Breakthrough Innovation Recipe
Ingredients & Preparation Method for the Modern Corporate Palate!
The most innovative chefs are known for creatively looking backwards as well as forward for ingredients and methods to surprise their eaters’ palates. That’s how they are pushing their kitchens towards uncomfortable and unfamiliar directions. Similarly, innovation managers must be ready to push their businesses towards the uncomfortable and unfamiliar direction of future industry leadership by creatively looking backwards as well as forward within their industries to create breakthrough innovations and satisfy their business palate.
Recent work on innovation shows that the special ingredients that can enable breakthrough innovation are a trailblazer mentality, leadership ambition, and a practical framework for innovation. And a useful “preparation method” for breakthrough innovation that confronts turbulent markets is open innovation. Now let’s delve into these.
Breakthrough Innovation Ingredient list:
Industry innovation breakthroughs are difficult to achieve. They require a special mentality. One capable of identifying and abandoning practices, ideas, models and attitudes that have lost relevance in an industry as well as discovering future trends, ideating new concepts and experimenting. We can call this special mentality trailblazer mentality. It allows businesses to selectively forget their past and to actively create their future.
An example of a trailblazer mentality is Hasbro. In the mid-1990s Hasbro was a product company competing in an industry broadly referred to as family entertainment. Its offerings mainly consisted of toys (Little Pony, G.I. Joe, etc.) and board games (Monopoly, Candy Land, The Game of Life, etc.). Moreover, until the 1990s people could only purchase Hasbro’s products in a retail store. Hasbro customers’ shopped, bought, and returned home with a toy or a board game. Today, Hasbro is a self-styled branded-play company. Its offerings consist of online game, fan sites, movies, television shows, digital gaming systems, and comic books & magazines produced in partnership with Disney and other companies. One big breakthrough they had was Transformers. Customers can interact and purchase the Hasbro brand through different serving points (not restricted to retail stores). Hasbro team was able in the mid-1990s to visualize the strategic shifts in family entertainment, to selectively forget their offering model and generate breakthrough innovations. They had a trailblazer mentality.
Trailblazer mentality isn’t enough for breakthrough innovation though. Ambition to achieve future industry leadership by flexibly adapting to change is required. Usually, companies that are hungry for leadership are the ones that know where they would like to be in ten years. These companies and their human talent are driven daily by the desire to lead their industry. An example of leadership ambition is Apple under Steve Jobs. Apple helped transform seven industries: personal computing, animated movies, music, phones, tablet computing, retail stores, and digital publishing. History will be able to remember this company as one that applied imagination and technology to business while having the clear ambition of leading by leapfrogging.
There are different frameworks to lead innovation and for achieving breakthrough innovation. One particularly useful is the Three Box Solution created by Govindarajan (2016). The three box solution recognises all competing challenges innovation managers face when leading innovation. It facilitates the alignment of the organisation and teams on the critical but competing activities required to simultaneously create new business through breakthrough or non-linear innovations while optimising the current business through incremental or linear innovations.
According to the three box framework, companies have to allocate resources between the following:
Image Nº1. The Three Boxes
Source: The three box solution.
- Box 1- Managing the present core business at peak efficiency and profitability.
- Box 2- Escaping the traps of the past by identifying and divesting in businesses and abandoning practices, ideas, and attitudes that have lost relevance in a changing environment. This is called selectively forgetting the past.
- Box 3- Generating breakthrough ideas and converting them into new products and businesses.
Future industry leadership requires that innovation managers overcome the bias to over-focus on Box 1 and allocate resources to Box 2 and Box 3. Why? Box 1 will allow you to prepare for present competition but only Box 2 & Box 3 will prepare you for future competition, make you think how to lead your industry and generate breakthrough innovations. Simply put if the majority of your innovation projects are in Box 1 you are not working on breakthrough innovation and you are not investing in your future industry leadership.
Image Nº2. Distribution of Innovation Projects across the Boxes
Source: Harvard Business Review Press (2019) with adaptations by the author.
Breakthrough Preparation Method:
One way to achieve breakthrough innovations is through open innovation. Today many companies see open innovation — a process for sharing knowledge and ideas with other organizations- as a key approach for their Box 2 & Box 3 work. Examples include L´Oréal working with Renault on an electric “spa” concept car and corporate organizations collaborating with start-ups and scale-ups.
I hope you enjoyed this recipe and that you can achieve breakthrough innovation!
Passionate about Agile Business Growth & Innovation.
Govindarajan, Vijay. 2016. The three box solution. A strategy for leading innovation. Harvard Business Review.
Isaacson, Walter. 2012. The Real Leadership Lessons of Steve Jobs. Harvard Business Review.
Sull, Donald. 2009. How to Thrive in Turbulent Markets. Harvard Business Review.
Keeley, Larry. 2013. Ten Types of Innovation. The Discipline of Building Breakthroughs. Wiley.