Innovation

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Mastering the ‘Name Your Product Category’ Game

When is the best time to enter a new industry? As it turns out, understanding the product category dynamics in an emerging industry and when a dominant category label has been introduced are important to identifying the “window of opportunity” to enter. Dominant category labels typically are introduced right before the industry starts a phase of rapid growth and consolidation. Companies would do well to track category labels before introducing a product in a nascent industry.

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Adapting to the Sharing Economy

Instead of buying and owning products, consumers are increasingly interested in leasing and sharing them. New strategies can help companies embrace this “collaborative consumption.” For instance, Ikea and Patagonia have found that helping people resell or give away products both enhances the companies' reputations and helps customers create space in their homes for new Ikea and Patagonia items. Companies have also found value in embracing opportunities to share existing assets and capacities.

Image courtesey of Quicken Loans Inc.

Embrace Your Ignorance

The overconfidence of presumed expertise is counterproductive. Instead, data trumps intuition.
Serious innovators take data seriously, argues Michael Schrage: “Organizations may be confident they know their customers, but they’re very likely to be overconfident. Most executives aren’t nearly as smart, perceptive or customer-centric as they believe." Successful innovators, he writes, “have the courage of their curiosity” and run experiments that challenge their assumptions.

Image courtesy of Flickr user Mikel Ortega. https://www.flickr.com/photos/mikelo/4056467981
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The Key to Business Success: ‘Stringing Multiple Opportunities Together’

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New research looks at the strategies executives use in capturing new growth opportunities. “Resist jumping at the first potential opportunity,” write Christopher B. Bingham (Kenan-Flagler Business School), Nathan R. Furr (Marriott School of Management) and Kathleen M. Eisenhardt (Stanford University). Instead, evaluate whether one opportunity will it set you up for future ones — what the authors call “sequencing opportunities.” They write: “Sustained business success appears to depend not just on capturing one opportunity but also on stringing multiple opportunities together.”

Image of Shanghai courtesy of Flickr user John Chandler.  https://www.flickr.com/photos/johnchandler/9268261356
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The Surprising Effectiveness of “Assembly Line” Innovation

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Unconventional approaches to innovation are speeding up new product development, making R&D faster and cheaper. In China, companies are embracing an industrialized approach to research that allows them to complete projects as much as two to five times faster than they did before. “These developments have potentially huge implications for how companies should think about global competition and whether they need to rethink and reengineer their established innovation and product development processes,” the authors write.

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Innovation Lessons From China

China is becoming the best place to learn how to make ideas commercially viable, even as many multinational companies are growing increasingly wary of doing business there because of concerns about unfair competition and theft of intellectual property. Chinese companies excel at cost reduction, accelerated product development and networked production — and know how to assess what they can do and quickly find partners to fill the gaps.

Procter & Gamble’s Connect + Develop open innovation program nurtures collaboration with individuals and companies globally to develop new ideas and products. Image from Procter & Gamble’s Connect + Develop video http://www.youtube.com/watch?v=SAvwst8FAuk.
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How Procter & Gamble Uses External Ideas For Internal Innovation

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Using its own version of open innovation called Connect + Develop, Procter & Gamble is now accessing externally developed intellectual property to accelerate internal innovation. Its Live Well Collaborative, for instance, was founded by Procter & Gamble and the University of Cincinnati with the goal of specializing in research and development of products and services for the 50+ market.

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How to Win With a Multisided Platform Business Model

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“Increasing awareness of business models and the spectacular MSP successes from the past decade have prompted many entrepreneurs and investors to attempt building or identifying ‘the next eBay,’” writes Andrei Hagiu, an associate professor in the strategy group at the Harvard Business School. But successful MSPs such as PayPal, eBay and Alibaba are the exception rather than the rule. Haigi offers four observations about what new companies can do to position themselves to be among the winners rather than the losers.

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The Dandelion Principle: Redesigning Work for the Innovation Economy

People who are “different,” either behaviorally or neurologically, can add significant value to companies. The authors, who studied the practices of innovative organizations and the experience of a Danish company working with people with autism, argue that companies can benefit from adjusting work conditions to embrace the talents of people who “think differently” or have “inspired peculiarities.” “Managing innovation is less about averages and more about understanding outliers,” write the authors.

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Accelerated Innovation: The New Challenge From China

Chinese companies are opening up a new front in global competition. It centers on what the authors call accelerated innovation — that is, reengineering research and development and innovation processes to make new product development dramatically faster and less costly. The new emphasis is unlikely to generate stunning technological breakthroughs, but it allows Chinese competitors to reduce the time it takes to bring innovative products and services to mainstream markets. It also represents a different way of deploying Chinese cost and volume advantages in global competition.

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Image courtesy of the World Economic Forum/Flickr.

Creating Societal Benefits and Corporate Profits

The odds of launching a new business that creates value for both the company and the public can be improved with good planning. An in-depth analysis of how four companies created for-profit initiatives that also have high societal value suggests that each followed a similar step-by-step process to achieve what the researchers call synergistic value creation. Those steps include establishing cross-business incubators and installing multi-perspective monitoring systems.

Image courtesy of Flickr user squeaks2569.
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“Diverge Before You Converge”: Tips for Creative Brainstorming

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A new integrative process for idea generation uses approaches drawn from education, business model design and more, and breaks down the process of creativity into seven distinct steps. One of the most intriguing steps is number five, “diverge before you converge.” The idea behind it is that the most effective brainstorming processes draw from both individual thinking and group discussion, with individuals coming together only after independent idea generation.

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Luminar Insights

Facing headwinds from a shifting media industry, executives at Spanish-language broadcasting company Entravision recognized the need to innovate their business model. To get there, they created Luminar, a big data insights division that utilizes about 2,000 external data points to deliver customized, transaction-based insights to marketers about Entravision’s Latino audience. The fastest-growing U.S. demographic, Latinos have amassed buying power worth more than a trillion dollars annually.

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Video: Leveraging Analytics to Transform a Traditional Broadcast Business

Using big data technology, Luminar is helping to transform its parent company, Entravision, beyond its broadcasting roots. With a data store of 50 million Latino adults with transactional records from 2,000 sources, Luminar has insights on 65% of the US Latino adult population. Luminar is able to provide new, relevant insights to advertisers and marketers interested in reaching the Latino consumer, and in the process change Entravision from a broadcast company to an insights company.

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Strategic Decisions for Multisided Platforms

Some of the fastest growing businesses in recent years — companies such as Facebook, eBay and LinkedIn — are “multisided platforms” that enable interactions between two or more sets of participants. The spectacular success of some of these MSPs has caught the attention of many entrepreneurs and investors. But building a multisided platform business requires savvy decisions on everything from design to governance to pricing.

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How to Position Your Innovation in the Marketplace

Should a new product or service launch at the high end of the market and move downward or at the low end and move up? In truth, there’s no one-size-fits-all approach for entering the market, but a new research-based framework helps identify the best strategy for a particular product or service. The two key questions to ask: Is the basic functionality of the new offering better or worse than that of existing competitive products? And how groundbreaking are the novel attributes of the new product?

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The Discipline of Creativity

Managers can’t afford to rely on haphazard, hit-or-miss approaches to idea generation. Ideas must fit with an organization’s strategy or take it in a new, purposeful direction, and they must solve real problems for stakeholders. A new seven-step process for idea generation is designed to help managers understand their problems deeply, generate tangible ideas for solutions and translate those ideas into action.

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How to Revitalize Your Digital Business Model

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What should a company do if its digital business model isn’t working very well? Peter Weill, chairman of the MIT Sloan School of Management’s Center for Information Systems Research, has created some principles to revamp the fortunes of a digital business. His framework focuses around three planks: content, experience and platform. Executives should decide which plank offers competitive advantage and develop a world-class version of it online, partnering with others for the other two planks.

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A Little Competition Brings Out Astonishing Innovation

Contests can be big motivators for getting people to bring all their creativity to the table. The Oil Cleanup X Challenge, for instance, shows how an organization can generate new solutions to a known problem. Companies vied for a $1.4 million prize in 2011 to come up with a product to recover oil from the surface of the sea. The winner, Elastec/American Marine, is now preparing to bring its winning design to market.

Image courtesy of Astrobotic Technology.

Spurring Innovation Through Competitions

Alan MacCormack, Fiona Murray and Erika Wagner examine the phenomenon of corporations using innovation contests to attract ideas from beyond their organizations. They write that companies increasingly “are discovering that many of the very best ideas lie outside their organizations, in an ecosystem of potential innovators who possess wide-ranging skills and knowledge.”

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