How can you balance incremental and radical innovation with the Innovation Ambition Matrix?

1 The Innovation Ambition Matrix

The Innovation Ambition Matrix is a framework that was developed by Bansi Nagji and Geoff Tuff, two consultants from Deloitte. It consists of three zones that represent different levels of innovation ambition. The core zone is where you focus on incremental innovations that enhance your existing offerings and operations. The adjacent zone is where you explore new opportunities that leverage your existing capabilities and assets, but in new markets, segments, or channels. The transformational zone is where you pursue radical innovations that create new value propositions, business models, or industries. The matrix helps you visualize how much of your innovation portfolio is allocated to each zone, and how that aligns with your strategic goals and resources.

3 The Challenges of the Matrix

The Innovation Ambition Matrix is not a magic formula that guarantees innovation success. It also comes with some challenges that you need to be aware of and address. One challenge is that different zones require different skills, mindsets, and processes, and you need to manage the potential conflicts and trade-offs between them. Another challenge is that the matrix is not static, and you need to constantly scan the external environment and update your assumptions and opportunities. A third challenge is that the matrix is not prescriptive, and you need to experiment and learn from your failures and successes.

4 How to Use the Matrix

How can you use the Innovation Ambition Matrix in your business strategy? Here are some steps you can follow. First, assess your current innovation portfolio and plot your projects on the matrix. Second, define your target innovation mix and ambition level, based on your vision, mission, and goals. Third, identify the gaps and opportunities in your portfolio, and generate new ideas to fill them. Fourth, prioritize and select your innovation projects, based on their potential value, feasibility, and fit. Fifth, execute and manage your innovation projects, using different approaches and methods for each zone. Sixth, evaluate and review your innovation portfolio, and make adjustments as needed.

5 Some Examples of the Matrix

To illustrate how the Innovation Ambition Matrix works, let's look at some examples of how different businesses have used it. One example is Apple, which has a balanced portfolio of core, adjacent, and transformational innovations. Some of its core innovations include the iPhone 12, which improved its camera and performance. Some of its adjacent innovations include the Apple Watch, which expanded its product line and entered the wearable market. Some of its transformational innovations include the iTunes Store, which revolutionized the music industry and created a new revenue stream. Another example is Netflix, which has shifted its portfolio from core to transformational over time. Some of its core innovations include the DVD-by-mail service, which improved its customer convenience and retention. Some of its adjacent innovations include the streaming service, which leveraged its technology and content to reach new customers and markets. Some of its transformational innovations include the original content production, which created a new value proposition and competitive advantage.

6 Some Tips for the Matrix

To make the most of the Innovation Ambition Matrix, here are some tips you can follow. First, be realistic and flexible about your innovation mix and ambition level, and adapt to the changing circumstances and opportunities. Second, be intentional and strategic about your innovation portfolio, and align it with your vision, mission, and goals. Third, be creative and diverse about your innovation sources and methods, and involve your customers, employees, and partners in the process. Fourth, be disciplined and rigorous about your innovation execution and management, and use different tools and metrics for each zone. Fifth, be curious and open-minded about your innovation learning and improvement, and celebrate your failures and successes.