snapchat’s IPO was recently threatened by Instagram’s rollout of “stories”, a carbon copy of Snapchat’s hallmark feature. All the more reason to broaden your innovation portfolio and keep every cylinder well-oiled and humming.
Focused programs on any or all three strategies — Rapid Evolution, Acquisition, and Invention — on a scale your company can properly support means you’ll have a powerful innovation engine running at all times. And if you can only focus on one to start, that’s still a step in the right direction.
All three innovation strategies can feed off of and fuel one another. An acquisition could spur a new invention, for example. Rapid Evolution should be an ongoing effort and can therefore draw from or frame up the need for an invention or acquisition.