Catch the Next Wave

The best products and services will become obsolete. Every market will eventually decline and disappear. This is a fact of business that every organization must embrace. Through no fault of your own, the steady advance of knowledge, technology, and human creativity will inevitably reform the way we think about the world and how we spend our time.

Innovation defines the human experience and dictates whether your organization will survive in the long term. History is riddled with stories of the dominant organization with seemingly invincible competitive advantage reduced to ashes by a scrappy start up with a transformative product. You’ve worked so hard to find a customer problem to solve, establish a culture around it, create competitive advantage, continuously adapt, and remove waste within your organization. All that’s left is to innovate with purpose, direction, and discipline so that your organization is not left in the dust when the next wave of customer needs makes landfall.

Why It Matters

Innovation is the last concept in The Way for good reason: it bridges the gap between the now and the next. It returns an organization back to the very first concept – putting customer problems at the center – by either finding the next customer problem to solve or by solving a current problem more effectively or efficiently.

Innovation creates competitive advantage. Why? As markets mature, they commoditize. This means what once was a revolutionary offer or product becomes standard. Your customers come to expect “the amazing” as “the normal”. This is because you’re not selling in a vacuum: competitors entered your market and neutralized your competitive advantage. And along with your diminished competitive advantage, so goes the price premium you command (i.e. profits). The one and only way out of this conundrum is to create something that your competitors cannot possibly recreate, either via a new offering or through a reimagined current offering.

You're Doing It Right If...

You have an established, transparent, and deliberate process to incubate, scale, manage, and sunset innovation.

You have selected a specific type of innovation that your organization will specialize in and purposefully avoid all others.

You are first to market in the types of innovation for the products or services you select and do not lose composure when a competitor beats you to market in a type of innovation you’ve avoided.

yOU'RE DOING IT WRONG IF...

You innovate in all directions but are unable to bring any innovation to market in a timely manner.

You attempt to compete in resource-intensive, short-term ways to earn revenue such as: price discounts, marketing spend, and non-strategic acquisitions. Or, your strategy is to simply copy your competition.

You do not have a plan or fall short of upskilling your teams so that they can play a role in innovation at all levels and stages of a product or service.

Key Practices

Innovation Types

Select the appropriate innovation type for your market and your business model

Incubating Innovation

Protect innovation from other investments that will distract focus and siphon resources

Context to Core

Repurpose resources invested in your established mature business to your core business

Innovation Handoffs

Manage the process of moving an innovation into the primetime while sunsetting others

Investment by Stage

Tweak how you invest in offerings based on their stage of maturity and impact to your business

Upskilling People

Create a strategy to reward loyal teams by enabling them to contribute to the next wave

wHERE TO sTART

Early Market

In an Early Market, you are seeking to place your innovation in front of early adopters and other potential customers who can narrow down your offering into something that is of high practical value. At this stage, innovation is all about creating an offering that no one can replicate so that you become “one of one” in the market you covet. There is little to no internal innovation you’re doing within your organization, it’s all about the offering.

Growth Market

At this stage, innovation is an extension of the product or offering innovation you performed in the Early Market. Innovation may become ‘stagnant’ at this stage simply because you are trying to sell your offering as fast as humanly possible. Most innovation takes the form of customer-facing changes to your product or offerings as you seek to claim a competitive advantage over your competition. It also is highly attuned to a specific segment of the market you’re pursuing.

Mature Market

Innovation will take many different forms at this stage. The key is to decide 1) which type of customer-facing innovation and 2) which type of internal innovation (i.e. changes to how you produce the product or offering) you will specialize in. You cannot innovate in all different directions at stage. Energy spent in one direction will often cancel out energy in another. You need a way to systematically graduate and invest in innovative offerings. You must also repurpose resources that are running support functions critical to your established business that makes up most of your revenue.

Declining Market

The only two types of innovation that matter in a Declining Market are selling off your current organizational assets or repositioning them in a new product or offering. Your goal is to get out of your current market as fast as possible. Focus innovation on harvesting your remaining competitive capabilities and pointing them at a new customer problem.