Mapping Innovation

1. Innovation is a Complex, Multifaceted Process, Not a Single Event

Innovation is never a single event, and that rather than following a linear path, effective innovators combine the wisdom of diverse fields to synthesize information across domains.

Discovery, engineering, and transformation. Innovation unfolds through three distinct phases:

• Discovery: Uncovering new insights or phenomena, often through basic research
• Engineering: Developing practical solutions based on discoveries
• Transformation: Implementing solutions to create real-world impact

Time and collaboration. Significant innovations often take decades to materialize and involve numerous contributors:

• Example: Penicillin's journey from Fleming's 1928 discovery to widespread use in the 1940s
• Example: Personal computing's evolution from 1968 "Mother of All Demos" to mainstream adoption in the 1990s

Diverse expertise. Successful innovation requires combining knowledge from multiple fields:

• Example: Darwin's theory of evolution synthesized insights from biology, geology, and economics
• Example: Einstein's theory of relativity integrated physics with philosophical concepts

2. Combination of Ideas Drives Breakthrough Innovations

If a problem is difficult enough, it needs to borrow from multiple fields of expertise. Innovation, more than anything else, is combination.

Cross-pollination of ideas. Breakthroughs often emerge when concepts from different domains intersect:

• Watson and Crick's discovery of DNA structure: Combined biology, chemistry, and x-ray crystallography
• Google's PageRank algorithm: Applied academic citation principles to web search

Diverse teams outperform. Research shows that teams with varied expertise produce higher-impact work:

• Highest-impact scientific papers combine deep expertise in related fields with insights from unexpected areas
• Interdisciplinary collaboration increases likelihood of solving complex problems

Overcoming mental models. Combining ideas helps break free from established paradigms:

• Example: Einstein's ability to question accepted notions of space and time
• Importance of exposing oneself to diverse fields and perspectives to foster innovative thinking

3. Map the Innovation Space to Choose the Right Strategy

To innovate effectively, you have to choose the right tool for the right job.

The Innovation Matrix. A framework to guide innovation strategy based on two key questions:

1. How well is the problem defined?
2. Who is best placed to solve it?

Four quadrants of the Innovation Matrix:

1. Basic Research: Poorly defined problem and domain
2. Breakthrough Innovation: Well-defined problem, poorly defined domain
3. Sustaining Innovation: Well-defined problem and domain
4. Disruptive Innovation: Poorly defined problem, well-defined domain

Matching strategies to challenges. Different approaches for each quadrant:

• Basic Research: Fundamental exploration, often government or academic-funded
• Breakthrough Innovation: Multidisciplinary teams, prizes, open innovation platforms
• Sustaining Innovation: Traditional R&D, incremental improvements
• Disruptive Innovation: Lean Startup methods, business model experimentation

Building an innovation portfolio. Organizations should pursue a mix of strategies across quadrants:

• Example: Google's 70/20/10 rule balancing core business, adjacent opportunities, and moonshots
• Importance of adapting the portfolio over time as markets and technologies evolve

4. Business Model Innovation is Crucial for Disruptive Success

No business plan survives first contact with the customer.

Beyond product innovation. Disruptive innovations often require new ways of creating, delivering, and capturing value:

• Example: Xerox's shift from selling to leasing copiers revolutionized the industry
• Example: Uber's platform model disrupted traditional taxi services

Lean LaunchPad approach. Key principles for business model innovation:

1. Customer Development: Validate assumptions through real-world testing
2. Minimum Viable Product (MVP): Create quick, low-cost prototypes to gather feedback
3. Pivot: Be willing to change direction based on market response

Iterative process. Business model innovation requires continuous experimentation and refinement:

• Example: Votizen's evolution from social network to activist platform
• Importance of identifying and testing core assumptions early

5. Open Innovation Accelerates Problem-Solving and Discovery

Given enough eyeballs, all bugs are shallow.

Democratizing innovation. Open platforms enable diverse contributors to tackle complex problems:

• Example: Linux and Apache Foundation's success in creating industry-standard software
• InnoCentive platform connecting organizations with global problem solvers

Complementing internal capabilities. Open innovation allows companies to tap into external expertise:

• Procter & Gamble's Connect + Develop program led to breakthrough products like Swiffer
• IBM's embrace of open-source communities to accelerate innovation

Ecosystem approach. Success comes from fostering collaborative networks:

• Creating platforms that attract diverse participants
• Balancing openness with the ability to capture value

6. Balance Core Business with Future Opportunities: The 70/20/10 Rule

You've got to think about big things while you're doing small things, so that all the small things go in the right direction.

Three horizons of innovation:

1. Horizon 1 (70%): Core business, sustaining innovations
2. Horizon 2 (20%): Emerging opportunities, adjacent markets
3. Horizon 3 (10%): Exploratory initiatives, long-term bets

Resource allocation. Balancing present and future:

• Majority of resources dedicated to improving and expanding core business
• Smaller investments in adjacent opportunities and exploratory projects

Google's approach. Integrated innovation across horizons:

• Core products (e.g., Search, Maps) receive continuous improvement
• Adjacent projects (e.g., Gmail, Android) emerge from 20% time
• Moonshots (e.g., self-driving cars) pursued through X division

7. Large Organizations Can Innovate at Scale Through Strategic Reinvention

Yesterday we pioneered for today; today, we are pioneering for tomorrow.

Leveraging unique assets. Large organizations can innovate by capitalizing on their strengths:

• Example: IBM's repeated reinvention leveraging research capabilities
• Microsoft's pivot to cloud services building on enterprise software expertise

Long-term perspective. Established firms can invest in fundamental innovations:

• Ability to pursue multi-year or multi-decade research initiatives
• Example: IBM's investment in quantum computing

Cultural transformation. Innovation at scale requires shifts in organizational mindset:

• Example: Lou Gerstner's transformation of IBM from product-centric to solution-oriented
• Importance of fostering collaboration and embracing open innovation

8. Leverage Platforms to Access Ecosystems of Talent, Technology, and Information

No matter who you are, most of the smartest people work for someone else.

Shift in competitive advantage. From controlling value chains to orchestrating networks:

• Reduced search costs enable easier access to external resources
• Power of platforms in connecting diverse participants

Ecosystem strategies. Leveraging platforms for innovation:

• Talent: Platforms like Upwork connecting organizations with global talent
• Technology: Cloud platforms providing access to cutting-edge tools and services
• Information: Data-sharing ecosystems enabling collective intelligence

Platform design principles:

• Create value for all participants
• Reduce friction and transaction costs
• Foster network effects to increase utility as the ecosystem grows

9. The Future of Innovation Requires Collaborative Problem-Solving

We teach people that everything that matters happens between your ears, when in fact it actually happens between people.

Grand challenges ahead. Complex problems requiring multidisciplinary approaches:

• Climate change, healthcare, energy storage, advanced manufacturing

New models of collaboration. Bridging academia, industry, and government:

• Example: SEMATECH consortium reviving U.S. semiconductor industry
• Joint Center for Energy Storage Research (JCESR) developing next-generation batteries

Skills for the future. Emphasis on teamwork and empathy:

• Importance of social sensitivity and effective communication in group problem-solving
• Balancing human creativity with machine intelligence

Innovation policy. Government role in fostering innovation ecosystems:

• Creating hubs and networks to connect diverse stakeholders
• Supporting basic research while facilitating technology transfer

Last updated: August 9, 2024