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About: The Breakthrough Innovator’s Model is a total system of innovation guiding firms towards creating radical – breakthrough solutions that customers will reward you for.
Value: recast your innovation organisation by mastering nine key elements. Watch the video or read the transcript.
What story do you tell yourselves about innovation in your company? Is it good, is it bad, or is it downright ugly?
The breakthrough Innovator’s model was developed to explain the reasons behind disappointing innovation, performance and the necessary conditions to move to a position of innovation mastery.
The term breakthrough has a particular meaning.
Beyond the incremental, companies are looking for greater innovation.
Breakthrough innovation is something to shift the needle to change the status quo.
Breakthrough innovators significantly depart from common practices and can potentially reshape existing markets, create new ones, and prompt the emergence of new technological trajectories behind new solutions.
The three main topics we need to work on are the motivations and strategies, combined with the capabilities and skills underpinned by companies, innovation systems and processes.
These elements can easily go wrong, but they’re also the sources of what needs to go right to move from a position of lagging in the field of peer companies to becoming masters in the sector.
Now, companies rarely reach a position of innovation mastery from the start, but there are a few exceptions also, companies are rarely as bad as being in the category of laggard, but could well be somewhere in the middle ground.
The key motivational question is; is our position good enough?
The scale between laggards and masters is effectively a maturity scale, and we can use this to assess and plan our paths up the ladder and the business results that come with it. In the first dimension, consider the firm’s motivation and strategy without a good rationale, what we’ve called an innovation imperative.
It’s easy to anchor at a low level on the maturity scale or possibly to fall back to an even lower level of symptoms experienced by lagging, innovators.
Innovation could be more new product misses than wins, no or fleeting top team discussion about innovation and technology compounded by the absence of a plan for these lagging traits.
We can flip this to reveal the winning traits. In this dimension, we conspire towards becoming peer-leading value creators with new, exciting types of innovation.
There are three main parts to this innovation strategy area.
First is a clear and pervasive message about the company’s innovation imperative. This can be financial, greater revenues, growth areas, and improved profitability through more efficient processes.
Or it might be the acquisition of technologies or the transformation of a firm, for example, sustainability, digitalization, or new business building.
Second, related to the innovation imperative are the pathways, the chosen strategies for the business overall the innovation response to it and the technology strategy, running support, and the interconnection between these three.
Strategic problems come about when the firm becomes outta step with its environment.
Peer-leading value creators have a story to tell at each level. They update it and keep it refreshed.
Third, following the first two elements is about establishing the arena for value creation.
This follows from business or corporate strategy and sets the areas where the firm can meaningfully innovate, cutting new water in the blue ocean.
Now, while the core business maximizes its potential, it will be limited.
Resources become scarce as the company chases margin. In the new arena, there is potential for breakthrough innovation.
Peer-leading value creators manage the tension between its core and the new.
Switching over to the capabilities and skills dimension. For lagging firms, opportunity losses are experienced from having the wrong or outdated skillset, individual competencies and organizational capabilities.
We can flip this to see the side where masters work across-the-board capability, which is broken into these elements.
The fourth element is on the topic of innovation leadership, which exists at four levels within the firm.
It’s top-level corporate or business innovation leadership for managing the entire business system.
Functional leadership manages the technical service provision team or venture leadership related to the team or the innovation project, and we as individuals manage ourselves within the innovation context.
In leading value creators, creative leadership is the differentiator of high performance and is our secret weapon.
It’s the process which generates new and valuable ideas directed towards influencing the actions and achievements of a wider group.
Fifth, some say innovation is a people thing. Well, surely it must include having the right people with the right skills at the right time.
Consequently, the firm has a chance to build its needed capabilities.
This naturally means maintaining or divesting in those skills and capabilities that run counter to the innovation imperative. After all, resources are usually tight and precious.
Next, as the six elements of the technologies enablers and resources the firm needs to access to support its value creation activity, the technologies of the science and the engineering and knowledge needed for breakthrough innovations and also running in support enablers and resources are the non-technology aspects such as partnerships, R&D facilities and other functions supporting the innovation imperative.
The final dimension is the systems and processes used to run and support innovation.
This can easily hold a firm back by not having a range of effective approaches to managing technology and innovation, and it can be worse than not having any at all.
We have all probably experienced poor stage-gate processes with too many gates and too much information gathering, but good systems and processes are the oil that lubricates the high-powered innovation engine to unlock full performance.
The idea of an innovation system started to merge about a decade ago, and we can now get ISO standards akin to quality management standards and systems.
The breakthrough innovators model is a total system of innovation.
An insight developed by this agency through research around 10 years ago was the idea of systemic effects that can positively reinforce or negatively undermine our innovation imperative.
Having good performance in each area gives more than the sum of its parts effect.
To complete the story on this element, we need ways to organize our activity and decision-making to keep the innovation and technologies portfolio focused and sharp.
The eighth element is about innovation climate in the field of innovation management. This is a topic of much interest.
As leaders state the need for having a culture of innovation, but then strive in vain to get it.
The problem is culture and it’s hard to measure.
If we use climate in its place, we can solve that problem.
Lagging innovators will likely have elements of negative or disabling factors that demotivate people.
Innovation masters have ways to recognize and reward both financially and importantly, non-financial, that attract and retain good people.
The ninth element is about the results and how we show them related to processes.
We need a set of KPIs and measures that align the organization to its innovation imperative, and this goes well beyond products under three years old and involves a meaningful set of input processes and outcome measures.
It tells everyone that we are on track and that our innovation imperative has been met.
We also need to review nurture and improve our innovation system under the custodianship of a top team leader.
This is how we build a flywheel of beneficial improvement towards innovation mastery.
The Breakthrough Innovators model helps us to attend to the components of a high-performing innovation machine, and results are many and profound for the financial people, you get financial returns.
One study shows that top innovators generate a total shareholder return premium over the rest.
It means predictability and controllability of financial results that make you more attractive to investors and buyers.
The predictability also plays out in the delivery of your offers, the products, services and solutions that your customers appreciate you for.
We need and hear so much about the skills and capabilities a company needs from having enough of the basics to cutting new ground in science, technology and partnerships, and perhaps the softer benefits that come with a steel edge.
They are agility, resilience to shocks and recognition of the company and leaders by
peers.
Join me and other companies to become a breakthrough innovation leader.
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Rob Munro delivers strategic innovation services to companies, universities and government agencies giving business and innovation leaders the practices, tools and confidence to achieve best-in-class innovation results. Please contact me to discuss ways to bring greater effectiveness to your innovation processes.
Read more about my service to organisations for innovation planning in improving innovation results.