Dear Friend,

Costas MarkidesToday we had an energetic lecture by Costas Markides, professor at LBS. The topic was innovation. (Check also the blog on Innovation). This is the base-line. The thing that is in the way of innovative behaviour is the assumptions. An assumption is a form of automatic behaviour that makes us efficient but that keeps us from looking further. If we want to be more innovative then we need to question, challenge those assumptions.

In the face of disruptive change established companies seem to have difficulties in responding. Why is that, one might ask.

When a company is confronted with a new product, it often does not see the risk. That is because the company focuses on another customer segment.

Suddenly the new product becomes -goodBut the customers become interested anyway, when the product is good enough. And when is that? When the product is good enough in terms of performance and superior in one element such as price, size, emotional benefits, …

So what a company should not do is to neglect that new offer. Instead, it should compare its product to what the customer wants. The problem of established companies is often that it over-engineers its product by adding features that make the product more expensive without having an advantage to the customer.

What – Who – How

We need to look at the what of the product, the who (customer) and the how of the product. We can be innovative in one of the three, but it’s better to be innovative in all three at the same time.

Don’t forget

  • strategic innovators do not discover new products. They simply redefine the who, the what and the how.
  • strategic innovations are not interesting to the customers of the established companies at the start.
  • strategic innovations tend to be disruptive to the established business
  • established companies look at these strategic innovations as threats, not as opportunities.

Solutions for this problems are to:

  • create a separate unit to experiment
  • accept that you do not have to be the first to launch a product. Start-ups are better at starting a product, but established companies are better at scaling up the new products. An example is P&G who decided to source 50% of innovations from outside the group.
  • When confronted with a new start-up or a new idea (1) check if the product is new, (2) if there is a big enough customer base that wants the benefit and (3) if the benefit is difficult to imitate.
  • Check also if you can reduce or eliminate other benefits, improve exiesting benefits or add new ones.
  • Create a context in which innovation becomes possible.

A brilliant ad by that is disruptive to established companies like Gilette.

If you want to read more about this:

Tomorrow there is an extra day of Costas Markides. I am looking forward to it.


Innovation – a Matter of Context

2 thoughts on “Innovation – a Matter of Context

  • 3rd February 2015 at 8:01 am

    Hi David,

    As an Apple fan, I may be biased. But I recognize Apple/SJ+ in these characteristics. True ?

    All the best,

    • 15th February 2015 at 4:50 pm



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