Innovation: The Fastest Route to Sustainable Growth

By Kelly Lawrence, Founder & CEO, Lawrence Innovation

There is no greater opportunity for leaders to generate sustainable growth than innovation. Done well, innovation generates profitable new business while improving the condition of customers.

What Is Innovation?

One of my favorite definitions for innovation is:

innovation = invention * commercialization

Innovation is the intersection between target market desire, market viability and technology. In other words, an innovation must solve a customer problem better than the next best alternative and improve the customer's condition while being economically viable. In doing so, innovation generates profit for the innovator. Technology is the enabler and people are the connectors that make innovation happen.

Why Innovate?

Innovation accelerates results. Gina O'Connor, professor of Innovation Management at Babson College recently published an article in Fast Company stating: "Doubling down on innovation in the midst of a crisis can have even greater benefits. Companies that prioritized breakthrough innovation at the onset of the 2008 financial crisis outperformed their peers in terms of market value by 10% during the recession. Five years later, those same companies were outperforming competitors by 30%."

When to Innovate?

In March of 2020, The Board of Innovation posted guidance for action in .5, 1.5 and 3 year intervals based on company growth rates. As of May 2021, the world is 14 months past the initial global pandemic shutdown. It is time for all companies to plan for the 1.5 year impact and beyond. In every growth position from positive to sustained losses over 50%, The Board of Innovation recommends a proactive effort to deliver new growth.

Positive Growth:

• .5 year impact: boost supply to keep up with the demand curve

• 1.5 year impact: Push for growth and market share

• 3 year impact; Aggressive push for growth and market share

Mildly Negative:

Defined as 0-15% sustained revenue loss over three prior quarters (Q2 2020 – Q4 2020)

• .5 year impact: Push through and prepare for fast back-to-normal upswing

• 1.5 year impact: Defend, improve competitive position and find new growth

• 3 year impact: Defend, improve competitive position and find new growth

Severe:

Defined as 15%-50% sustained revenue loss over three prior quarters (Q2 2020 – Q4 2020)

• .5 year impact: Survive and prepare for relatively slow back-to-normal recovery

• 1.5 year impact: Pivot though innovation and inorganic growth, or divest

• 3 year impact: Prepare for aggressive new entrants, Reinvent and create totally new position, or abandon.

Catastrophic:

Defined as +50% sustained revenue loss over three prior quarters (Q2 2020 – Q4 2020)

• .5 year impact: Mothball large part of the business and prepare to re-start.

• 1.5 year impact: Pivot though innovation and inorganic growth, or divest.

• 3 year impact: Last survivor strategy or abandon the market.

How to Innovate?

The first step to innovation is ensuring the market is large enough and profitable enough to positively impact your business. The next step is to understand the current situation through a discovery process. Discovery is a front-end-of-innovation learning process to identify customer unmet needs, satisfaction gaps and your potential value proposition. A de-risking process such as Minesweeper® from The AIM Institute can help teams identify the information they need to know in order to de-risk the innovation as well as when to stop investing in a no-win situation early. This helps management place smaller controlled bets as projects progress for improved ROI. For example, in order for our solution to sell, it must deliver on customer satisfaction gaps and be economically viable versus next best alternatives. Once discovery is complete, innovation teams are ready to begin the development process. Test marketing with select customers is a critical stage to gain early feedback and make tweaks to ensure the solution is ready for the mainstream market. Once the solution is validated, the focus shifts to launch and effectively communicating the value proposition. Effective communication of value proposition is critical for innovations to move from visionary adoption to main stream adoption on the product technology adoption curve.

Who Can Innovate?

Anyone can innovate. It takes a willingness to challenge assumptions, an openness to learning, a positive-take-action-attitude and a passion for continuous improvement.

One challenge individual team members may face is getting past fear and self-doubt. The Wall Street Journal recently published an article on Covid-19 increasing feelings of Imposter’s Syndrome among workers. It states that up to 82% of people feel like an imposter at some point, according to research published in 2019 in the Journal of General Internal Medicine. The article includes tips for setting aside the fear and building self-confidence – necessary for innovation success.

The discovery process can help team members build confidence in their own abilities and that of their team to deliver innovation.

Ready to Innovate?

How will you innovate to generate sustainable growth? Enter new markets? Develop new products or services? Change your business model? Revamp your innovation process? Improve market and customer insight on existing projects? Contact us for a complimentary consultation to get started.