Tuesday, May 28, 2013

Stealth Innovation

If somewhere deep in the corporate hierarchy an innovator has a very daring and promising innovation idea, the traditional advise is to first obtain top management commitment, in order to overcome the resistance that is to be expected later on during the innovation project.

However there are several issues associated with this traditional approach:
- You often get only one chance to pitch your idea at the top. If your idea is not convincing enough, not only are the executives going to say "no", they are probably going to remain negative indefinitely, due to anchoring bias and confirmation bias.
- Political power plays
- Forced to follow extensive corporate procedures
- Distortion by certain stakeholders with differing interests
- Pressure for short-term result.

That is why Paddy Miller and Thomas Wedell-Wedellsborg in their article "The Case for Stealth Innovation" in the Harvard Business Review of March 2013 recommend another route:
- Stealth Sponsors: initially present your idea 1 or 2 levels below the C-level, provided they are powerful enough to get the project started.
- Stealth Testing: First create a proof of concept, collecting evidence of the value of your idea.
- Stealth Resourcing: Use funding from surrounding projects or departments with spare capacity.
- Stealth Branding: Create a cover story to develop your idea 'under the radar', for example by telling curious outsiders that it is part of some other project.

Although I can agree with the reality of the issues of traditonal innovation approaches that the authors mentioned, and although I appreciate their good intentions, I would still recommend to share your intended stealth approach at least in broad terms with a board member.

Friday, May 24, 2013

Big-Bang Disruption

Big-Bang Disruption (BBD) is a term recently coined by Accenture gurus Larry Drownes and Paul F. Numes in "Big-Bang Disruption", HBR Mar 2013.
Lately, technological innovation started out from the low-end. Initially cheap and simple substitutes of traditional existing, more complex products are offered. From this starting position, disruptive innovators work their way up, improving their product until they can capture higher-end clients as well.

But now that platforms such as Android and iPhone have become so powerful, simple to use and omnipresent, a new type of disruptive innovation is enabled: 'big-bang disruptions', wiping out entire markets almost overnight. Big-bang disruptors don't start anymore with attacking the low end, they attack all users at the same time.

The authors argue that the total length of Roger's Innovation Curve has now been compressed a lot. And not only that, his 5 customer segments (innovators, early adopters, early majority, late majority and laggards) are now obsolete for such markets and should be replaced by a model with just 2 type of users: trial users and everyone else.

The authors have 4 tips for incumbents - none of them seems very easy to achieve...:
1. See it coming - recognize early warning signs.
2. Slow the disruption down - delay their profitability and form alliances with partners they need.
3. Prepare for immediate evacuation of current markets and getting rid of physical assets.
4. Try a new kind of diversification - have many experiments at the same time on extendable platforms.