I attended an excellent strategy session today by John Metcalfe on Innovation (how do I innovate and market in an increasingly commoditizing marketplace) and Management (how do I manage innovation?). This was particularly interesting since I’ve been recently involved in some efforts and initiatives to innovate on our product offerings.
Here are my notes from his talk:
- Darwin (survival of the fittest) is at work in the industry. Hence, differentiate or get marginalized.
- Over time, factors that differentiate your product become commoditized, either due to your success or the collective success of your industry.
- Innovation is key to differentiation and a competitive advantage.
- “Best in class” is over-hyped
Return on Innovation
- Innovate to achieve competitive separation and distinction
- Identify your
- core – products, processes that enable your factors of differentiation. Re-engineer everything to enhance your core
- context – everything else
- Know why you’re innovating – classify each initiative to aim to meet one of the following innovation goals: Differentiation, Neutralization, Productivity, Failed attempts, Waste
- The strategy to adopt depends on the product maturity life-cycle. New products need product innovation. Mature products may need process innovation (operational excellence and/or customer intimacy). Products close to end-of-life need renewal innovation.
- Examples of innovation types include – eBay (disruptive), Apple (design), Nike (marketing), SAP (integration), IBM (renewal).
- This was really eye opening to see that innovation is not limited to product/engineering; it can and should happen in all areas of a company.
- Over-invest and over-perform on core factors
- Core becomes context over time. Resources and priorities within the organization tend to get focused on context
- Need to identify and extract resources from context to re-purpose them for core
- As a manager learn to identify the innovators, deployers and optimizers in your people. Put them in the appropriate tasks.
- Focus on role expertise (long term benefits) vs. task expertise (short term benefits).
- Use the innovation matrix to determine priorities and resource allocation
All in all, a lot of food for thought.