By: Dr. Carolin Durst, Scientific Director at ITONICS
A strategic innovation field, so called “opportunity spaces”, can be found by connecting all the dots between bits of diverse information you already know and putting them together in a way that breaks a pattern. It is an advantageous space to innovate and grow in and builds the starting point for the development of ideas for products, services, and new business models.
Having only one good idea won't help companies to survive.
If a company focuses only on incremental innovation and simple stage-gate ideation processes, it won’t keep up in the long run. Disruptive technologies or trends boost new innovations and enable business models that change the game of existing industries. In addition to transforming a whole industry, disruptive business models also push and promote paradigm changes. When talking about innovation, existing companies should therefore be entitled to create those breakthroughs by themselves.
A problem - many companies lack the willpower to undergo the whole innovation journey.
More than ever before, managers have to put an extra effort into their innovation management and show further discipline in creating a sustainable innovation culture. They really have to mean it. Yet, this also stands for hard work. Lacking the necessary resources, being permanently overwhelmed by too much information and constantly feeling the pressure to focus on operating and performing, many of them do not know how to confront and tackle this topic in the right way. Only the fewest companies are willing to pursue the whole innovation journey and embark on the adventures it may involve. The majority, however, is still experiencing the “Innovator’s Dilemma”, which means relying too much on old successes and thereby risking to get run over soon by digital disruptions.
Is there a pattern for disruption and breakthroughs?
There is no instruction or construction toolkit for disruption since disruptions come from companies playing the innovation game in a fundamentally different manner. Although many disruptive companies are based on novel technologies, it does not automatically mean commercial success. The ability to break technology down to a level where it becomes relevant for a company and for the customers can be as essential as the general fit into a sociotechnical system. In many cases, the technology of disruptive companies is quite trivial. What really matters is the total package. Thus, instead of focusing on making things better, successful companies focus on the (hidden) needs of customers. However, there is one thing they all have in common: being constantly on the move and trying to spot new opportunities, which are then turned into money in an extraordinary speed.
Identifying opportunities - how and where to start?
Instead of feeling powerless or even threatened by the current developments, companies have to go out and search for their own disruptive innovation power. This power can be found within opportunity spaces. Within the innovation process, it defines a company's “Where to play?” and starts much earlier than the ideation process. For this purpose, an integrated innovation management approach is more comprehensive than the conventional stage-gate process. It defines a business domain in which future growth is possible or even necessary. When searching for new opportunities, it basically means to be able to simultaneously create ideas as part of the innovation management on the one hand and to foresee markets and potentials, on the other hand. The goal is the establishment of a constant stream of ready-to-market innovations always aligned with future developments. The heart of innovation lies in spotting new markets and in revealing unmet customer needs in existing markets.
Opportunity spaces are shaped by a company’s inside and outside world.
Opportunity spaces are always two-sided. It requires self-reflection on the one hand and understanding the outside world and drivers of change on the other hand. What really counts is revealing unmet customer needs and demands behind those trends, e.g. the rising sharing economy industry, considered as an industry of the future, is pushed mainly by a change in consumer behaviors combined with technological advancements. Besides these general developments and continuities, it is important to gain a deep understanding of technological developments - which resources does a company need to make use of a certain technology, how can new technologies address the identified customer needs or which companies do already apply this technology? The other side of the opportunity space is shaped by the internal potential of a company, i.e. the internal capabilities in terms of employees’ knowledge, financial resources or the overall willingness to change.
Opportunity spaces can be found by referring to big data and data mining.
The true crux is breaking it all down to a relevant and practical level. Therefore, it needs a handful of intrapreneurs, experts, and industry insiders - an innovation team, which combines the findings of those two worlds, inside and outside, and reveals probable gaps or potential opportunities. Yes, this is a mammoth task! It requires a proactive, hands-on, creative, disciplined, and motivated team to find these spots. Since we are living in a world where big data is ubiquitous, this task cannot be done only by a team of humans. Instead, it needs a supportive, computer-based tool to recognize those opportunities. Especially when it comes to technology monitoring and management, a huge amount of quantified data has to be analyzed. A data mining tool such as visualization analytics or an automated scanning process showing correlations, helps to find relevant signals for opportunity spots.
Eventually, it should be noted that an opportunity space in a broader sense is always a match of the outside and inside world of a company done by an innovation team and supported by a smart tool.
About the author: Dr. Carolin Durst (born 1979) is an associate professor at the Friedrich-Alexander University of Erlangen-Nuremberg, Scientific Director at ITONICS GmbH and also a mother of a four-year-old son. At ITONICS, she oversees the methodology and product development activities from a scientific angle and also looks after business development. Her motto: it never gets boring!