Four Growth Strategies Every Innovator Should Have In Their Playbook
There are four growth strategies based on the jobs-to-be-done innovation framework companies can pursue to achieve predictable growth and win the game of innovation.
Jobs and Job Executor Opportunity Matrix Defines the Playing Field
Adapted from Ansoff’s Market/Technology Matrix, we can map out the playing field into four basic quadrants based on existing and new job solutions, and existing and new job executors (customers). Each quadrant represents a growth strategy.
Figure 1: Jobs & Executor Opportunity Matrix
Strategy 1 – Sustain Innovation: The lower left hand quadrant represents existing businesses a company competes in. Often we think of innovation in this quadrant as primarily incremental improvements and line extensions. However, it is quite common to launch “substantial” and “breakthrough” products in quadrant 1.
It is therefore, better to think of quadrant 1 as the existing core business. Our objective in quadrant 1 is to help our existing customers get their existing jobs done better through innovation.
Degree of Innovation Definition
Before moving onto to the other strategy quadrants, it is good to understand the concept of “degree of innovation” which Silverstein, Samuel and DeCarlo describe in their book “The Innovator’s Toolkit.”
Innovation can be classified into 3 basic categories:
Incremental: These are basic performance improvements, cost reductions, repackaging, and in some instances, added features. An example of incremental improvement would be upgrading from last year’s PC (especially during the high growth years) to this year’s model. Maybe there were incremental improvements to clock speeds, memory size, added I/O ports and packaging design.
Overtime, the evolution of the first PC’s compared to today’s PC’s has been substantial. But from one year to the next, the improvements were mostly incremental and based on established improvement trajectories existing customers value. This is what Clay Christensen defines as “sustaining innovation.”
Substantial: Innovation is still focused on established improvement trajectories but the innovation is significant enough to make the old product obsolete. For example moving from CRT monitor to a flat screen monitor. From a technology point of view, we could classify this as a breakthrough – but from a functional and performance point of view – the innovation continued along established improvement trajectories.
Breakthrough: Innovation is still focused on established improvement trajectories, but the innovation is significant enough not only to make the old product obsolete, but how people get existing jobs done. For example moving from a dot matrix impact printer to a laser printer to get the important job done of presenting information.
Laser printers were a breakthrough technology that changed the competitive landscape. It never-the-less competed along established lines of improvement trajectories – for example print quality and speed. But it also provide far more value than the old technology – i.e. superior graphics.
We can see that defining what’s incremental vs. substantial vs. breakthrough is somewhat subjective. For strategic project portfolio planning, the significance is to understand that these three degrees of innovation represent different levels of development, capabilities, resources, time, risk and upside potential. As such, they should be managed differently because they require different sets of innovation plays and skills to be successful.
In my upcoming book to be released later this month “The Innovator’s Play: Discovering and Transforming Great Ideas Into Breakthrough New Products,” I describe how to create an innovation game plan based on where a company is competing in the innovation knowledge funnel. If you are interested in getting a pre-released PDF version of “the Innovator’s Playbook,” send me an email with your request at email@example.com and ask for the Innovator’s Playbook.
Strategy 2 Adjacent Growth: In the upper left hand quadrant, growth is achieved by taking existing job solutions and target them to new customers/markets. One way to do that of course is to enter a new market region. This may or may not require modification of existing solutions to fit the local market.
The other way to compete in this quadrant is to identify what Christensen calls “non-consumers” of existing solutions, and create a new offering tailored to convert non-consumers into consumers. This is often accomplished by making the offering simpler, more convenient, more accessible and cheaper than the core/mainstream solutions.
This strategy is also known as disruptive innovation. I’ll explore disruptive innovation and sustainable innovation in future post.
Strategy 3 Related Jobs for Existing Customers: Found in the lower right quadrant, the strategy is to serve existing customers by getting more of their important jobs done better.
These include getting specific sub-jobs and higher level jobs done better within a job chain. For example a contractor wants to cut a board to a certain dimension – a job he might struggle with is measuring and accurately marking the cut before making the cut.
The other opportunity is helping existing customers get more related jobs done within an overall job map. For example once our contractor has framed his walls, his next job or set of related jobs, is to drywall, tape, mud and finish the wall. These all represent job opportunities that we can help the contractor get done better.
Strategy 4 New Jobs and New Customers: Located in the upper right quadrant, this is the most bold and potential rewarding quadrant of them all. It is also the most risky of them all because in theory – these are new to world/ new to market solutions. They often evolve from new technology capabilities. For example the internet.
The key to succeeding in this quadrant is to realize you will be facing an adoption curve which can take 20 years are more, depending where you define the initial innovation starting point. For example, the internet took more than 20 years to move from its origins at DARPA in the 60’s until it was commercialized by Silicon Valley entrepreneurs in the 90’s. Today the “internet of things” is now just only taking off though technologist have been experimenting with it for decades.
Fundamentally, to succeed in quadrant 4, the innovation must address an important job that customers ultimately want to get done, the technology is ready to commercialize, and a business model can be created to ultimately exploit the new invention.
Another way to think about success in quadrant 4 is that the new innovation must meet the three criteria of design success:
• It’s Desirable (customers have important jobs to get done). • It’s feasible (the technology and capabilities exist to create a meaningful value proportion. • And the market is viable (the market is large enough to pursue and a business model can be created to execute).
On future post, I’ll dive deeper on the 3 criteria of design success can be used to guide the plays in your innovation playbook in all four quadrants. As well as introduce the idea of “innovation types” defined as Product/Service Innovation, Process Innovation, and Business Model Innovation.
All three of these innovation types exist in all four quadrants in one form or another, and provide additional strategic dimension innovators can build their innovation playbooks around.
Let’s go play the game of innovation to win!