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The Little Black Book of Innovation [Speed Summary]

The Little Black Book of Innovation demystifies innovation – defined as “something different that has impact” for consumer brands into 28 straight-talking Q&As. It’s a smart distillation of thought- leading innovation insights into digestible bite-sized chunks.

Whilst most innovation defaults to product innovation, brands have four major innovation opportunities;

  1. Product innovation
  2. Distribution innovation
  3. Revenue model innovation
  4. Process innovation

And four types of innovation;

1. Commercial Innovation (a better way to market and promote existing products)
2. Sustaining Innovation (incrementally improve excising products and services)
3. Transformational Innovation (introducing a breakthrough in performance in existing categories)
4. Disruptive Innovation (creating a new category)

The overall message is deceptively simply; the secret to innovation success is to identify unsatisfactorily solved problems, and then come up with new and effective solutions.  And of the best ways of for solution searching is “associational thinking“.

Associational thinking involves thinking about problems by association. Is there a similar problem that has already been solved in another category that you could use? Hollywood uses associational thinking to come up with and pitch new movie concepts. The Hollywood Pitch for the movie “Speed” was “It’s Die Hard on a Bus”, Alien: It’s Jaws in Space, Avatar: It’s Pocahontas on an alien planet. You get the idea. Innovation is imitation with a twist; take a success and mutate it into your category with a simple formula:

“It’s X [preposition] Y”

where “X” is an existing named success, the preposition is “for”, “in”, “with” etc, and “Y” is a new context or target.  The Hollywood pitch is simple, fun and smart – and we agree, is a great innovation tool.

Four core behaviours are identified as key to successful innovation;

  • Questioning: What If type though experiments
  • Networking: Interacting with people who think and do differently
  • Observing: Watching the world for surprising stimuli
  • Experimenting: Trying new things and going to new places

And finally Four Steps of Successful Innovation are described;

  • STEP 1: Discovering Opportunities
  • STEP 2: Blueprinting Ideas
  • STEP 3: Assessing & Testing Ideas
  • STEP 4: Moving forward
The remainder and bulk of the book breaks down these four steps into 28 Question and Answers – a kind of master innovation FAQ – with implications for innovation research:

Step 1: Discovering Opportunities

Q. How do I know it is time to innovate? A. Start before you need to by watching for early warning signs, because the urgency of innovation and the ability to innovate are inversely related. [Research Challenge: Explore what underlying trends suggest could be possible future states? Identify small but growing trends and identify how other categories have dealt with these trends?]

Q. How do I spot opportunities for innovation? A. Take a consumer-is-boss perspective. Look at the market through you real boss’s eyes and understand their problems that need solving [Research Challenge: Spend more and regular time with your customers and users]

Q. What indicates an opportunity for innovation? A. Look for an important problem job/task that customers can’t satisfactorily get done today [Research Challenge: Conduct observational research to identify tasks people have problems completing and run “why laddering” research beginning with “why did you buy this?” to identify the real problems being solved]

Q. Which customers should I target? A. Compete against non-consumption by looking for “non-consumers” that face a barrier inhibiting their ability to get a job done [Research Challenge: What tasks can people only currently complete by relying on an expert or third-party]

Q. How can I find non-obvious opportunities? A. Find “compensating behaviours” that people engage in to cover the inadequacy of existing solutions [Research Challenge:Round-table discussions on compensating behaviours people engage in to make up for shortcomings with status quo]

Q. How should I investigate potential opportunities? A. Get as close to the context as possible with observational and ethnographic research – and “avoid focus groups like the plague” [Research Challenge: Dump the focus group “Focus groups are for lazy people. Not lazy consumers – lazy researchers” Instead, conduct observational research to see how tasks are really completed]

Q. How can I confirm that the opportunity I have spotted is real? A. Don’t’ innovate blind, but borrow the eyes of competitors and other market players by asking yourself why they haven’t already seized the opportunity you have identified. [Research Challenge: Research what companies you admire are doing and get category professional the to explain how things really work in practice]


Step 2: Blueprinting Ideas

Q. How can I get inspiration for an idea? A. Go to the “intersections” and borrow liberally from how other contexts and categories have solved similar or parallel problems [Research Challenge: Investigate how the problem you are seeking to solve has been solved other categories and contexts]

Q. Where should I look for inspiration? A. Seek ideas from everywhere by exploring as many avenues as possible. [Research Challenge: Work with external category experts to generate ideas, run an open idea challenge, and work with entrepreneurs, designers and artists]

Q. Is my idea high quality? A. Remember quality is relative that can only be determined by understanding what matters the the target user [Research Challenge: Create a “strategy canvas” – listing opportunities to deliver value (benefits) on the Y axis, and current investment in the category on the X axis. Is your idea differentiated?]

Q. Is there such a thing as too good? A. Avoid overshooting, it’s possible to overshoot your target market by introducing features your customer will take, but not value enough to pay for. [Research Challenge: Investigate what would happen if you or the market leader cut features by 20% – (and how you could cut prices by 80%)]

Q. What is disruptive innovation? A. Doing it differently – disruptive innovations create new markets and transform existing ones through simplicity, convenience, affordability, or accessibility
[Research Challenge: Identify three new entrants that could have a disruptive impact on your industry]

Q. What is a business model, and how do I innovate it? A. A business model describes how as company creates, captures and delivers value; systematically considering a wade range of business model options can help enable business model innovation. [Research Challenge: Business model mapping – how do different market players create, capture and deliver value?]

Q. How do I translate my work into a concrete blueprint? A. Bring it together into a business plan; don’t just do it – stand there, step back, and summarise into a plan. [Research Challenge:Develop a sixty-second elevator pitch for your idea and get feedback from colleagues and category professionals]


Step 3: Assessing and Testing Ideas

Q. How can I separate good ideas from bad ideas? A. Let patterns guide and actions decide by looking at how and where you and competitors have had success before. [Research Challenge: Assess how innovation how well innovation ideas fit with successful patterns and actions in your company and market]

Q. What is a quick way to estimate my idea’s financial potential? A. Calculate your four P’s – multiply population x penetration, price and purchase frequency. [Research Challenge: Sort the relative worth of innovation ideas by calculating the 4Ps of your existing products, and researching what people would estimate for your innovation ideas]

Q. How can I identify an idea’s most critical assumptions? A. Reverse-engineer success by first determining what success looks like, and then identify the two most critical things that would happen for success to be obtainable [Research Challenge: Talk to category professionals and present what success looks like for you – and ask them what are the two critical things you need to do get there]

Q. How can I learn more about my idea? A. Test your assumptions behind your idea to see if they hold up in real life. [Research Challenge: List the top five assumptions behind your innovation and test them]

Q. How can I get people behind my idea? A. Bring your ideas to life to build buy-in and motivate action with a Hollywood Pitch, an ad, and a prototype. [Research Challenge: Ask stakeholders and sponsors for recent ideas and innovations that they found stimulating and compelling]

Q. How can I get good at experimentation? A. Embrace everyday experimentation by being on the constant lookout for opportunities to run experiments. [Research Challenge: Run simple field experiments whenever possible to test ideas and assumptions]

Q. How can I learn the right things from my experiments? A. Savour surprises by focusing on the findings you did not expect. [Research Challenge: Always look for anomalies and outliers in the data]


Step 4: Moving Forward

Q. How much should I invest in innovation? A. Embrace selective scarcity with tight timelines, single decision makers and constrained strategic choices

Q. Where can I find resources for innovation? A. Amplify your current resources by leveraging external resources and redirecting currently committed resources

Q. How can I avoid the sucking sound of the core? A. Active leadership, new voices, safe spaces and smart borrowing can help protect innovators for the sucking sound of the core (the “not our core competence” put-down)

Q. How do I manage interfaces between a new business and a core business? A. Use a range of techniques, such as setting up a walled garden, bringing in outsiders and decision autonomy, to make sure you don’t accidentally remember what you are trying to forget

Q. How can I motivate and reward innovation? A. Reward behaviours, not outcomes by shifting rewards from innovation outcomes to rewarding the right behaviours, even if the outcome is unsuccessful.

Q. How can I build momentum? A. Get quick wins to ensure efforts don’t get killed with the ticking clock strikes midnight

Q. How can I become systematically better at innovation? A. Practice makes perfect; put yourself in circumstances where you have to practice core innovation skills

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