Are your solutions too convergent with the rest of the industry? Take a look at the Innovation Radar

In a world of slower market growth, globalisation and increasing commoditization, all companies struggle with how they set themselves apart from the typical convergent ‘me-too’ offerings so prevalent in industries. As such they look to innovation to help them but tend to take a myopic view of innovation across dimensions of R&D and New Product development.

Mohanbir Sawhney, director of Northwestern's Kellogg School of Management's Center for Research in Technology and Innovation, and Kellogg fellows Robert C. Wolcott and Inigo Arroniz have compiled data on the innovation habits of companies such as Boeing, eBay , DuPont, Microsoft, Motorola and Sony . The results of their research show that, rather than taking a limited view, companies can innovate across many different dimensions, creating far more opportunities to achieve competitive advantage.


The radar features four major dimensions that serve as business anchors:
1. Offerings a company creates (WHAT).
2. Customers it serves (WHO).
3. Processes it employs (HOW).
4. Points of Presence it uses to take its offerings to market (WHERE).

Spread over these 4 main dimensions, companies can innovate their businesses far broader in scope than product or technological innovation: a company can actually innovate along any of a total of 12 different dimensions:

1. Offerings.
2. Platform.
3. Solutions.
4. Customers.
5. Customer experience.
6. Value capture.
7. Processes.
8. Organization.
9. Supply chain.
10. Presence.
11. Networking.
12. Brand.

The innovation radar can help to broaden the innovation focus in companies and the important point, as the authors define it, is that business innovation is “the creation of substantial new value for customers and the firm by creatively changing one or more dimensions of the business system.” This implies that business innovation is about new value, not new things, that it comes in many flavors, and that it is systemic, requiring careful thought to be given to all aspects of a business.

The authors point to the iPod as an example of innovating in multiple dimensions. In this case, Apple engaged not only in product innovation, but also in terms of customer solution, offering, platform, supply chain, presence, networking, and brand. Other examples, including innovations by Nissan Motor Co., Enterprise Rent-A-Car, Virgin, and Edmunds.com, illustrate the multiple paths that innovation can take.

But companies can generate more value by thinking of the dimensions of innovation as interconnected within a business system. The authors believe the innovation radar can help companies compare their current innovation strategy to that of competitors, then identify opportunities and prioritize dimensions in terms of where to focus.

Go to http://sloanreview.mit.edu/smr/issue/2006/spring/14/