July 29

Gazing at the Innovation Horizon

As one of my friends recently said, working in a heat wave is never the best of ideas.  The unrelenting heat leaches ideas from the mind and when you step out of doors in search of a gentle breeze or a touch of shade the air smells as cooked and dry as an abandoned blast furnace.

Still, on a positive note, the Met Office website shows that as a side effect of the settled weather pattern the visibility in London, and in many other parts of the UK, is “very good”, defined as being from 20 to 39km.  Unfortunately in much of London the buildings tend to get in the way; but it does mean that if we take the effort to reach the high points such as the Shard viewing platform, we can see clear to the horizon.

Before you all write in, yes I’m taking a bit of a liberty as the distance to the horizon changes depending on where you stand.  In fact on a flat plain or at sea, for the horizon to be 39km away you would need to stand on a 100m high platform and the Shard is considerably higher than that.  But is does raise an interesting point.  The horizon is not fixed; we can expand our horizons, we can broaden our horizons simply by taking a few extra steps.

In the business landscape this concept of not settling for the status quo but taking steps to expand our horizons is an integral element of innovation theory.  In my earlier articles I have talked about the way in which innovation has increasingly become the 21stC differentiator; that in an increasingly homogenous business landscape it is not what you do but how you do it that has become the driver of corporate growth.  In fact in the March 2012 Capgemini Innovation Leadership Study 42% of respondents had a formally accountable innovation executive, up from 33% in the previous year and 66% of respondents said that they had been tasked with creating a culture of innovation.

But there is still an element of confusion about the way in which organisations can move towards a culture of innovation, as illustrated by the Capgemini survey which revealed that 58% did not have an innovation strategy.  Innovation is not rocket science but it can be a leap of faith for those who are used to rigid structures and prescriptive behaviours.  This is where the innovation horizon model can come in handy.  The model positions innovation via three areas:

  • Horizon 1 – Incremental

Small constant steps forward that delight your customers every day and give your people a sense of achievement. Your customers won’t need to change what they do but they’ll love the little changes you make.

  • Horizon 2 – Differentiated

Something more than incremental but not necessarily radical this step absolutely differentiates you from your competitors. It should positively change how you and your customers behave.

  • Horizon 3 – Radical (Disruptive)

Usually fast, major leaps forward that create or expand markets and/or render existing products non-competitive. This usually changes what you do, how you do it and how your customers behave.

Taking these three horizons together enables organisations to create “the innovation mix”; a balanced and strategic spread of activities across the three horizons.  By aligning these to the company’s purpose, values, corporate growth strategy and risk profile each organisation can create a horizon chain which is right for them.  For example Coca Cola splits their efforts on a 70/20/10 basis enabling them to improve what is already successful, work on what is emerging or gaining traction and look forward to what is possible.

In business we never stand still, never fix our horizons, never stagnate.  Having defined those next steps and then decided what activity is needed to match those growth plans the CEO and the leadership team can then move to build innovation capability across the organisation.  Matching the steps to the innovation horizons helps to give direction to the plans, to communicate, to change behaviours and to engage employees in the new culture.

Love it or hate it, if the heatwave teaches us that we can see clearer, can look beyond the immediate to a far horizon in which innovation transforms the business landscape then the summer of 2013 could just be a game-changer in more ways than one.

If driving innovation and building it into your organisations culture is a current strategic challenge, get in touch and see how we can help.

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Differentiation, Growth, Innovation, Innovation strategy, Strategy

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