What Type of Innovation Fits Your Company?


Share on LinkedIn

Hutch Carpenter’s latest post on the Four Quadrants of Innovation caught my attention and provoked a few reactions. I guess that’s the sign of a good blog post.

His quadrants are the combinations of two dimensions:

minimal technology change to radical technology change, and
manage existing markets to create new market.

My first reaction was very positive. Hutch argues that companies should pick their innovation spot. By this he means they shouldn’t all be lured towards disruptive innovation. This is very sage advice. Companies differ dramatically in their ability to envision disruptive innovation and even if they hire outside talent, their organizational dynamics might not let them reap the benefit. Also, the timeframe and risk level of innovation may not match with the company’s circumstance.

My second reaction was provoked by his focus on technology and the inside-out perspective. There are many great examples that illustrate that it is not the technology per se, but value creation it enables that is important. These days’ customers and an outside-in perspective are critical elements of getting it right as well as being critical fueling engagement and demand.

My third reaction was that the quadrants were not pure. I believe that innovation is about value creation and the value that matters most in today’s business climate is value to customers. With this lens, the customer experience, customer engagement and co-creation with customer takes place in all four quadrants.

I think Hutch’s post is a valuable conversation starter. With a little refection it will help companies refine their approach to innovation – find their spot. It also Some might want to create their own matrix or come up with their own examples. Both of these will be a valuable exercise.

Here are some of my outside-in reflections on Hutch’s quadrants.

Minimal Technology Change – Manage Existing Market

@KogiBBQ: Most people are familiar with the taco trucks that roam mostly the industrial zones of big cities. The concept is inexpensive food in zones with few restaurants – a price and convenience play. Enter KogiBBQ in the Los Angeles market. They deliver a differentiated Korean dining experience from the back of a truck. Unlike the typical taco truck, their play combines convenience with desire. They pull if off by cleverly using social media – namely Twitter. Taco truck show up on an approximate schedule determined by traffic and as a consequence the customer must bend to their schedule or make an alternative choice. The good news is they know what they will get, experientially that also can sap desire. KogiBBQ tweets constantly around two themes. Some tweets focus an increasingly accurate estimate of when they will be at a given location, and, other tweets provide a tantalizing description of daily specials. The combination give customers’ great control of over their schedules and the description entices them creates desire and even advocacy. Does it work? Well they have over 48,000 followers on Twitter.

Minimal Technology Change – Create New Market
iPhones apps: The last I heard there are now over 100,000 apps for the iPhone. In my book, Apple gets credit for stimulating the innovation and enabling it to flourish. The real innovators are the apps creators or co-creators since they leverage Apple framework. The key to the best apps is that they meaningfully engage customers.

Radical Technology Change – Create New Market

Second Life: I must admit that I am not a participant in Second Life, more of an external observer. My impression is that after very rapid early adoption things have slowed down. As with most technological innovation, build it and they will come isn’t enough. As Hutch points outs, there is high risk in this quadrant. The risk comes from a failure to stimulate desire and engagement. These days the users themselves are likely to create innovative uses the platform that sparks others. The challenge is making sure others hear about their innovation and can envision ways this innovation is relevant to them and their company.

Radical Technology Change – Manage Existing Market

Software as a Service: Hutch says companies that take this approach don’t seek to find new opportunities; they seek to address changes in customer behavior. I say the changes in customer behavior are meaningful new opportunities. For example, customers now use multiple channels to gather information to make informed decision. This creates a serious challenge for B-to-C marketers who have difficulty in managing and integrating the different channels in a meaningful way. Most often the technologies serving each channel are not integrated and are managed by different people with different agendas. Some B-to-B SaaS service providers can overcome these silo data and organizational silo and serve up a flexible deliver mechanism as well as analytic system.

One question to ask is where does collaboration and ideation software like that created by Hutch’s company, Spigit, fit in? There are some excellent examples emerging of where this type of technology has dramatically impacted productivity. There are also examples of where the harnessing of collective intelligence has lead to breakthrough ideas. I believe that as we move forward one of the most powerful applications will be in facilitating organizational agility – the ability to align and integrate organizations to pursue new opportunities and possibilities

John Todor
John I. Todor, Ph.D. is the Managing Partner of the MindShift Innovation, a firm that helps executives confront the volatility and complexity of the marketplace. We engage executives in a process that tackles two critical challenges: envisioning new possibilities for creating and delivering value to customers and, fostering employee engagement in the innovation and alignment of business practices to deliver on the new possibilities. Follow me on Twitter @johntodor


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here