How is innovation consulting different from other kinds of consulting? In this guest post written for a-connect, our Managing Director Steve Wunker points out what makes innovation consulting distinctive, how the field has changed in the past decade, and what major trends will impact it in the future.
Companies are often frozen in place by an “iron triangle” of failure, risk, and learning. Even those with lofty ambitions for furthering innovation get tripped up by common business behaviors that, while innocuous on their own, create inadvertent roadblocks to new forms of growth. Although existing structures tend to be optimized for incremental innovation in the core, they often do little to extract positive lessons from failures and fully map out risks in new areas. While much may be invested in innovation, little is learned. Check out our new piece on Forbes to learn more about what holds back innovation.
This post was written by Stephen Wunker. To learn more about how New Markets helps companies build innovation capabilities, click here.
Since the open innovation craze swept the business community in the early 2000s, idea competitions have taken hold at a number of companies. While these competitions tend to bring in thousands of new ideas, most end up getting discarded. In our recent piece for Forbes, we look at what’s wrong with the idea competition approach, instead promoting innovation processes that revolve around growth platforms. We look at how some of the world’s leading companies have used growth platforms to create more stable innovation platforms that harvest only the categories of ideas that can be immediately put to good use. We also explore how you can choose the growth platforms that will fit your own innovation efforts.
This post was written by Steve Wunker.
From startups to large corporations, building a culture of innovation is high on the list of priorities for most companies. There’s enormous potential that can be unlocked by fostering creativity among the employees who know the ins and outs of your industry and your company better than anyone. But creating that culture is about more than adding a ping pong table, a few beanbag chairs, and some bright colors. In our recent piece for Forbes, we look at five strategies that companies can use to build a culture of innovation. From choosing the right type of innovation to focus on to empowering your workforce, we explore how companies from a range of industries have powered their innovation initiatives.
This post was written by Stephen Wunker and David Farber.
APQC published an interview with Stephen Wunker, our Managing Director, about the nature of innovation, how to innovate in large corporations, and how to follow through on disruptive ideas. Download the interview here.
APQC is a member-based nonprofit and one of the leading proponents of benchmarking and best practice business research.
Note: BestWatch recently came to New Markets looking to size various target markets using Jobs to be Done, and to develop a strategy for adjusting its product portfolio. The name and industry of BestWatch have been disguised.
BestWatch’s challenge was one that many companies face, though this fact was of little comfort to BestWatch’s executives as they watched their deadline grow closer. BestWatch had seen exceptional growth in its relatively new line of high-end watches, but analysts were warning that highly anticipated smartwatches would soon be adorning wrists everywhere. With a board of directors meeting looming, BestWatch’s executives needed guidance on whether to continue to invest in its high-end watch line. Historic sales data of other types of watches and bracelets suggested that BestWatch should continue to push its high-end watches. Meanwhile, advisors had averaged the wildly varying projections for smartwatches to determine that they indeed would be the next big thing. BestWatch hoped that Jobs to be Done could provide the real story.
“Jobs to be Done” is a term first popularized by Harvard Business School Professor Clayton Christensen. It is shorthand for a way to look at latent need in marketplaces and the wide variety of ways that people accomplish certain goals beyond just buying a product. For instance, a car buyer isn’t just purchasing a mid-sized sedan, but a way to express his personality, plan for a growing family, and impress his neighbors. He has many other ways of accomplishing those same jobs, and so an automaker has a broad range of competitors, as well as many hidden levers for getting those jobs done beyond everyday functional specifications such as turning radius and headroom.
For consumer goods executives, keeping up with all of the reports on how difficult it is to win in the industry might be just as difficult as actually winning in the industry. Countless articles and reports repeat Clayton Christensen’s statistic that 95% of new products fail, or note how very few new products end up being breakthrough innovations that meaningfully impact their categories. Many more detail how new product launches fail to meet a variety of specific metrics, such as covering development costs or having a material impact on the company’s growth trajectory. Most recently, however, Nielsen revealed its list of 14 Breakthrough Innovation Award Winners. Of more than 3,400 consumer goods product launches in 2012, only these 14 met Nielsen’s strict criteria for breakthrough innovation: (1) distinctiveness – delivers a new value proposition to the market; (2) relevance – generates a minimum of $50 million in year-one sales; and (3) endurance – achieves at least 90% of year-one sales in year two. Looking at the patterns among these 14 game changers reveals several best practices that consumer goods companies can leverage to create their own success stories.
My mentor Clayton Christensen, Professor at Harvard Business School and originator of the term “disruptive innovation,” is fond of saying that great innovations come from deeply understanding customers’ jobs to be done. Are “jobs” different from customers’ needs or sought-after outcomes?
Yes. All too often, marketers define “needs” in terms of product requirements, like the need for a car driver to have a cupholder. A driver’s “jobs” can be much more expansive. For instance, he may have a broader job to eat while driving, and still a broader one to avoid wasting time. Seen through this lens, an automaker has many more avenues for innovation than simply perfecting a cupholder. To address the job of eating while driving, the company may create a thin but sturdy tray that folds out from the center dashboard to hold a sandwich, and a tab under the passenger’s side dash where the driver can attach a small plastic trash bag. To help the driver avoid the feeling of wasted time, the company could e-mail its customers a weekly set of “best of” podcasts chosen to meet their interests. Importantly, the competition for getting a job done often is not in a company’s traditional product class, but instead customer frustration and doing nothing, or an alternative from a completely different industry. Examining jobs to be done can vastly increase the number of levers a company might pull to create innovative offerings.
Off-site innovation labs and acquisitions are often an effective way of bringing in tech talent or capabilities that a company otherwise does not possess. These outposts – which often contain a mix of existing employees and outside hires – can be useful places for creating new competencies and fostering innovative ideas that might meet resistance back at headquarters. However, the gap between the outpost and the core can quickly become a breeding ground for tension and miscommunication. In many cases, the off-site team produces valuable output that either fails to meet the needs of the core or that fails to gain traction because of an ill-prepared landing zone back at the core. Over time, the innovation lab or acquisition may quickly fall victim to the traditional “out of sight, out of mind” perils. By talking to some of the world’s leading companies and exploring their experiences with off-site teams, New Markets has collected some first-hand strategies for successfully harnessing the value of such a unit.
While the term “innovation” has recently been lambasted for both its misuse and its overuse, there is no denying that a strong innovation program is an essential component of long-term organic growth. Despite their importance, innovation programs frequently become sinkholes for employee time and company money. Far too often, these programs become holding pens for pet projects from senior management or high-cost training programs that fail to produce meaningful output. By mining insights from our own capability-building projects and reviewing contemporary case studies from a wide range of industries, we have identified five of the most common mistakes companies make in launching new innovation programs.
Ideas can be the easiest part of innovation. With a rigorously defined problem and a structured approach to problem-solving, teams usually have no issues generating a long list of solid ideas and establishing some priorities.
The problem lies in what comes next. Three scenarios occur time and again to defeat exciting concepts. Recognizing their dynamics, and taking a few simple steps to avoid them, can vastly improve the odds that an intriguing concept will become a real business. Read about these scenarios in my piece for Forbes.
This post was written by Steve Wunker. Click for more of our thinking about how to build innovation capabilities.
Incubators can be critical to sustained corporate success, but they are fiendishly difficult to get right. With a broad mandate and scant constuituency or resources, they struggle then fall victim to inevitable cost cuts. But there is quite a silver lining to the dark cloud -- when incubators do well, success can be spectacular.
In a piece for Forbes, I explore seven dimensions of incubator design through the example of one in healthcare. There is no single model for designing an incubator, but there is a set list of factors that need thinking through for success.
This post was written by Steve Wunker. For more information about corporate incubators, please click here.
Occasionally, new markets spring from technological leaps that create huge improvements in tackling well-known challenges. At least as frequently, though, the companies that push these new solutions into the market find themselves solving for problems that customers scarcely recognize.
When I led one of the world's first smartphone development programs, for Britain's Psion PLC in the late 1990s, we had dazzling technology. You could send a fax from a PDA! But we seldom paused to nail down the exact question we were trying to answer. As a smallish, albeit cutting-edge, company in a rapidly-moving market, we had to be precise about what we would and would not try to do. Yet we were bewitched by our cool solutions, and utterly flummoxed by how people could flock to a bare-bones PDA (Palm) or a primitive two-way pager that could send some e-mails (the Blackberry). It was a hard lesson to learn.
In my piece for Forbes, I lay out when asking the right question matters, and how to ask it in a broad yet rigorous way. Companies that thrive in new markets not only have good solutions, but they apply them to precisely the right problem.
This post was written by Steve Wunker.
Creators of disruptive innovations are frequently seized by the power of their idea. They envision all that it can become and the transformative effect that their innovation will have. Unfortunately, their zeal can blind them to the need for walking customers through several stages of adopting revolutionary ideas. Counter-intuitively, to launch a disruptive innovation you need to start small.
I came to this realization the hard way. In 2000 I led a team creating one of the world's first smartphones. We knew all that smartphones could potentially do, but we could not accept that customers would use only a small fraction of these functions at first. Later, I founded one of the first mobile marketing companies and was perplexed that the idea took off so slowly. Eventually I researched the patterns of how disruptive innovations get adopted, and I discovered useful insights I wished I had known years earlier:
In 2003, Clayton Christensen popularized an idea that he believes will be as transformative as his the concept he termed "disruptive innovation". The idea -- not yet as well known as disruptive innovation, but profoundly powerful -- was stunningly simple: instead of selling people products and services, help them to get jobs done in their lives. In many years of consulting with Christensen, I saw how this idea could lead firms to re-frame markets, address new types of competitors, and unlock vibrant sources of growth. Yet I also witnessed companies struggle to think about jobs-to-be-done in the sort of rigorous way needed to capture ideas precisely and translate customer insights into finished products and services. Read about a six-step process to apply the concept of jobs-to-be-done in my piece for Forbes.
This post was written by Steve Wunker. Click for more about how New Markets Advisors helps companies to re-frame markets through understanding jobs-to-be-done.
New Markets Blog