Innovation as a Business Design Challenge
When companies think of innovation, they generally think of new products. But a blockbuster innovation of the 1990s was not a product at all—it was the launch of direct-to-consumer advertising by the pharmaceutical industry.
“Not enough companies think about innovation as a business design challenge,” says Professor Rob Wolcott, founder and executive director of Northwestern University’s Kellogg Innovation Network. “Companies in the same industries tend to focus on the same stuff over and over again. But if you always look in the sameplaces, you’re liable to find the same answers.”
In October 2012, Wolcott led a one-day workshop and expert panel (featuring Professor Philip Kotler) for MSI members on marketing’s role in driving entrepreneurial activity in their organizations. The question is, How can companies become more strategic about focusing their innovation efforts and investments?
Wolcott’s “Innovation Radar” framework, developed with Mohan Sawhney, Inigo Arroniz and Jiyao Chen of the Kellogg School, describes 12 vectors, or dimensions, of innovation. It encompasses the firm’s offering—the innovative product or technology—as well as vectors focusing on customers (e.g., segmenting), processes (e.g., supply chain), and presence (e.g., channels).
“Companies can innovate along any of these dimensions,” says Wolcott. He notes that companies that focus on 2-5 vectors tend to do better than companies that try to do “a little bit of everything.” The latter approach suggests that the company is not aligning innovation efforts with strategic goals. “The radar framework helps companies build a bridge between their stated corporate goals and their innovation spending. “It’s a matter of picking your bets,“ says Wolcott. “It takes guts and insight—but that’s how companies can transform the basis of competition in their industries.”
Here Rob Wolcott talks about the innovation radar framework:
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