In PWC’s 14th Annual Survey of over 1,200 CEOs, business leaders around the world were asked to name their #1 factor to sustainable business growth.
We know innovation is critical to staying competitive. And we know that the directive for innovation has to come from the top, or it just won’t happen.
So, where exactly should you look to innovate?
Back in 1930, the Austrian economist Joseph Schumpeter released a theory for economic development, in which he outlined 5 ways innovation can show up:
It’s impressive that these 5 points are still considered core innovation areas!
However since Mr. Schumpeter’s time, there’s been another factor overlaid to the business arena (which affects all of the above): technological innovation.
Tech has shrunk the world, made things faster, and opened up new opportunities. Market boundaries have dissolved both geographically and operationally.
In this environment, every new opportunity is also a threat to the incumbent.
Take retail for example:
Once local clothes boutiques competed against other stores on Main St. Now they’re up against the likes of Amazon, Ebay and sellers from all over the world.
Today we need to approach innovation not just to take market share away from a handful of competitors, but instead to make the competition irrelevant by finding uncontested market space.
I’d like to share new-school 2 tools to help you and your team think about strategic innovation.
The 2005 book Blue Ocean Strategy (W. Chan Kim and R Mauborgne), sets the goal: not out-perform competitors in an existing industry, but to create new market space (a Blue Ocean) which makes the competition irrelevant.
The suggested approach to innovation follows this 4-question framework to find “Blue Oceans”:
Using these guidelines, the idea is to create a strategy to capture a large amount of non-customers across a range of market tiers:
Born from the world of lean start-ups, Strategyzer’s Business Model Canvas is a one-page business strategy planning tool.
Working in conjunction with the framework of the Blue Ocean strategy, the Business Model Canvas can help you fill out the Who and How of your strategy at a high level.
Here’s what a Business Model Canvas looks like:
Now let’s take a look at an example to bring these ideas to life.
This is a powerful example of a strategy cutting through the existing market definitions to create a whole new Blue Ocean.
Nintendo developed the motion-controlled Wii, which was fun and intuitive to play, opening up their offering to a whole new group of gamers:
This market-opening strategy can be captured, explained and further-developed upon by using the Business Model Canvas planning tool:
Use these tools to start thinking about your own innovation game plan.
The perfect place to get started is by running your own Innovation Workshop. Download my Innovation Workshop Plan for a step-by-step plan that walks you through designing and executing an Innovation Workshop which delivers results.
Learn more about the Blue Ocean strategy here. And the Business Model Canvas here.
A simple 6-step guide to creating your own Innovation Workshop and delivering actionable plans for innovation in your business:
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If you have questions on this topic or any others, feel free to reach me by email or set up a free one-on-one consultation session, or drop me a comment below.
Thanks for sharing!