Innovation is hyped. Everyone does it or wants to do it. And yes, in this fast-paced environment it is almost a necessity. At the same time, (almost) every organization believes they need to develop breakthrough ideas to stay competitive. They’re great on paper but also incredibly uncertain. Most organizations don’t have the proper fundamentals in place to kickstart the next big thing. Honestly, it’s often better to dedicate your innovation efforts to the true core of your business before experimenting with far-out initiatives. Try asking yourself these three questions.
1. Do I service my customers in an exceptional and, at the same time, business-smart way?
If the answer is not yet, start improving and digitizing your core business. Think creatively about how you can design a delightful customer experience that also benefits your business (reduces cost, increases cross-sell potential, etc.).
2. Do I leverage my existing assets and capabilities to create and capture new value?
Think about what makes you truly competitive. What are your key assets and capabilities that other start-up founders would kill for? Start from there. Explore how you can leverage this to access new markets (e.g. needs) and capture new value. This adjacent movement is one of the strongest forms of innovation and is often underused.
As a simple example, look at how Amazon leveraged its internal cloud operations and technology infrastructure. In 2006, Amazon launched Amazon Web Services (AWS) to offer its cloud computing services to other companies. This resulted in an incredibly successful new business model and revenue stream.
3. Am I preparing myself to remain relevant in the future?
Here’s where breakthrough and transformative initiatives come into play. It’s about creating a new set of assets, capabilities, and business models for an unclear and unknow market (need).
Let’s take the future of health as an example. How can hospitals prepare themselves for the future? As we notice, there will be a trend toward home care since healthcare systems won’t be able to maintain the growing care burden. In this context, how will the needs of patients evolve? And what will be the role of the hospital? Virtual hospitals? Far evolved telemedicine? 24/7 digital chronic monitoring? Smart preventive services?
It’s uncertain what will stick, and we can’t directly link innovation success to traditional success criteria. Nonetheless, it’s important to explore this space to remain relevant and leapfrog once a disruptive market shift materializes.
It’s tempting to go for far-out product and service innovations. When you hit bullseye, you’ll leapfrog and secure a future spot in the market. Most successful innovations are core or adjacent and have proven great results for many organizations.