Thursday, May 19, 2005

Innovation and Entrepreneurship: The Core Model

In recent months, I have been working out a model of innovation and entrepreneurship that allows organizations to create enormous wealth by identifing and serving new markets, while managing the inherent risk. The model has four elements:

Visualize a significant opportunity. Nothing meaningful happens until a leader develops a passionate, realistic vision of what can be. Great ideas often are found at the intersections of diverse disciplines, organizations, and cultures. InnoVenture is all about getting enough diverse, world class organizations together to precipitate out great, innovative ideas—in other words, getting enough atoms in the jar to create heat. The concept of the intersection is perhaps best described by Frans Johansson, author of The Medici Effect, who was the keynote speaker at InnoVenture 2005.

Assemble an outstanding team. Essential to building an outstanding team is clearly identifing what skills and behaviors are necessary for success and then attracting top talent with a successful track record of having done what is necessary. Perhaps the most articulate person I have met in building a successful team is Brad Smart, a proponent of topgrading.

Develop a compelling strategy. There are some types of innovations that are consistently commercialized successfully by market leaders. Get in between them and their best customers and they will take you out. There are other types of innovations though, where new entrants consistently are successful. These are discontinuous innovations, where new markets are created of customers who are not well served by the status quo. This is most clearly delineated by Clayton Christensen in The Innovator's Dilemma.

Execute a focused plan. Visualize a great opportunity. Assemble an outstanding team. Develop a compelling strategy. Then you must execute by narrowing the company's focus to a beachhead of mainstream customers, in order to simplify the process of delivering 100% of what is necessary for the product to be easy-to-buy. Satisfied customers will create word of mouth referrals, which is always the most efficient and effective marketing. This process is best described by Geoffrey Moore in Crossing the Chasm.

I have published a book, Swamp Fox Insights: Innovation and Entrepreneurship in a Time of Profound Change, that describes in more detail the core model and my experience with it over the course of my career.

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