Last week I discussed the four benefit criteria of innovation. This post will focus on the impact of “innovation speed”. But don’t forget: Innovation is not the general approach (in the sense of “one tool fits all”) to enter competition; when focusing on innovation your organization should consider issues like complexity, costs and strategy. But in this post I will put an emphasis on fast innovations.
If you are in a dynamic competition or in a situation with shorter product life cycles fast innovations can be an approach to stay ahead of your enemies. Rapid innovations can help your organization to exploit your core competencies more effectively. Using this approach you can benefit from 5 different aspects:
Expanding current markets. With fast innovations your organization can be able to expand mature markets by attracting new uses and new users. Expanding mature markets is less risky than enter markets which are completely new to your organization, since you understand the basic principles of this market.
Creating new markets. In the case that your organization has excellent and extraordinary capabilities (and some big wallets to take risks) you should focus on new markets in order to exploit your capabilities. You might have those capabilities in terms of technical aspects and /or marketing. In this case you should try to create new markets.
Penetrating markets. This is another option for rapid innovators which want to change the rule of the competition. When penetrating a market your organization can compete directly with other player (e.g. by minor product modifications). Another option (in in some cases the better one) is to change this approach dramatically and to focus on another aspect in terms of costs, quality or even design. A good example for this is the IPod, that arrived the mp3-player market late. But a focus on design and life style in combination with a different use concept opened a new option to penetrate the market.
Defending market share. Don’t go for major breakthroughs all the time. There might be situations in which focussing on continually updates is the better approach to win the race. If your organization has the capabilities to generate a continuous stream of small improvements (and your competitors focus on THE innovation) this aspect can be your innovation approach.
Reposition your business. In some cases (don’t forget the complexity issue) you can transfer the application of your core capabilities into new markets. This transfer might shift the focus of your business into a new industry or field of business. It is more risky, hence your organization should have enough financial resources to cover risks when entering new industries.