How to Lay the Groundwork for Transformational Innovation

Transformational innovation does not happen by using the same processes that brings about incremental innovation. There’s more work upfront to identify key domains for potential innovations. These domains set the trajectory of everything that follows. Knowing which opportunities to pursue begins by first knowing yourself. Here’s how…

Identify Core Competencies.  These are a unique (or rare) bundle of skills, knowledge, and experience that delivers a valued customer benefit and competitive differentiation.  This should be a very short list that only includes competencies that your customers believe you are better than anyone else in the world at providing.  Criteria:

  1. Create value for the customer
  2. Are unique or at least scarce
  3. Are sustainable over a significant period of time
  4. Are important to the company’s position today
  5. Can be leveraged into new products/services, markets, or businesses

Identify Strategic Assets.  A strategic asset is a corporate possession that is difficult to imitate, develop, or acquire and that provides a basis for competitive advantage.  These could include:

  1. Input assets: Access to suppliers, supplier loyalty, financial capacity
  2. Process assets: technology, standards, functional expertise, infrastructure
  3. Channel assets: Access to distributors, distributor loyalty, networks
  4. Customer assets: Customer data, loyalty, brand recognition
  5. Market knowledge assets: Understanding of the customer preference and behavior, competitor behavior, economic indicators

Understanding the Business Model Framework

Source: Innovation To The Core; Skarzynski & Gibson

IN THE END, this appears to be intuitive and something any organization should be able to pull off the shelf, but most cannot. And familiar as it may sound, the process is different: defining positions of strength. The thinking is different: exploring and learning what’s possible and what’s next, versus driving performance into the business now.

Photo by Suzanne D. Williams on Unsplash

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