Necessity is not the only mother of innovation, Opportunities are also!

"Necessity is the mother of invention" – Plato, ancient Greek philosopher

This is a valid statement for the inventions like fire, wheel, steam, electricity, etc. If we need to wait till a problem is defined, then many innovations might not have happened:

• No body asked Sony to invent a Walkman
• No body asked Apple to invent Smartphone
• No body asked Facebook for a Social platform

It means that the primary driving force for most new inventions is an opportunity that can create a need/ want. A need or problem encourages creative efforts to meet the need or solve the problem.

If we are waiting for the necessity or need to be defined, we must be biting nails all along or doing nothing? Spot the opportunities and get on with innovation.

Innovative and creative people are creating new markets through disruptive innovations. Companies need to reinvent themselves with technology enabled innovations to stay relevant, undaunted and indomitable.

I read a story in Readers Digest during my college days “Keep Pace or Perish”. While I did not know the deep ramifications of this statement, I am fortunate to be a continuous learner and reinvent myself to be relevant and undaunted. Another message in the article that shaped my thinking is “Focus on your strengths while shaping your career, overcoming all the weaknesses may take your lifetime”. I quickly realized my core abilities of lateral thinking and good domain understanding and remained in the realm of such roles all along my career.

In this article, I would like to blend popular innovation frameworks from few thought leaders and analysts into an innovation framework for co-creation.

Innovation is about finding solutions to unsolved problems or improving the current solutions. Problems are essentially deep-rooted human needs or wants, some stated and some unstated. Stated needs have an ascertainable market opportunity. Solving unstated needs or latent needs or wants will create new markets. Carving out new markets in a market disrupted by business models, regulations and exponential technologies requires an ecosystem of co-Creation partners.

Innovation Framework

Innovation strategies need to be contextual to the problem being solved. In a seminal article published in HBR, Greg Satell, International Keynote Speaker, Bestselling Author and Advisor, defined 4-types of innovation and the problems they solve.

Sustaining Innovation: Most innovation happens here. Sustaining engineering of a software product.

• Continuous improvement of product features to enhance benefits
• Business domain (problem/ need/ want) and technology domain (solution domains) are well defined
• Incremental improvements (Kaizen)

Breakthrough Innovation: Well defined and hard to solve problem. E.g. breaking a monolith software application

• Bring in multiple domain skills to solve the problem
• Cross functional teams, open innovation

Disruptive Innovation: Well defined domain and hard to solve problem. E.g. Automotive industry getting transformed into a mobility ecosystem.

Clayton Christensen, who introduced the concept of Disruptive Innovation discovered that “ when the basis of competition changes, because of technological shifts or other changes in the marketplace, companies can find themselves getting better and better at things people want less and less. When that happens, innovating your products won’t help — you have to innovate your business model”.  

What can be attempted is:

• Servitization, transforming products into information rich services
• Disintermediation
• Platformming

E.g. An Insurance ISV can become an Insurance platform

Basic Research: Addresses not well-defined problems and not well-defined solution domains, which is the realm of fundamental academic research before it can be commercialized.

E.g. Internships with academia to adopt new technologies, e.g. AI for precision insurance and Blockchain for smart contracts

It is advised that a firm should not lock into one single innovation strategy and must pursue different strategies depending on the context.

Innovation drivers – finer segmentation

The viability of a company depends on its ability to innovate. Ansoff’s growth strategy matrix has been expanded with additional dimensions by Bansi Nagji and Geoff Tuff in an insightful article in HBR, A Simple Tool You Need to Manage Innovation. The Innovation Ambition Matrix depicts company’s approach to solutions on the x-axis and markets on the y-axis. 

Core innovation: these initiatives make incremental changes to the existing products and markets. This is like sustaining innovation narrated by Greg Satell.

Adjacent innovation: involves extending the current product to a new market or a new product to the current market, without significantly altering the business model

Transformational innovation: initiatives to research and develop new solutions there by creating new business models/ opportunities disrupting the established normal

Product Innovation Strategies

Roman Pichler, noted guru in product management, simplified the innovation ambition matrix for ease of implementation. Two dimensions address the newness of product and market. Transformational innovations have been renamed to disruptive innovations.

Bringing these frameworks together will help understand the innovation ecosystem requirements for the technology and service providers who aspire to be co-creation partners in the digital business transformation.

Gartner view on co-Creation

Co-creation means collaborating with outside stakeholders to build a new product or obtain feedback to refine a product.

Gartner defines co-creation as “providers actively using customers in the design process of future products with the help of a collaborative platform provided by the provider”

Gartner distinguishes two categories of Co-creation objectives:

• Building something new
• Seeking feedback on an issue, something built previously or a conceptual product/idea

In either case, collaborative product development is required to involve all the stakeholders in the co-creation.

co-Creation ensures customer inputs – where his needs are known and stated, customer education - where his needs are latent and un-stated or innovator is focused on creating new markets, but ratifies the innovation outcomes and product-market fit. Innovations become commercial successes with co-Creation in which experimentation, feedback, fail fast and fail early are embedded.

Continuous Transformation needs multi-pronged product-centric Innovation Strategies

Co-Creation partners should organize themselves to have business, technology and process agility to capitalize on the innovation opportunities and contribute towards a sustainable humane world.

Product management framework should enable the collaborative product development team with the triple disciplines of product owner, product architect and scrum master for agile product development and continuous delivery.

New product innovation should continuously communicate with the customer for understanding evolving needs. Product improvements should seek feedback from the customers in modernizing the same. When there is a business model as well as technology innovation, customer working groups must be formed to seek continuous feedback during the digital business transformation.

Innovation Platform: This enables all the co-creators to collaborate. It provides people, process and tools for delivery pipeline management.

Technologies Centers of Expertise: A Technology and Services provider should be at the forefront of understanding the emerging digital technologies, AI, IoT, Blockchain, AR/VR, Data Science, etc. their usage scenarios, what to use when etc. This should be accomplished through a technology innovation center whose charter should be to do the following:

• Technology partnerships with maker platform vendors
• Conducts and Participates in Hackathons and Beta programs
• Manages Industry academia relationships and internship projects
• Technology and Engineering audits for all the customer engagements
• Development of innovation accelerators
• Enable sales in winning customers
• Developing Go-To-Market strategy and Positioning along with CXOs and Domain CoEs

Technology CoE should be staffed by experienced technology polyglots with years of experience in multiple technologies.

Domain Centers of Expertise: While the customer and customers’ customers provide the functional and domain knowledge of the products to be built, the co-creation partners must have domain capabilities in terms of digital business industry visions, uses cases, solutions and how they intersection of business and technology works. Modern day systems are data driven, intelligent and experience focused. Domain CoE should be at the fore front of understanding Business Model Generation, Platform Business Models, Business Process Classification Frameworks, Model Driven Engineering and Domain Driven Design. The charter of Domain CoE should be as follows:

• Developing Go-To-Market strategy and Positioning along with CXOs and Technologies CoEs
• Develop industry reference models
• Enable sales in winning customers
• Conduct digital business transformation workshops
• Provide shorter runway for the customer innovation

Domain CoE should be staffed by multi-disciplinary domain experts with years of experience in multiple products, technologies and domains.

Conclusion

Continuous transformation is a business imperative for survival and growth whether you are a digital disruptor or digital defender. This requires multi-pronged product-centric innovation strategies with enabling product management framework and innovation platform. You must be pursuing all the strategies simultaneously at various intensities. This may demand an internal virtual network organization overlapping on the hierarchical organization that is running business as usual.

Careful selection of the co-creation partners for collaborative product development, ownership of IP by the digital business, continuous re-invention and innovation will ensure businesses to create new markets and thrive in the digital economy.