So we decided to innovate. Great! Where do we begin? How do we structure our innovation portfolio? There are so many possibilities! AI is definitely hot right now. But so are advances in green technology – maybe that’s our ticket? I heard there’s stuff happening with biotech, too. And I bet there are some face-melting breakthroughs in metallurgy…
With so much happening everywhere all at once, it could be challenging to orient ourselves and innovate intentionally – or at least with enough intention to convince ourselves that we’re not placing random bets. A better question: what spaces do we not invest into when innovating?
Here’s a super-simple framing that I’d found useful in choosing the space to innovate. It looks like a three-step process.
First, we need to know what our embodied strategy is. We need to understand what our capabilities are and where they will be taking us by default.
This is important, because some innovation may just happen as a result of us letting our embodied strategy play out. If we are an organization whose embodied strategy is strongly oriented toward writing efficient C++ code, then we are very likely to keep seeing amazing bits of innovation pop out in that particular space. We will likely lead some neat C++ standards initiatives and invent new cool ways to squeeze a few more drops of performance out of the code we write.
As I mentioned before, embodied strategy is usually not the same as stated strategies. I know very few teams who are brutally honest with themselves about what they are about. There’s usually plenty of daylight between what the organization states about where they’re going and where they are actually going. The challenge of step 1 is to pierce the veil of the stated strategy.
As you may remember from my previous essays, this understanding will also include knowing our strategy aperture. How broad is our organization’s cone of embodied strategy?
At the end of the first step, we already have some insight on the question above. Spaces well outside of our cone of embodied strategy are not reachable for us. They are the first to put into the discards pile. If we are an organization whose strengths are firmly in software engineering, attempting to innovate in hardware is mostly like throwing money away – unless of course we first grow our hardware engineering competency.
The second step is to understand our innovation frontier. The innovation frontier is a thin layer around our cone of embodied strategy. Innovation ideas at the outer edge of this frontier are the ones we’ve just discarded as unreachable. Ideas at the inner edge of the frontier are obviously going to happen anyway: they are part of the team’s embodied strategy.
It is the ideas within this frontier that are worth paying closer attention to. They are the “likely-to-miss” opportunities. Because they are still on the fringe of the embodied strategy, the organization is capable of realizing them, but is unlikely to do so – they are on the fringe, after all.
It is these opportunities that are likely going to sting a lot for a team when missed. They are the ones that were clearly within reach, but were ignored because of the pressing fires and general everyday minutiae of running core business. They are the ones that will disrupt the business as usual, because – when they are big enough – they will definitely reshape the future opportunities for the organization.
The innovation frontier is likely razor-thin for well-optimized and specialized organizations. The more narrow our strategy aperture, the less likely we will be to shift a bit to explore curious objects just outside of our main field of view.
In such cases, the best thing the leader of such an organization can do is to invest seriously into expanding their innovation frontier. Intentionally create spaces where thinking can happen at a slower pace, where wilder ideas can be prototyped and shared in a more dandelion environment. Be intentional about keeping the scope roughly within the innovation frontier, but add some fuzziness and slack to where these boundaries are.
The third step is to rearrange the old 70/20/10 formula and balance our innovation portfolio according to what we’ve learned above:
- Put 70% into the ideas within the innovation frontier and the efforts to expand our innovation frontier.
- Put 20% into the ideas that are within the strategy aperture.
- Just in case we’re wrong about our understanding of our embodied strategy, put 10% into the ideas that are at the outer edge of the innovation frontier.
And who knows, my law of tightening strategy aperture could be proven wrong? Perhaps if an organization is intentional enough about expanding its innovation frontier, it could regain its ability to see and realize the opportunities that would have been previously unattainable?
Wait, did we forgo the whole notion of timelines in our innovation portfolio calculations? It’s still there, since the cone of embodied strategy does extend in time. It’s just not as significant as it was in the old formula. Why? That’s a whole different story and luckily, my friend Alex wrote this story down just a few days ago.