3D Innovation Model

Working with companies that fall behind on being competitive, have outdated
distribution models or who have lapsed in reinventing their product lines is
often where Revenue Side consulting is focused. Companies are focused on the
day to day operations. They give short attention to the more strategic issues.
When this happens, senior management finds themselves scrambling to reengage
with the customer and market. The consultant’s challenge is to reinvigorate the
company and introduce innovative thinking to all aspects of the engagement. To
do this, models are required that help drive new thinking. These models guide
the consultant’s thinking and will yield new ideas.

The models become almost philosophical. They become a prism in which to view the actions
of the company. These innovation paradigms force everyone in the client to
think in integrative and comprehensive terms. They should be all encompassing
to provide latitude for employees to participate. Employees can add to the
ideation and strategic thought. Senior managers can see the thought process and
internalize the outcomes. What is necessary is not only to have innovative
ideas but to bring the client along in the journey.

We have all worked in companies that make decisions which make no sense to the outsider
who did not participate in the formulation of the decision. Disbelief is
replaced with agreement when the process getting to the decision is explained.
Humans naturally need to participate in the process of decision making in order
to fully accept the final outcome. “Running over the hill”, that is outpacing
your team, is not good management. Everyone must participate. To this end, the
following model explanation seeks to inform the consultant and the client on a
process that yields innovative ideas and solutions.

This is not a cookie cutter process with defined steps. Rarely does true innovation
come with such constraints. This is a way of thinking and learning while in a
client. This is a mental exercise which, if not providing a solution, certainly
brings teams and clients further along in the process. This is a recipe of
actions that when mixed together provide countless ways of coming to new ideas,
very much like 3 chords can do in music.

The approach involves the mixing of three dimensions of ideation. Each must be
considered. Each can be considered in the context of companywide strategies or
departmental processes. The quality consultant plays these dimensions in their
head every day, all day. Constantly juggling the results and remixing them will
allow a stream of ideas, some probably not good and some truly different and
market making.

The development model above shows the three dimensions of investigation. The X axis
looks at emerging trends in the market in technology and scientific knowledge.
The Y axis looks at the context of the technology as it relates to markets and
client needs. The Z axis determines the path of development for the ideas
generated by the cross section of X and Y. The client may have their own
process for development or they may require a combination of leveraging their
assets with partners or external capital. The combination of these dimensions
can drive new ways of thinking about innovations.

Let’s look at each one in detail and then look at some actual examples and ideate a bit to
see what falls out.

The X axis

There is an old saying in innovation: “Put yourself in front of the train”. That is,
look for emerging trends that offer the best risk/return probabilities in
developing new product ideas or strategic directions. The consultant must
always be at the forefront of knowledge on emerging trends affecting their
clients. He/She must be attuned to changes in market inflections. The
consultant must be looking ahead for the client. Remember it is the client that
must operate day to day. The consultant must have LIDAR (metaphorically) for
the client, continuously seeing way ahead to what might affect the company or
offer new unforeseen opportunities. Trends are varied.

The most obvious disrupting trends are enabled by technical advances. From Amazon to
Apple, companies base success on technical advances that allow even more
disruptive impact in distribution, marketing and new market development.
Technologies are more than hardware or software. Technical advances come from scientific
research. The research in academia is the starting point for anyone who wants
to be knowledgeable on technology in business.

Getting to understand scientific research, especially in areas one has no prior knowledge,
is a chore in itself. Reading survey papers on a particular technology can
offer a crack in the barrier to understanding. New technologies like Blockchain
or Quantum Computing can be daunting at first. However, even with a sophomoric
understanding of the topic will allow the learner to move onto the other axis
of the model with comfort.

Thechallenge is for the consultant to anticipate when and how the research in
academia or elsewhere will make the leap to market viability. The better the
consultant can anticipate this progression the better he/she can serve the
interests of clients. Some indicators are easily recognized: the prototype
actually works, peer review of the scientific discovery gains rapid attention
in a short time and the underlying science becomes easier and easier to
understand to the average person. Remember no scientific discovery can really
cross to the mainstream without simplified explanations of the discovery. The
easier to understand the broader the appeal.

Technology trends are not only in what consumers see. Obvious trends in mobility or social
media make the headlines. But those trends in advanced manufacturing or
material science or renewable energy can impact businesses in huge ways.
Advances in energy creation will likely be as disruptive as the technology of
the Internet of Everything (IoT). What if every product had its own energy
creation engine? Batteries store energy but what if the battery is replaced
with an energy creating engine? Every product on the planet would have to
change. This is where opportunities are to be found.

Combinations of technologies trend when they meet the needs of companies. Security cameras
are old news. With new software they create the opportunity to “see” in
multiple spectrums. The camera then can see if you are sick. It can recognize
employee from visitor. Combinations used by competitors can quickly become a
new trend.

Competitors use off the shelf technology products in combination and new ways. These
combinations can offer significant advantage. For example, tracking customers
on your website and learning their “navigation” profiles allows companies to
place lucrative offers in the right places and at the right times. The
consultant’s job is to investigate these combinations to understand the
synergies.

Technology trends can offer opportunities for disruptive thinking. The consultant learns
to separate the trend-of-the-month from disruptive technologies that affect the
core of the client business.

Cultural trends are important for international strategic planning but also for
understanding how these differences or changes will affect future product categories.
Understanding the cultural influence from social media on morals and beliefs is
important. This understanding drives how the company talks about offerings,
drives innovation in packaging (e.g., recycling materials) and drives how the
company thinks about customers. The consultant is part cultural anthropologist.

Studying humans in a social context and uncovering changes in interaction as a group is fertile
ground for innovation. Cultural trends can indicate needs not being met by
existing businesses or service organizations.

The study and observation of social groups is really a lesson in understanding on how
groups learn to adapt and change. Watching groups (i.e., market segments) adapt
to changes in economic standing or employment opportunities and how this
impacts how they live their lives can give early indications of unmet needs.
This, in turn, offers the astute observer with insight on how to change product
offerings or how to create new offerings or, even, how to partner with other
companies to offer mutual offerings.

Creating innovation with a focus on satisfying unmet needs comes from the study of human
behavior. How human behavior changes over time and the trends underlying those
changes provides opportunities to anyone willing to observe carefully. As
mentioned, consultants must be astute observers of human behavior and,
therefore, are especially adept at uncovering trends in human behavior.

Events like financial crisis and economic cycles are engines for human behavior
change. There is ample research to show that innovation emerges after such
events. But other trends contribute to behavior changes: demographics, climate
change, to name a few. The important theme here is the need to constantly
observe behavior change to uncover innovation opportunity. Behavior change
forces changes in the use of existing products and services. Often the
suppliers of these products do not adapt to the changes. Innovations can come
from the lack of competitor response to their existing customer base brought on
by changing behavior. If companies, and particularly clients, are not
constantly monitoring the behaviors and attitudes of their existing customers
they will miss important inflections in product/services demand. The innovative
consultant returns to the basics: consistent customer contact, questioning the
status quo and a maniacal focus on competitive maneuvers.

When human behavior changes market change is not long to follow. Whole markets change in
big ways when people act differently, when competitors jockey for more share
and introduce innovation and when partnerships develop that alter the dynamics
of systems of products. Analyzing market change requires access to data about
the players and the demand projections for the products. Consulting firms
should have this access and should constantly watch for changes in regressions.
The best consulting firms create their own analysis of the data and critique the
conclusions of the analysists. Assuming the boutique consulting firm, by virtue
of deep learning in a market space, has a better view into the market than the
analysts collecting the data, a messaged view of the market projections can
often add additional insight and advantage to the client. In fact, the reason
for the boutique consulting engagement may be for the “insider” knowledge of a
particular market. This applies especially when the consultant has watched the
market over an extended period of time and may see demand inflections before
the data shows the probability. Anyone who has been in business and engaged
with building revenue acceleration into their company will tell you that to
follow the analyst’s numbers and projections to the letter is unwise and risky.
The boutique consultant can mitigate that risk.

Another factor influencing “The X Axis” in our model is the changing geopolitical
landscape. Primarily, changing trade agreements and the influence of
governmental mandates can alter how trends can form. New agreements and the
subsequent changes in costs may offer a trend to innovate into. Component costs
change and may offer that product feature or that competitive technology
addition to suddenly be cost acceptable. A first to market advantage might be
possible.

Government subsidies should be followed for many of the reasons cited above. Trends in
pricing offer future opportunities. This impacts innovation when multiple
complementary components that make up a system simultaneously decrease. Oil
price drops affect manufacturing costs which impacts distribution costs which
lead to price advantages to the demand curve. Countries may want to “own”
certain technologies and are willing to subsidize the ecosystem of start-ups
that exist. How this impacts innovation to the client and others is important
to know. How this offers the client opportunities to innovate is even more
important to know. When these ecosystems develop they become sources for value
creation within the supply chain.

Knowing when a component will come to market or how much components along the supply
chain cost and in what quantity help calibrate the innovators timing. As
mentioned previously, innovators must consider the timing of innovation for
market acceptance. The supply chain gives leading indicators of the best timing
for the client. There will always be first movers and there will always be
least cost producers of new innovations. The companies that navigate the middle
can prevail.  Countless innovations are a
function of the converging quality of the supply chain of components and the
insightful application of those components into a cost acceptable package.

Being a student of trends is critical to innovators and consultants who desire to
innovate for their clients. Bringing the outside perspective to engagements is
often delivered by articulating these trends as they related to the client’s
products and markets. Trends from markets that may not be directly in the
client’s focus often can lend new perspectives to product innovation. Trends in
the science of metallurgy can impact industrial product development.  Trends in the space industry and exploration
can impact innovation in textiles. Trends in robotics can lead to innovation in
toys. The ability to converge on these trends to see new possibilities enhances
the value of the consultant expected to make significant impacts on client
revenue acceleration.

The Y axis

What good is technology for technology sake? How many academic research papers land on
deaf ears because the reason for the research is not understood? Trends and
technologies must be placed in context. They must be viewed within actual
situations or environments that bring value to someone. The future tend must be
relatable, must touch someone and must impact real lives. Placing trends or
future possibilities in the context of today involves the mental exercise of
imagining how it may be used, how it relates to other contexts and how it
relates to people’s needs.

Innovating into the context of unmet or unrealized needs is an exercise in
self-examination for the most part. You are going through your life and you
realize you need some information of some answer to a question or a tool to fix
something that doesn’t seem to exist. You are one step closer to an “app for
that” or a redesigned garden tool. The same process exist for the client’s
business.

Connecting with the client’s customer at an intimate level allows the consultant to “live”
their problems and challenges. They can see the needs as they emerge. They can
see problems and solutions that even the client’s customer can’t see for
themselves. More importantly, the anticipatory thinking of the innovator can
see the future unmet needs that may arise.

The tinkerer finds innovations precisely because they are intimately familiar with
the problems and challenges of making something out of nothing. The unrealized
need emerges from the tinkering. Reimagining the problem from all angles leads
to internalizing the problem. The problem becomes real in different ways. What
if this new aspect is injected to the problem? What would happen if a problem
is placed in a different situation, with different people or with different
rules? What Einstein called “thought experiments” applies to the business of
innovation. Finding unmet needs is the same as reimagining a problem from all
angles. And the various solutions can exist first in thought with
implementation later in reality.

This notion of placing trends in context is applicable to business when innovating
new products or services, business process re-engineering and/or market
transformation. A company may be experience a significant downturn in business
because market dynamics, costs and demand, are obsoleting the company’s
products. Placing the product in another business context can bring innovation.
Products for the scientific market may be acceptable to the education market.
Products initially envisioned for the elite business leadership market can be
“digitized” for the consumer market. Instead of in-person delivery of services
one can “virtualize” the delivery to reach a wider market.

Uncovering how customers may use a new product or service may require placement in a
variety of situations, where the customer’s experience with a product or
service changes completely with where and when they use it. Innovations emerge
from the impact of situational use of a product. The feature set may be very
different when a customer uses a product sitting in their office than when in
the bathroom. Yet the cell phone is used in both situations. Time study analysis
and human factor research contribute to systematic analysis of situational use
of products and can drive innovation. UX design can guide product developers to
new features and interface paradigms. Consumer packaging designers innovate
based on where the consumer opens the product, outside the house or inside.
Paramount to the innovator is the understanding of the context of use
situations or use cases that drive needs. Use cases become the litmus test to
an innovation’s value.

Contexts can also be viewed through a causal lens. One event causes another in the
marketplace and presents novel opportunities to innovate. When an analysis of
causal events points to further downstream events, innovators can anticipate
those events and the consequences they bring. Knowing that a Rasberry Pi can be
used in building intelligent products at extremely low costs provides the
platform for predicting that intelligence will be built into every product. So
if you are gleefully manufacturing and selling products that have no
intelligence a competitor will jump on this.

If a client is focusing on the technology innovations alone and not thinking about
the downstream consequences, and if he/she isn’t directly relating that
innovation to their business, the business will suffer. The consultant’s skill
in describing the downstream events as they relate to the client’s business and
products can bring significant value to the engagement and lead to innovations
that change the trajectory of the business.

As with causal contexts, the ability to see trends as correlations can offer fertile
ground for innovation. Are technologies evolving in parallel? Do market events
correlate to each other and can you leverage that analysis to innovate with
each correlate? This perspective allows additional insight into product
associations that also enable innovation.

Considerable attention is paid to products that are bought together or otherwise are
associated in some way or another. Gaining insight into this context can drive
new product development, as well as innovations in marketing approaches.
Systems of systems and unique packages of products can be created.

To summarize the Y axis dimension of this 3D Innovation Model, placing trends in
context, in situations and associating them with other trends provides the
reality foundation to innovate. Ideas flow out of use cases. Innovation comes
from anticipating needs and uses of technologies that are in their infancy.
Equally important, are the events that cascade from other events and to see the
chain reaction before others do. Combining the X and Y axis concept here begins
to set integrated thinking as the core of innovation. The implementation and
execution of these ideas become the third piece of the puzzle.

The Z Axis

Certainly a difficult enterprise, the execution of new ideas or innovations contains many
barriers. The navigation of these barriers is the consultant’s job on behalf of
clients. Knowing how and when to push new ideas, knowing the risks of pursuit
and knowing the level of push back likely to be encountered can help clients
break through on many innovations they would have otherwise dropped. Change is
difficult and people react differently. The empathetic consultant can navigate
the different personalities to position innovation for acceleration. First,
however, is the need for a really good idea; something not as easy as it
sounds.

Ideas are the currency of innovation. Lots of ideas need to be spent to come up with the
one that works. Sometimes new investments need to be made in an idea to have it
last. Sometimes ideas should be chalked up to a total loss. The ideation phase
of innovation can be as little as a comment in a conference room or a long 3
day exercise in ideation techniques. Either may produce the one idea that can
change the client’s company.

Ideation should be in the DNA of a company. Radical ideas, and those that propose them,
should be considered without judgement. Nor should they be shaped to something
acceptable that is benign and serves the groupthink of management. It becomes a
fine line. Ideas that sound crazy at first can morph to something that is still
radical but practical. Everyone should encourage that journey. Especially the
idea generators who must accept the consensus building process.

The consultant is the spark that drives innovation through new ideas. He/she must
be willing to put ideas out that may be dismissed or even ridiculed. But the
consultant should also have a better perspective on what is a good idea that
merits consideration. Adding these ideas up over the life of an engagement is
the payoff. Boutique consulting puts experience into ideation. That experience
produces anticipatory thinking about all aspects of the business. In Revenue
Side consulting, that means new products, new messaging and/or new business
strategies that open up the client to the next level of revenue growth.

For any innovation to have sustained success, competitive barriers must exist from the
start. Working on behalf of the client the consultant should put the need to
create competitive barriers in the forefront. Most clients forget this critical
aspect of innovation creation in business. Talk to any startup and they will
tell you that, although the idea they are commercializing is well known, their
approach is unique. The Revenue Side consultant understands the techniques for
creating barriers to competitive encroachment. The technology may be different.
The tailoring of open source technology may be altered to appeal to a
particular market segment. The combination of system components may be unique
where one of the components is an exclusive for the client. The consultant
should be prepared to find a combination that is unique.

The barrier may be an exclusive license from a university. In this case, creating
the barrier is easy. The university is a source for providing the client with
differentiation and competitive barriers. Combing a new scientific finding with
the client’s portfolio of offerings can justify pricing levels, proof of
marketing claims and create foundations for future innovation.  Barriers, if considered early in the
innovation development process, provide additional opportunities to capture new
markets without the risk of immediate price and market share erosion.

Defining the markets of new innovations can be difficult. If the innovation emanates
from a known market and known market needs then the process is straightforward.
If the innovation is novel and requires market investigation to ensure success
then the task becomes much more difficult. What may appear as straightforward
turns out to be difficult. The novel innovation may not be mature enough for
risk-averse markets like finance, public health or bureaucratic public
organizations. The approach for the consultant is to know the techniques of
market development.

Using the consultant’s network is critical. Engaging the thought leaders in the target market will
help fail early and fail fast.  If the
innovation is not going to hold up against scrutiny, the consultant wants to
know early. This allows for a rapid pivot. Pivots are expected and serve to evolve
the successful use cases. Seeking feedback from diverse segments in the market
will often uncovering new insight. Large prospective customers may feel they do
not need your innovation. Smaller prospects may want your innovation simply
because they do not want to bother duplicating the innovation internally. The
innovation should not be dropped simply because one prospective customer is not
in need. Seek the lucrative segment.  The
benefits of the innovation should match the needs of the segment. This creation
of a value proposition is critical for successful innovation.

Value creation is a package of inherent features of the innovation. So many novices
fall into the trap of seeing innovation as a single construct. Value is
comprised of the entirety of the innovation.  In business especially, the wrappings around
the innovation can be the reason for commercial success. Packaging is one
example. Return policies can be another. Turning a product into a “throw-away”
because of pricing breakthroughs can be another. One person’s value is another’s
meaningless feature. Value is in the eye of the beholder so to speak. Which
means that knowing the prospective customer intimately is paramount.

In early innovation development, the opportunity to find and sell a “repeatable”
customer goes a long way to advance the commercialization of the innovation.
Commercialization implies acceleration of revenue and market penetration of the
innovation. Seeking a repeatable customer, where the process of selling the
innovation and developing the exact value proposition to meet the prospects
needs, is the easiest path to profitability. Imagine that an innovation fits
into the hospital market. Although each hospital is unique, the process of who
buys, who are the decision makers and what are the overriding needs, can be fairly
consistent across hospitals. If one can sell to a single hospital, and get that
first customer (which is harder than one might think) follow on customers are
easier to secure. Obviously it is easier to sell when a reference account is
similar to the prospect.

Commercializing
innovations is directly related to the trends and context that is envisioned.
It derives from these aspects of innovation creation. The context will require
different approaches to commercialization. Buyers want different ways of
buying. They have different ways of processing and evaluating the value
proposition. If, for example, the same marketing and sales processes (e.g.,
catalog sales) is used to sell more sophisticated products, the buyer may
simply not buy because of the process, rather than the stated value
proposition.

This may be difficult for larger companies in their journey to full commercialization.
The larger the company the greater infrastructure in sales and marketing to
leverage in the marketplace. This infrastructure is used as significant
leverage to gain immediate traction. Unfortunately, many innovations discovered
in the company may not be appropriate for the sales and marketing
infrastructure that exists. So many discoveries from larger defense
contractors, large multi-nationals or great universities go unknown because the
commercialization requirements do not fit the strengths of the large
enterprise.

The consultant can help guide the client in how best to commercialize new
innovations for companies by outlining the steps to successful market
expansion. Assuming the company has secured early customer acceptance,
expansion phases should be put in place. Special emphasis should be placed on
how the buyer wants to buy. What are the terms and conditions? What is the
exact process? Can it be streamlined to make buying easier? Can the client
“hide” the internal steps necessary to complete the purchasing from the
customer? Make it easier to buy and expansion accelerates. Define the target
buyer exactly and expansion accelerates. Wrap the innovation with more value features
and acceleration increases. Secure partners that can offer your innovation or
associate your innovation with their products or services and expansion picks
up speed.

Innovation
does not happen in a vacuum. Significant constraints always exist to the
creation and/or use of new innovations. These constraints may include cost
limitations, size limitations, technology readiness factors and or capital
scarcity. These will hinder innovations and kill creative initiative if not
careful.

The perceived constraints can seem insurmountable to teams. The consultant’s task
is to open up the discussions and see past the constraints to new novel
solutions. Turn the direction of the discussion by introducing new perspectives,
new information and/or new ways to break the constraints. Ideate past the
constraints by assuming that one or several didn’t exist; the new solution can,
and often does, illuminate the constraint entirely. The consultant is in an
excellent position to unjam the team’s progress.

X, Y, Z Integration

Integrating thinking along the three dimensions provides a framework for creating and
executing on innovations. All three must be considered and the mix of
alternatives must create the most probable direction for success. The volume
domain the three dimensions create allows for combinations of ideas that have
strengths and weaknesses.

One dimension may be stronger or further along than another. For example, the
context of an idea may be known and specific and the prospects for market expansion
through commercialization is easy but the trend direction may be too nascent. Technology
may be too early and needs further development. Market behavior may have a setback
or may not be at a critical mass to justify integrating the solution. Timing
may be not right. Or the technology may be sufficiently advanced and the path
to commercialization is robust but the contextual domain is unknown. Finding
the right context is needed to complete the effort.

Each axis requires execution in some form or another. The evolution of this execution is
in fact the process of innovation. The 3D model allows for a starting point to
begin mapping out a strategy to evolve each axis, to mature the trends, to find
and evolve the contexts and to pursue the market and commercialization
development. Here are a few examples that demonstrate the starting points
concept within the 3D model:

1.     
Space exploration is a significant trend
emerging with advances in technology and disruptions in cost structures. These advances
allow contexts in mobility of satellites. The commercial need for thruster
solutions for CubeSat is becoming a larger market opportunity. New solutions
and new opportunities may require a technology transfer of technology from
universities or R&D labs. Commercialization efforts start with this
licensing and IP protection. The eventual solution could be a novel thruster
for CubeSat sold to CubeSat manufacturers as a component to their solution. The
market growth appear to be exponential over the next 10 years.

2.     
The success for online retailers is obvious. A
mature example of a trend. This is forcing traditional retailers to adjust by
also offering online sales. However, a different context may be possible.
Retailers that exist in brick and mortar for the demonstration of products.
Certain products easily purchased on line may still need the customer to try it
before liking it. The hybrid approach to selling these products may set in
motion the growth of Demonstration Retail. This will require new in store set
ups. It will change the instore experience to allow riding around in a 4wheeler
or riding lawn mower of touching and feeling new innovative products. The popup
store for demonstration purposes may be in the future. This will require
partnerships that do not exist today and clerks evolved into product
demonstrators.

3.     
Online work is exploding. Teams are
collaborating through video conferencing. Virtual work is here to stay. Also,
advances in AI and computational linguistics enable the analysis of how these
teams interact, how they communicate and how the team evolves with leadership.
This digital transformation of analyzing team’s interaction without intrusion
into the team is significant. Autonomous suggestions can be provided that helps
the team collaborate more efficiently. Suggestions on communication styles can
be made. The leadership of the team can improve their communication style by
having the analysis determine the relative communication styles of the
participating individuals.

These are just three examples that incorporate the 3 dimensions into the creation of new
solutions. The process is more important than the actual ideas at this point.
No new idea is worthless; it is the starting point to be evolved.

Within client engagements this process can be used to create new ideas that drive new
directions, deflects the team’ s focus from  just the constraints of the business or act as
material to open up the minds in the room.