Our world is now no longer local and linear. It’s global and exponential, thanks to technological breakthroughs. Organizations can no longer just consider close competitors as their greatest threat. They are starting to fear the startups, which, although they live in metaphorical garages and comparatively few take off, have an innovation power that established organizations only dream of possessing.
Established organizations have almost all necessary resources — money, customers, data, employees, suppliers, partners and infrastructure — slotting them in a more favorable position to transform new ideas into value-creating, successful services. However this is often not the case. They tend to do one of two things when confronting the changing world: Either dismissing anything that is new and different because it’s too difficult to fit into existing strategies, or they recognize that they should explore new strategies, but don’t do it thoroughly, ambitiously and strategically enough. Therefore, when it comes to innovation in a modern age, these organizations need a new approach.
Innovation can be divided into three different routes:
Optimizing. With optimizing innovation, companies improve on the existing. For instance, when Gillette adds a fourth blade to its three-blade razor, it’s optimizing. Continuous optimization is essential, however it is not enough for an organisation to remain as a leader. Just like the diminishing law of return, the more blades are added to the razor, the less value each new blade creates. A point for all organisation to note is that when marketing of the product becomes the most significant aspect, or that excessive spending is funneled to identify how to generate new payoffs communicating what’s virtually the same product, then there is no optimization options left for the product or service.
Augmenting. Augmenting innovation is about upgrading your core, whether it’s a case of the products itself or the internal processes. Most digital transformation processes in organizations fall under the category of augmenting innovation. It can mean going from analog to digital. This can be achieved by new upgrades as there will always be new technological achievements for better solutions. The next phase after moving into the digital world could be implementing artificial intelligence at the core of the organization, which many forward-looking companies are focusing on these days.
Mutating. This is where you’re no longer improve the past, as with optimizing innovation, or preparing the future, as with augmenting innovation, but where you invent the future. With mutating innovation, you’re working to challenge what currently exists. The business that maintains, or exceeds, its level of success 10, 20 and 30 years from now will have mutated and look significantly different than it does today.
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