What kind of innovator are you?

What kind of innovator are you?

For most organisations, the quest for growth via new product development starts with some kind of situation analysis. It is aimed at establishing the starting position from which to build a pipeline of relevant new products to ‘wow’ their consumers. This situation analysis usually includes an internal audit of capabilities & brands, plus an external consumer and market audit. Rarely however, does an organisation ask the challenging questions around its innovation vision. Establishing your innovation vision, including what kind of innovator the organisation wants to be, has the potential to drive sustainable differentiation and a fresh perspective on the competitive challenge.

If we start with a traditional situation analysis, we might look at trends in new products (ie what others are already doing in the market), we might research consumer needs/wants (at least what they can articulate), and we might conduct an audit of associated categories to help understand product interactions and to spark new ideas. From an internal perspective, we might look at competencies and capabilities, plus our brands and portfolios.
All of these tools and techniques are good and beneficial, however they miss one of the few opportunities for ‘pure differentiation’. Pure differentiation is borne out of sustainable growth levers; those weapons we have in our innovation armoury that are less (or not at all) able to be copied by competitors. They are more ownable and defensible, and hence, more sustainable as a tool for growth.

Sustainable growth levers are few.

Brands are one weapon that no one can truly copy. Positioned and managed well, a brand can bring value in terms of higher prices, more frequent or less fickle consumption, and even higher shareholder value. Way back in 1900, John Stuart, Chairman of Quaker said: “If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trade marks, and I would fare better than you.”
It is said that 51% of Coca Cola’s market capitalisation is in its brands. Similarly, the Disney brand sits around 68%, and McDonalds 71%. The more consistent and ubiquitous your brand is, the less easily a competitor can copy it, and the more sustainable it is as a growth lever.
The other sustainable growth lever is an organisation’s innovation vision, and in particular, what kind of innovator it wants to be. If this ‘stake in the ground’ is established, an organisation can differentiate itself by the way it does innovation, as well as what it does.
For example, an organisation’s history, budgets, processes and culture will all be critical in determining its capability, or its appetite for ‘first in market’ innovation. This approach to innovation can be too resource heavy for a smaller, leaner or slower organisation, which may be better suited to one of the other quadrants. Similarly, taking a creative approach to existing technologies will require a different weighting of skills within the organisation compared to a first in market approach.
Strategic innovation requires careful and thoughtful planning, and setting up a vision for innovation that sits between organisational mission/vision and new product pipelines.

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