Technique 6.30 How to Choose the Right Level of Innovation Ambition


There are 3 levels of innovation ambition:

i) change the known or core innovation (ways to deliver new quality, utility or delight to customers, eg keep offerings fresh and competitive. As these techniques are usually easy to imitate, copy, etc their advantages are short lived. This drives organic growth, keeps you in the marketplace and is usually done by existing players in the marketplace. If you are a new player in the marketplace, it is not enough.)

ii) change the boundaries or adjacent game (involves reframing your offering so it is harder to imitate, copy, etc; involves tackling a bigger challenge and delivering a more comprehensive solution for customers; can include changing the way you work; can create a sustainable competitive advantage. Appropriate to situations

"...When you need to provide new growth from your current assets and capabilities, or when you need to change the dynamics of the current market..."

Larry Keeley et al, 2013

Need to identify opportunities to

- apply an existing capability to a new market, eg medical imaging technology for airport security

- expand your current offerings to existing customers.

 iii) change the game entirely or implement transformational innovation (radically challenging and changing the industry;

"...Transformational innovations erase the boundaries between once distinct markets and irrevocably change what is expected from competitors and customers alike..."

Larry Keeley et al, 2013

Need to understand the possibility of disruptive change caused by innovations that will change everything, like the opportunity to create a new market by changing the rules and regulations and/or capabilities and assets. This can be risky and requires commitment.

Other comments

Need to remember that the rate of change can vary from being slow and predictable to rapid and abrupt.

Also, the following questions need to be considered:

- how much change do customers expect and what can they absorb?

- how will your competitors handle the change?

- do you need to accelerate the rate of change to throw competitors 'off balance'?


1. Known or core innovation


- current offerings are driving growth and the business can continue to build on this strength and source of advantage.

- there are opportunities beyond what most players are focused on, ie production performance-driven innovation

- there is a general lack of innovation in the market place

- there are high barriers to entry, like capital requirements or regulatory complexity that limits threats of disruption


- need to generate cash flow quickly

- willing to accept a modest return on initiative

- current assets and/or capabilities are able to handle the drive to additional advantage in the current marketplace

- low appetite for risk

- unable to take on more innovation complexity

2. Boundaries or adjacent game


- your existing offerings are generating less growth and/or facing increased competitive pressure

- find ways to attract new customers

- competitors are conservative in their approach to innovation, ie not looking for disruptive innovation

- market is stagnating and generating low returns, and therefore needs to shift its approach to business


- need to generate significantly more growth

- within a reasonable time-frame to generate better returns

- can easily redirect assets and capabilities to create new advantage

- willing to take on more risk and consider opportunities to move into new markets and/or play differently within current markets

3. Change the game entirely or transformational innovation


- need a significant increase in growth

- competitors are proactive

- identify a way to alter the structure of the market fundamentally

- market is stagnant

- barriers to entry are changing

- industry boundaries are blurring or eroding

- there is a threat of disruption


- timeframe to ensure and generate good returns

- prepared to rethink and reconfigure assets and capabilities as well as develop or acquire new ones

- willing to take a substantial risk and reconsider entirely new options and opportunities to re-frame your customer base and how you serve them


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