by Robyn Bolton | Jun 26, 2024 | Innovation, Leadership, Strategy
It’s not easy leading innovation. Especially these days. You need to do more with less. Take risks while guaranteeing results. Keep up with competition through incremental innovation and redefine the industry with radical and disruptive innovation. It’s maddening. Until you find the Goldilocks Zone of adjacent innovation.
Adjacent Innovation: From Middle Child to Just Right
As HBS Professor Regina E. Herzlinger and her co-authors point out in a recent HBR article, the US is in the midst of an innovation crisis. The cost of lost productivity, estimated at over $10 trillion between 2006 and 2018, is a stark reminder of the economic consequences of a lack of innovation. This figure, equivalent to $95,000 per US worker, should serve as a wake-up call to the importance of innovation in driving economic growth.
The authors identify the root cause of this loss as the ‘polarized approach companies take to innovation.’ While companies focus on incremental innovation, the safe and reliable oldest child of the innovation family, the VCs chase after radical, transformative innovations, the wild, charismatic, free-spirited youngest child. Meanwhile, adjacent innovation – new offerings and business models fo existing customers or new customers for existing offerings and business models – is, like the middle child, too often overlooked.
It’s time to rediscover it. In fact, it’s also time to embrace and pursue it as the most promising path back to growth. While incremental innovation is safe and reliable, it’s also the equivalent of cold porridge. Radical or transformative innovation is sexy, but, like hot porridge, it’s more likely to scorch than sustain you. Adjacent innovation, however, is just right – daring enough to change the game and leapfrog the competition and safe enough to merit investment and generate short-term growth.
Proof in the Porridge: 4x the returns in ½ the time
Last year, I worked with an industrial goods company. Their products aren’t sexy, and their brands are far from household names, but they make the things that make America run and keep workers (and the public) safe. The pandemic’s supply chain disruptions battered their business, and their backlog ballooned from weeks to months and even years. Yet amidst these challenges, they continued to look ahead, and what they saw was a $6M revenue cliff that had to be filled in three years and a product and innovation pipeline covered in dust and cobwebs.
From Day 1, we agreed to focus on adjacent innovation. For four weeks, we brainstormed, interviewed customers, and analyzed their existing offerings and capabilities, ultimately developing three concepts – two new products for existing customers and one existing product repositioned to serve a new customer. After eight more weeks of work, we had gathered enough data to reject one of the concepts and double down on the other two. Three months later, the teams had developed business cases to support piloting two of the concepts.
It took 6 months to go from a blank piece of paper to pilot approval.
It took just another 12 months to record nearly $25M in new revenue.
Those results are more than “just right.”
Be Goldilocks. Pursue Adjacent Innovation
Every organization can pursue adjacent innovation. In fact, most of the companies we consider amongst the world’s “Most Innovative” have that reputation because of adjacent innovation.
How will you become your organization’s Innovation Goldilocks and use adjacent innovation to create “just right” growth?
by Robyn Bolton | May 14, 2024 | Press Mentions
by Robyn Bolton | Apr 21, 2024 | Innovation, Leadership, Tips, Tricks, & Tools
You are a natural-born problem solver. From the moment you were born, you’ve solved problems. Hungry? Start crying. Learning to walk? Stand up, take a step, fall over, repeat. Want to grow your business? Fall in love with a problem, then solve it more delightfully than anyone else.
Did you notice the slight shift in how you solve problems?
Initially, you solved problems on your own. As communication became easier, you started working with others. Now, you instinctively collaborate to solve complex problems, assembling teams to tackle challenges together.
But research indicates your instincts are wrong. In fact, while collaboration can be beneficial for gathering information, it hinders the process of developing innovative solutions. This counterintuitive finding has significant implications for how teams approach problem-solving.
What a Terrorism Study Reveals About Your Team
In a 2015 study, researchers used a simulation developed by the U.S. Department of Defense to examine how collaboration impacts the problem-solving process. 417 undergrads were randomly assigned to 16-person teams with varying levels of “interconnectedness” (clarity in their team structure and information-sharing permissions) and asked to solve aspects of an imaginary terrorist attack scenario, such as identifying the perpetrators and target. Teams had 25 minutes to tackle the problem, with monetary incentives for solving it quickly.
Highly interconnected teams “gathered 5 percent more information than the least-clustered groups because clustering prevented network members from unknowingly conducting duplicative searches. ‘By being in a cluster, individuals tended to contribute more to the collective exploration through information space—not from more search but rather by being more coordinated in their search,’”
The Least Interconnected teams developed 17.5% more theories and solutions and were more likely to develop the correct solution because they were less likely to “copy an incorrect theory from a neighbor.”
How You Can Help Your Team Create More Successful Solutions
You and your team rarely face problems as dire as terrorist attacks, but you can use these results to adapt your problem-solving practices and improve results.
- Work together to gather and share information. This goes beyond emailing around research reports, interview summaries, and meeting notes. “Working together” requires your team to take action, like conducting interviews or writing surveys, with one another in real-time (not asynchronously through email, text, or “collaboration” platforms).
- Start solving the problem alone. For example, at the start of every ideation session, I ask people to spend 5 minutes privately jotting down their ideas before group brainstorming. This prevents copying others’ theories and ensures all voices are heard. (not just the loudest or most senior)
- Invite the “Unusual Suspects” into the process. Most executives know that diversity amplifies creativity, so they invite a mix of genders, ages, races, ethnicities, tenures, and industry experiences to brainstorming sessions. While that’s great, it also results in the same people being invited to every brainstorm and, ultimately, creating a highly interconnected group. So, mix it up even more. Invite people never before invited to brainstorming into the process. Instead of spending a day brainstorming, break it up into one-hour bursts at different times of the day.
Are You Willing to Take the Risk?
For most of your working life, collaboration has been the default approach to problem-solving. However, this research suggests that rethinking when and how to leverage collaboration can lead to greater success.
Making such a change isn’t easy – it invites skepticism and judgment as it deviates from the proven “status quo” process.
Are you willing to take that risk, separating information gathering from solution development, for the potential of achieving better, more innovative outcomes? Or will you remain content with “good enough” solutions from conventional methods?
by Robyn Bolton | Apr 7, 2024 | Podcasts
by Robyn Bolton | Mar 19, 2024 | Innovation
Growth is the lifeblood of any organization, and the quest for growth opportunities is not just a strategic imperative. It is a fundamental necessity because the ability to identify and capitalize on opportunities is a game-changer for companies wanting to achieve sustainable success and stay ahead of the competition.
The challenge, however, is that not all opportunities are the same – some are head-smackingly obvious, while others are like trying to nail down JELL-O. Yet companies take a “one size fits all” approach to finding, developing, and capitalizing on them.
SEARCH when need to transform
What do you do when you need information but don’t know precisely what you need and certainly don’t know where to find it? You Google it or, in less-branded terms, you search for it.
When searching for growth opportunities, you’re looking for something but don’t know exactly what you need or where you’ll find it. Finding opportunities requires you to go beyond traditional market analysis and adopt a learner’s mindset to see ways to disrupt the status quo, challenge existing paradigms, and create new value propositions for your customers.
Searching is a creative process that entails investing in R&D, fostering a culture of intrapreneurship, and experimenting with new technologies. It requires a culture of creativity, experimentation, and agility to adapt to changing market dynamics. You have to be willing to be wrong on your way to being right, to move slowly so you can act quickly, and to throw out the timeline to harness the game-changing opportunity.
SEEK when you need to innovate
What do you do when you know what you need and generally where to find it? You seek it out – you go to where you think it will be, and, on the off-chance it’s not there, you pivot to Option B.
When you’re seeking growth opportunities, you have a target in mind but are not 100% sure how to hit it. Maybe you know you want to enter a new geography, but you need to figure out how to do it successfully and avoid the mistakes of previous entrants. Maybe it’s a new industry or category, but you must understand if and how to do it without disrupting your existing business model.
Seeking is both creative and analytical. You look for data and market intelligence, interview experts and individuals, analyze industry trends and explore untapped segments. It also requires you to stay open to surprises and new possibilities and take calculated risks to capitalize on emerging trends or consumer preferences. Like searching, it requires patience. Unlike searching, it respects a deadline.
STALK when you need to improve
Just like a lioness stalking a wildebeest, you do this when you see an opportunity and know exactly how to capture it. Yes, there will be zigs and zags along the way, and an unexpected competitor may pop up. But this is who you are and what you do.
When stalking opportunities, you bring the full value and power of your experience, expertise, resources, and capabilities to bear on an opportunity. This may happen when you’re operating and improving your core business. It may also occur after you’ve searched (and found) an opportunity, sought (and decided on) a strategy, and now you have the confidence to launch and scale.
Do Your Approaches Align with Your Goals?
Most companies say that they want to transform. Still, very few have the patience or intestinal fortitude to search because there is no Google for Transformation that produces the exact plan you need to transform successfully.
Companies also tend to stalk when they want to innovate, leaving opportunities to change the game and build sustainable competitive advantage on the sideline because they’re too uncertain or take too long.
Growth requires all three approaches – search, seek, and stalk – but only happens when your chosen approach aligns with your goals.
