Innivation, Innovation Strategy, market, oppertunity search

1. Innovation Strategy
Sundeep Mohanty
This is a very brief research paper on innovation and
different strategies for innovation. Here the focus of the
research is to show correlation between Time, Market and
opportunities.
Sundeep_mohanty@yahoo.com
7/27/2012

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Contents
Time, Opportunity and Market Correlation Diagram: .................................................................................. 2
Abbreviations: ............................................................................................................................................... 3
Summary: ...................................................................................................................................................... 3
Three steps to convert idea to opportunity and opportunity to innovative product/service:................. 4
1. Visualize, Realize and Prioritize [VRP] Analysis: ............................................................................ 4
2. Look for opportunities – Open, Focused or Hybrid [OFH] Model:................................................ 5
3. Explore, Establish and Expand Model: .......................................................................................... 8
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Time, Opportunity and Market Correlation Diagram:
Above diagram indicates how market moves with time and how past untapped opportunities are now
parts of today’s competitive market. Most of the leading innovative Organizations falls under the green
zone (zone-3 in below diagram) and keep trying to stay ahead in the market by investing and exploring
the untapped market and trying to explore new opportunities and zone-4 of below diagram is the zone
to find opportunity. While majority of other Organizations are competing with each other in the extreme
red zone (Zone-2 in below diagram) and because of high competition and high supply, the profit margin
in red zone is less. The Organizations which falls in zone-1 are in high risk, without any product/service
gradually falling behind in competition and have very less to compete and survive unless until they don’t
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have any new innovation to bring them back to competition. Organizations which are in zone-5 also are
very risky in their business model (example: www.planetaryresources.com), because the product and
service they were planning to sell don’t have demand as well as market aware about that and sometime
the business model for this type of business not get evolved fully to realize its effectiveness.
Abbreviations:
VRP Analysis: Visualize, Realize and Prioritize Analysis
OFH Model: Open, Focused and Hybrid models
EEE Model: Explore, Establish and Expand model
IC: Idea Contributor
IGT: Innovation Governance Team
BPDT: Business Plan Development Team
BP: Business Plan
OSC: Organizational Steering Committee
FG: Focus Group
CFC: Core Focus Committee
IM: Innovation Moderator
Summary:
Above “Time, Opportunity and Market correlation” diagram explains how the market moves
with time and why it is important to look for new opportunities or create new opportunity.
With time, need changes and things of future look current. For example, six to seven years back
smartphone technology was far from reality however, in today’s market it is a reality, as demand for
smart phone increasing many companies are now in smartphone business with Apple and Samsung
leading the smartphone market. In another 4 to 5 years, smartphone phones going to be very common
and slowly will get saturated with high supply (though demand may increase) until unless some new
technology revolution brings some face-lift to the smartphone devices.
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In current market condition, most of the Organizations understand the importance of research
and innovation. However, looking beyond the current market and foreseeing future is not an easy task,
it needs proper planning to control future catastrophe.
Therefore, when Organizations are realizing the importance of innovation, it is necessary to
understand how to drive innovation initiatives. Here I am trying to explore few innovation strategies,
like “open innovation”, “focused innovation” and “hybrid innovation”. Though it is difficult to decide one
best approach, I feel for mid-sized to small-size established Organization should go for “focused
innovation”, whereas big Organizations can go in either way as they have enough budget to conduct
more research activities, while entrepreneurial Organizations can target any one of the above
innovation tactic depending on entrepreneurial resources.
Below providing three steps which I feel will help deciding how to create strategy for innovation
and create opportunity in the market.
Three steps to convert idea to opportunity and opportunity to innovative
product/service:
1. VRP Analysis
2. Look for opportunities- OFH Model.
3. Stay focused on core Strategy- EEE Model
1. Visualize, Realize and Prioritize [VRP] Analysis:
Visualize- Try to place your Organization in the above diagram depending on current product, service,
market demand, etc. Before taking any step I feel it is important for Organizations to find where it stand
in current market. Try 360-degree visualization by considering different viewpoints and then find a
commonly agreed view for current Organizations position.
Realize- Once Organization creates visualization, then focus on realization. Evaluate Organizations
vision and mission, create strategy where and how you want to take the Organization, try to foresee
where you think competitors are heading, how competitive you think future going to be, try identifying
issues, gap in business model, etc.
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Prioritize- In this step, work on all the issue you identified and all the market analysis you did in
previous two phases. Create short term and long term goals, create action plans to meet the goals. Once
you create the action plan, it is important to prioritize the action plans and start working as per priority
of the action plan.
2. Look for opportunities – Open, Focused or Hybrid [OFH] Model:
The approach for innovation and looking for new opportunities is not simple, Organizations really need
to understand their capability, liquidity, current consumer base and target market.
N.B.: Below I am not going to discuss implementation approach and who will own the innovation effort.
Depending on what type of effort needed, what type of technology and human resource needed, the
implementation responsibility and ownership may vary. For example- if the innovation opportunity is
related to mobile technology, then it may come to IT innovation team and then to IT development team,
but if the idea is to improve HR related process, then it should be managed by HR department with
support from innovation team.
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Open Innovation:
i. The free flow approach
ii. Free and open for any new opportunity, then try
to correlate with current business.
iii. Expect innovation ideas from individuals, which
may or may not follow Organization’s vision and
mission.
iv. There is no hard rule to focus on any particular
area.
v. Idea Contributor (IC) may be internal or external
to the Organization.
vi. Need more time for evaluation, may incur loss of time if the plan not fits with Organizations mission, obstacles in
its implementation feasibility, etc.
vii. The Innovation Governance Team (IGT) can then communicate with the Idea Contributor (IC) to understand the
idea.
viii. Innovation Governance Team (IGT) needs to ensure the feasibility of converting the idea to an opportunity for the
Organization.
ix. Innovation Governance Team (IGT) needs to work with Organizations Business Plan Development Team (BPDT) to
prepare a business plan (BP).
x. Innovation Governance Team then forwards the plan to Organizational Steering committee (OSC) for approval.
xi. Once approved, forward the plan to appropriate department/team for implementation.
xii. This approach brings freedom to think new ideas, but some time it is difficult to manage and sometimes plans are
very scattered and overlapping.
xiii. More work for innovation governance team (IGT) and less time to work or think about other innovation initiatives.
this strategy is OK for Organizations where research and innovation budget are flexible and always available, lead-time to
bring something to market is not very tight and demanding, Organization is should feel OK to spend time and other
resources without expecting success for all or most of the ideas. For mid-size to small size companies this approach is not
very suitable, because sometimes you spend more time without correlating the opportunity with current position of the
organization and its vision.
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Focused Innovation:
1. Focus on Organizations vision and mission.
2. First, create roadmap for Organization.
3. Evaluate strength, weakness, Opportunity and threat
(iterative SWAT in every three month is a most activity).
4. Create Focus Groups (FG) by bringing different internal
employees of same interest. Allow external partners to
participate and join focus group on which they were
interested.
5. Assign them few topics to research and find some new
solution and idea, which will bring new market
opportunity and bring profit to the Organization.
6. This approach increases interest level for employees
and build strong synergy.
7. Gives learning experience to some those who are not
familiar with the business to understand business and Organization.
8. Focus group should work with Organization’s Business Planning Team (BPT) to create business plan.
9. Once the focus group ready, they need to present it in front of innovation governance team (IGT) and later to
Organizational Steering Committee (OSC).
10. It reduces work for IGT, helps them to oversee more than one innovation initiation simultaneously.
Hybrid Innovation:
To make innovation more effective and flexible, the best option is to adopt hybrid approach by combining both open and
focused innovation approaches.
1. Allow individuals to bring new ideas.
2. Create different focus group by taking employees from multi discipline Organizations structure those shares subject of
interest.
3. Form a Core Focus Committee (CFC) by taking few individuals from each focus team.
4. Let the CFC along with idea contributor (IC) and innovation moderator (IM) from IGT decides to which focus group the
idea should go.
5. Once directed the idea to focus group, the focus group will analyze and evaluate the idea in more detail manner from
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different prospective and provide the recommendation to IGT, which will again evaluate the plan and send its
recommendation to OSC.
6. This is very systematic and incremental approach, with each move from one group to other, it can produce various
analysis and matrix, reduces work for IGT, with move from one phase to other it bring more detail about the idea and
its benefits and help in filtering out or help realizing importance of the opportunity.
3. Explore, Establish and Expand Model:
This is very simple approach which uses all the above explained analysis and models.
Explore: To explore own organization, market and competitor. “Visualize” and “Realize”
analysis explained above falls under it. More the Organization knows about itself, its
vision/mission, consumers and market evolution better it will be equipped with its plan and
preparation.
Establish: Once you pin-pointed Organizations current and future path, let’s focus on its
implementation and presentation. “Prioritize” mechanism mentioned above is part of establish
phase. How much customer acceptability your product/service is getting depends on how you
delivering and presenting to the customer. This is the phase where I believe Organizations most
of the departments and groups involved, so better coordination is the key.
Expand: Once you established your business and Organization in delivering products and
service effectively don’t sit back and relax, in market if something gets “established” that also
brings competition and more attack from competing business establishments. So once the
Organization reaches in its peak of sale or sees more competitions then you need to realize to
work on new opportunities, it can be bringing new products, remolding old products, reaching
out to new regions or segments.
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