There have been many brilliant innovations in history that went nowhere. Many brought fame and fortune to later adopters of these ideas, some who lived much later and are now credited with introducing these innovations to the world. This distinguished list of ideas whose time had not yet come could include movable-type printing. Inaccurately attributed to Gutenberg in 1440, this was actually invented in 1041 by Chinese polymath Bi Sheng. Arguably, you could also include computer programming, which had its central logic laid out by Ada Lovelace in 1843, a century before there were any computers to program. Undoubtedly, there is a great deal that could and should be salvaged from the world’s current list of neglected innovations.
A more relevant and recent example might be LoudCloud. Marc Andreessen, one of the most successful entrepreneurs and venture capitalists in the world, launched this cloud-computing provider with $120 million in seed funding and an open market of $5.9 billion. You probably haven’t heard of it; it doesn’t exist anymore. LoudCloud was broken up and sold off in pieces. You can’t really call the innovation a failure because its technology is still generating revenue, but that revenue is flowing to other companies.
What went wrong? A proper analysis could fill a book by itself, but part of the answer is that the world wasn’t ready yet. LoudCloud entered the market in 1999, a decade before Software-as-a-Service (SaaS) computing and storage went mainstream.
Innovation Management for Success
To successfully navigate the forces of change and disruption, the leaders of today’s organizations are tasked with one major challenge, namely reliable growth in an uncertain market landscape. Given current conditions and outlooks, the greatest risk you could take is to do nothing.
The Odds of Survival
According to some leading market estimates, four out of ten businesses that dominate their verticals today won’t even exist within a decade, and the ones that do survive will be transformed by technologies still in their infancy today.
Barriers to entry have never been so low, and product and company life cycles have never been so short. Simple optimization of current resources, processes, and business models is not enough. The central question each leader needs to answer is, “Where do we grow next?” Taking a chance is an unacceptable risk when so much is at stake. You will need a more insightful, data-driven way to define your investment in innovation—and that path begins here.
By its very nature, innovation seeks to challenge the status quo by making better, unique products and services using existing resources, capabilities, and competencies in new ways. The goal is to satisfy unmet needs, whatever they may be, by using and/or developing technology to make the impossible possible. Innovation can be done in small steps (incremental) or in leaps (radical). Everything external as well as internal can be innovated. Some innovations are designed to impact profit, while others are meant to grow market share, but each innovation affects the others within an organization’s Wheel of Innovation™. However, pursuing different innovations requires the adoption of equally different perceptions, mindsets, and goal-setting approaches. Thus, innovators and innovation managers need to be active in different “time horizons” at the same time.
Working with Three Innovation Management Horizons
The Innovation360 approach is inspired by Steve Coley’s work which defined how innovation can be divided into three parallel horizons. Each evolves along a predictable S curve.
The first horizon (H1) concerns smaller, incremental innovations that build on existing business models, extending the existing S curve of the company. These can normally be accomplished with little structural change and lead time. The second horizon (H2) is more creative and proactive, expanding and building new businesses in new directions.
The third horizon (H3) is sometimes characterized as “moon shots” or “skunk works.” This is a much more explorative approach to future S curves, to be commercialized in H2, ending up producing significant cash flows in H1. Ideally, a company should be working on all three horizons simultaneously.
The biggest failure of many contemporary strategies is that they are stuck in H1. Some studies indicate that up to 99 percent of businesses are trapped there due to “spiral staircase” leadership. In the interest of safety and risk aversion, leaders mandate step-by-step projects with narrowly defined goals and predictable ROI. This strategy has also been compared to arranging deck chairs on the Titanic, a futile action in the face of an impending catastrophe.
When this happens, large H1 projects tend to get prioritized to the extent that they generate internal traffic jams among projects that must share resources. The result is too many, too big, and too cautious projects that don’t create value for the firm or its customers.
Our most popular course, “60 Minutes Innovation Management” is now launched as a free online learning module – Innovation Training
60 Minutes Innovation Management is one of the most popular innovation management micro-courses we have ever run, now offered with a certificate. It covers, in 10 steps, every aspect of the foundation of Innovation Management. You will learn how to apply the Innovation 360s framework and models for analyzing the current and desired state and how to transform the organization’s culture, structure, capabilities, and processes for scaling innovation management across the board.
It is perfect for everyone within an organization to learn and get their foundations right.