The Power of little ideas
Whenever a company faces stagnation in growth or decrease in revenue from its existing product portfolio, there are two approaches commonly taken. One is to do incremental innovation or do a disruptive innovation. But this kind of a binary decision need not be taken and there is a third way of doing innovation and that's what the book "The Power of little ideas" advocates for with clear examples from various companies across industries.
The Third way is create multiple complementary innovations around a core or key product that make that product more appealing and competitive. The companies adopted the third way have delivered explosive growth without the high cost and risk of radical disruption.
Gatorade, the sports drink brand has shown how it built complementary nutrients around its product and targeted athletes who are the target customers and grew up it sales when it have to face stiff competition from a rival who have slashed prices to compete.
Novo Nordisk, the Danish Healthcare giant was a late entrant into the HGH (Human Growth Hormone) segment but still was able to capture market share through its complementary innovations like how it helped the patients consume the medication with much ease.
Apple after Steve Jobs returned in the 1990's was able to launch complementary innovations like iTunes which was built for its core product Mac. Later it ventured into products like ipod, iphone and ipad.
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CarMax a company specialized in selling used cars, a business which is quite boring and not so glamorous invented ways on how to make the car purchase seamless for its customers and topping up with an enriched experience.
LEGO, the toy company was about to go bankrupt since the sales of its brick toys plummeted with the arrival of Play Stations and other gaming consoles. But it found a way to innovate around the key product providing story experiences, Music CDs etc thereby making the playing experience a fun for the Kids.
GoPro action cameras are redefining how we view adventure sports and record our own outdoor experiences. The growth of Gopro was not easy when the giants like Sony, Nikon etc were in the market. Compared to the existing players Gopro cameras were not so good in terms of technical specifications. But the simple complementary innovation of allowing you to place your camera wherever you want and still record and enjoy the experience live.
To top it all Walt Disney is the one who has built the entire Disney Universe across a core product i.e catoons and it get extended to animation movies, studios, theme parks and television.
The book suggests 4 decisions you have to make when you are adopting the third way and they are
The Third Way is not a replacement for incremental improvements or disruptive innovations; rather, it’s another option that every business leader should understand and consider when faced with an innovation challenge.