Innovation that is done in the context of business strategy tends to be more focused, efficient, and business-model relevant. Innovation should not be viewed as a way to take the organization off its strategic track and in new directions. Rather, innovation should be applied in a way that makes the current strategic track more successful and profitable…true growth.
Yet the tendency is to view this approach as incrementalism and not disruptive enough in the Christensen sense. Some would say that starting with your current situation is not bold and is risk adverse. “We’re not thinking outside the box” is the usual incantation at this point. Instead, there is a preference to chasing “white space” and “open source” innovation as a source of growth. Some executives prefer the lure of white space and opportunity spotting, and they readily acknowledge that it is “low yield by design.” The Scarcity Principle tends to make these opportunities seem more valuable than they really are. White space chasers position themselves as fighting the heroic fight. Resources come pouring in.
The best Fortune 100 companies pursue high yield, organic innovation efforts… not “low-yield-by-design” efforts. High yield innovation comes from tying innovation directly to the strategic marketing context of the firm. Ideas generated this way help the organization stretch its model in a way that is achievable and internally-sellable.
How do you tie innovation to strategy? Professor Christie Nordhielm from the University of Michigan has developed what I consider the best single contribution to marketing thought since the 4P’s. Her Big Picture framework of the marketing management process provides the context for innovating across the entire business model. Applying systematic innovation tools to each aspect of her Big Picture model can yield amazing insights at both the strategic and tactical levels of the business. It is the intersection of these two ideas…Big Picture Strategy and Systematic Inventive Thinking…that will yield consistent, profitable results. Innovation follows strategy…not the other way around.
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Hi Drew - I'm curious how this book relates to the concept of open innovation (not open source). Would the big picture framework apply to platforms that cut across business models - or across industries? Or is it intended primarily for established companies looking to incrementally innovate?
Also, are you familiar with Larry Keely of Doblin? Most firms are fighting like mad to compete on product innovation but Larry will unequivocally say that’s the wrong place to be and it's why innovation efforts have such a pathetic hit rate. (He calls it the Kabuki Dance of Innovation.) His research suggests that many other types of innovations, from changes to channels or brands or customer experience, to changes in processes or service systems or business models, are more likely to give sustained advantage.
Christine, this is an intriguing idea, and a very complex posting. I am not a fan of open SOURCE, but I need to get more comfortable with open innovation. Innovation is a team sport, and the collaborative idea should work. I have to find a way to experiment with it. Perhaps you can suggest some ideas here.
The Big Picture model does not address this idea of cutting ACROSS business models. What Big Picture provides is strategic context for innovation within ONE business unit. I would not say that it is just for incremental innovation. I just did an experiment with it last week at a prominent company outside of J&J, and the results were solid. Very much non-incremental results.
I am familiar with Larry and his work and teachings, but have not met him yet. I hope to at some point. He is right on the mark with directing innovation efforts at more than just products. THAT is what Big Picture brings....a structured way to innovate across all aspects of marketing, not just new products.
Thank you for engaging.
In principle I agree with your core concept - that innovation should follow strategy. However, one should be exceptionally cautious that the strategy is defined well - that means both in terms of your current business model - and the potential for new business models.
All too often strategy and business model are essentially the same thing. For example - becoming the crm of choice for small businesses.
This is especially dangerous in mature industries - in particular those that own their market.
There are two primary reasons to innovate - in business terms:
1) Capture a bigger market share
2) Diversify your revenue base
If your strategy is too narrow you cannot do #2. If you cannot do #2 - even in the earliest days of a startup - you risk missing a more valuable business opportunity. If you already own your market #1 has a limited impact on growth.
The trick here - as I always say - is knowing which innovations are worth investing in - and which you walk away from.
Brian, I agree with your point of view, especially the last one. What is neat about The Big Picture framework is that it can serve as a filter for innovations that are created using a systematic process (or any other source for that matter). Imagine two or three hundred ideas on your plate. Imagine plotting each idea against its place within a strategic framework such as Big Picture. This lets you see instantly where you want to focus your development efforts.