Innovation

Creative Destruction

Creative Destruction Jonathan Poland

Creative destruction is a process in which new, innovative ideas and technologies disrupt and replace older, established industries and firms. This process of disruption can cause short-term instability and insecurity, as it often results in the loss of jobs and the need for workers to adapt to new roles and industries.

However, the long-term impact of creative destruction is positive, as it leads to the creation of more efficient and competitive firms and industries. For example, the introduction of driverless cars has the potential to revolutionize the automotive industry and lead to the creation of new jobs in technology and engineering.

The concept of creative destruction was originally developed by economist Karl Marx, who believed that it was a fundamental aspect of capitalism and would ultimately lead to the downfall of the system. However, the term is now more commonly used to refer to the process of innovation and disruption within capitalism, rather than as a threat to its existence. Overall, creative destruction is seen as a driving force behind economic growth and development, as it encourages the introduction of new ideas and technologies that lead to increased efficiency and competitiveness.

A/B Testing

A/B Testing Jonathan Poland

A/B testing, also known as split testing or experimentation, is a statistical method used to compare two versions of a product, website, or marketing campaign to determine which one performs better. It is commonly used in the fields of marketing, product development, and user experience (UX) design to make data-driven decisions about how to optimize and improve a product or campaign.

A/B testing involves randomly dividing a target audience into two groups, and exposing each group to a different version of the product or campaign. For example, if a company is considering updating the design of its website, it may create two versions of the website – one with the current design (version A) and one with the proposed new design (version B) – and randomly assign half of its visitors to see version A and the other half to see version B. By comparing the results from each group, the company can determine which version performs better in terms of metrics such as conversion rate, engagement, or satisfaction.

There are several benefits to using A/B testing, including:

  1. Improved decision-making: A/B testing allows companies to make data-driven decisions about how to optimize their products or campaigns, rather than relying on assumptions or gut feelings.
  2. Increased efficiency: By testing small changes or variations, companies can quickly and efficiently identify which changes are most effective, rather than making large, costly changes without knowing if they will have the desired impact.
  3. Enhanced customer experience: A/B testing can help companies improve the customer experience by identifying and implementing changes that lead to better engagement, satisfaction, or conversion rates.

To conduct an A/B test, it is important to:

  1. Clearly define the hypothesis: Determine what you are trying to test and what you hope to achieve.
  2. Select appropriate metrics: Choose metrics that will help you evaluate the success of the test, such as conversion rate, engagement, or satisfaction.
  3. Ensure a large enough sample size: A larger sample size will help ensure that the results of the test are statistically significant.
  4. Use proper statistical analysis: Use appropriate statistical tests to analyze the results of the test and determine if the differences between the two groups are significant.

In summary, A/B testing is a statistical method used to compare two versions of a product, website, or marketing campaign to determine which performs better. It is a useful tool for making data-driven decisions and optimizing products or campaigns, and it can help companies improve the customer experience. To conduct an A/B test, it is important to clearly define the hypothesis, select appropriate metrics, ensure a large enough sample size, and use proper statistical analysis.

Tactical Planning

Tactical Planning Jonathan Poland

Tactical planning is the process of developing specific strategies and actions to achieve the objectives of an organization. It involves identifying the resources, tasks, and milestones required to implement a plan and execute it successfully.

Tactical planning typically occurs at a lower level of an organization, and it focuses on the details of how to implement a strategy. It is often seen as the bridge between strategic planning, which determines the overall direction of an organization, and operational planning, which focuses on the day-to-day activities required to execute the plan.

There are several steps involved in tactical planning:

  1. Define the objectives: The first step in tactical planning is to clearly define the objectives that the organization is trying to achieve. These objectives should be specific, measurable, achievable, relevant, and time-bound (SMART).
  2. Determine the resources needed: Next, it is important to identify the resources that will be required to achieve the objectives, including people, equipment, budget, and time.
  3. Develop the plan: Based on the objectives and resources, the organization can develop a detailed plan outlining the specific tasks and milestones required to execute the strategy.
  4. Implement the plan: The next step is to put the plan into action and begin executing the tasks and activities identified in the plan. This may involve coordinating with different teams and departments within the organization.
  5. Monitor and adjust: It is important to regularly monitor the progress of the plan and make adjustments as needed. This may involve reassessing the resources and tasks required to achieve the objectives and adjusting the plan accordingly.

Tactical planning is an essential part of the strategic planning process, as it helps organizations to translate their long-term goals into specific actions and achieve their objectives.

Strategic Drivers

Strategic Drivers Jonathan Poland

Strategic drivers are factors that influence the success of an organization’s strategy and shape the direction of its business. They are typically long-term trends or developments that have the potential to impact the organization’s competitive position, revenue, and profitability.

There are several types of strategic drivers that organizations should consider when developing and implementing their strategies:

  1. Market trends: These are changes in the market that can affect an organization’s ability to compete, such as shifts in consumer preferences, technological advancements, and economic conditions.
  2. Competitive landscape: The competitive landscape refers to the other organizations in the market that offer similar products or services. Understanding the strengths and weaknesses of competitors can help organizations identify opportunities and threats and develop strategies to differentiate themselves.
  3. Internal capabilities: An organization’s internal capabilities, such as its resources, skills, and culture, can influence its ability to execute its strategy and achieve its goals.
  4. External factors: External factors such as regulatory changes, political instability, and social trends can impact an organization’s strategy and business operations.

By considering these strategic drivers, organizations can identify the key factors that will shape their business and develop strategies that are aligned with their goals and objectives. This can help organizations stay competitive and adapt to changing market conditions. The following are common strategic drivers:

Branding

Many organizations are driven to build a particular brand image and experience.

Budget

Budget constraints.

Competition

Competitive threats such as a price war or innovation by a competitor.

Competitive Advantage

The need to defend and build capabilities that allow you to compete such as innovative products or cost leadership.

Cost

Changing costs due to factors such as inflation, commodity prices and foreign exchange.

Customer Preferences

Shifting customer preferences such as fashion trends.

Economic Moat

A long term competitive advantage that is difficult for the competition to challenge.

Economics

Economic forces including growth, interest rates and inflation.

Goals

Primary goals such as revenue and sustainability.

Governance

Governance is the practice of directing an organization in the interests of stakeholders including owners, creditors, employees, customers and the communities in which an organization operates. The interests of stakeholders is a fundamental strategic driver.

Industry Trends

The forecast or predicted direction of an industry.

Location

Location is a competitive factor that may shape strategy. For example, a superior location such as the only restaurant in a small airport is likely to affect pricing strategy.

Markets

Competition in pricing, products, promotion and distribution.

Mission & Vision

The purpose and direction of your organization.

Organizational Culture

A strategy typically needs to account for your corporate culture. For example, the level of resistance to change that might be expected.

Partners

Aligning with or complimenting the strategy of partners.

Principles

Guidelines that an organization has adopted to direct strategies and decisions.

Public Opinion

Opinions and values of the communities in which you operate.

Regulations

Laws and regulations or anticipated future regulations.

Reputation

Building or protecting a reputation.

Resources

Acquiring or retaining resources such as skilled employees.

Risks

Potential for losses associated with actions or inaction.

Security Threats

Security threats such as malware and hackers.

Security Vulnerabilities

Security vulnerabilities such as software bugs or a lack of information security awareness amongst employees.

Sustainability

Preventing harm to people and planet.

Taxation

Current and future tax efficiency.

Technological Change

Technology change may allow for new efficiencies or may represent a threat to existing business models.

Values

An organization’s values such as respect for employees, customers, communities and the environment.

Weather

Weather influences strategy in many industries, particular those that involve outdoor work such as construction.

Window of Opportunity

Window of Opportunity Jonathan Poland

The window of opportunity is a concept that refers to a limited time period during which an opportunity is available or can be effectively pursued. It is often used in the context of business and innovation, as it can be challenging to identify and seize opportunities in a timely manner.

There are several factors that can influence the size and duration of the window of opportunity:

  1. Market demand: The level of demand for a product or service can affect the window of opportunity. If there is strong demand for a new product, the window of opportunity may be larger and longer-lasting. On the other hand, if demand is weak or uncertain, the window of opportunity may be smaller and shorter.
  2. Competition: The level of competition in a market can also impact the window of opportunity. If there are few competitors, the window of opportunity may be larger. However, if there are many established players in the market, the window of opportunity may be smaller and more challenging to seize.
  3. Technological advancements: New technologies can create opportunities for innovation and disruption, but they can also make it more difficult to capture a window of opportunity. As technologies evolve and become more widely adopted, the window of opportunity may close.
  4. External factors: External factors such as economic conditions, regulatory changes, and social trends can also affect the window of opportunity. For example, a change in consumer preferences or a shift in government regulations may create or eliminate opportunities for new products or services.

In order to successfully seize a window of opportunity, it is important to identify potential opportunities early on and act quickly to pursue them. This may involve conducting market research, developing prototypes, and building partnerships. By being proactive and agile, businesses can increase their chances of success and capitalize on opportunities as they arise.

The following are common examples.

  • Markets: The price of a stock drops irrationally low at the end of a capitulation where it remains for a matter of minutes.
  • Health: A disease or condition that is treatable until it reaches an advanced state.
  • Business: A business discovers a new market and for a short time enjoys a monopoly until competition arrives.
  • Education: Young children can acquire native skills in a language whereas adults may never fully master a new language.
  • Career: A young engineer is given a chance to give a presentation to the executive team of a large organization.
  • Sustainability: An endangered species is close to a tipping point after which its population will be too low to save.
  • Sports: A penalty kick in a tied game with seconds on the clock.

Industrial Design

Industrial Design Jonathan Poland

Industrial design involves creating designs for mass-produced products. A common principle in industrial design is that the design should be independent of the manufacturing process, meaning that the designer does not need to consider the specific challenges and limitations of the production process. However, in practice, manufacturing costs and capabilities often have an impact on product design. Industrial design aims to create functional, aesthetically pleasing, and user-friendly products that meet the needs of consumers and users.

Industrial design is a field that focuses on the development and design of products, systems, and experiences. It involves the creation of functional, aesthetically pleasing, and user-friendly products that meet the needs of consumers and users.

Industrial designers work in a variety of industries, including consumer goods, medical devices, transportation, and furniture. They use a range of tools and techniques to design and prototype products, including computer-aided design (CAD) software, 3D printing, and prototyping materials.

The process of industrial design typically involves several steps:

  1. Research and analysis: Industrial designers conduct research to understand the needs and preferences of users and the competitive landscape. This may involve market research, user interviews, and analysis of existing products.
  2. Concept development: Based on the research and analysis, industrial designers generate and sketch out ideas for new products.
  3. Prototyping and testing: Industrial designers create prototypes of their designs and test them to assess their functionality, usability, and appeal.
  4. Refinement: Based on the feedback and insights gained from testing, industrial designers refine their designs and create final prototypes.
  5. Manufacturing: Once a design is finalized, it is passed on to manufacturers to produce the product in large quantities.

Industrial design is an interdisciplinary field that combines elements of engineering, art, and psychology. It plays a crucial role in the development of the products and experiences that shape our daily lives.

Idea Generation

Idea Generation Jonathan Poland

Idea generation is the process of generating new and original ideas. It is an essential component of the innovation process and can be applied to a wide range of fields and contexts, including business, design, art, and science.

There are many different techniques and approaches for generating ideas, including:

  1. Brainstorming: This is a group activity in which participants are encouraged to freely generate as many ideas as possible without judgment or evaluation. The goal is to generate a large number of ideas, even if they are not all feasible or practical.
  2. Mind mapping: This involves creating a visual representation of an idea or problem, with branches radiating out from a central idea to capture related ideas and associations.
  3. SCAMPER: This is a problem-solving technique that involves applying seven different prompts to an existing idea or problem in order to generate new ideas: Substitute, Combine, Adapt, Modify, Put to another use, Eliminate, and Reverse.
  4. Reverse brainstorming: This is a variation of brainstorming in which participants are asked to generate ideas for how to prevent or solve a problem, rather than coming up with ideas to achieve a goal.
  5. Design thinking: This is a process for generating and developing creative ideas that involves empathy, prototyping, and testing.

Idea generation is an iterative process that requires creativity, open-mindedness, and the ability to think outside the box. It is an important step in the innovation process, as it provides the foundation for further development and refinement of ideas.

Design Innovation

Design Innovation Jonathan Poland

Design innovation refers to the development of designs that represent a significant advancement. This can encompass innovation in fields that are traditionally associated with design, such as visual design, as well as the application of design principles and design thinking to innovate in areas such as architecture, engineering, and software development. Design innovation involves the creation of new and original designs that push the boundaries of what is currently possible and have the potential to make a significant impact. The following are common types of design innovation.

Structure

Structures such as architecture of a building. For example, a building that is a leap forward in terms of earthquake resilient design.

Environments

Environments both physical and virtual such as a game environment that invents a new law of physics in a virtual world.

Experience

Designs that change user experience in some meaningful way. For example, a new way to navigate complex information structures.

Usability

Making things more usable. For example, a holographic user interface that is easier to use than a tradition screen-based user interface.

Productivity

Designs that allow people to be more productive. For example, a search engine that displays the highest rated items that are a reasonable price such that customers often find exactly what they want on the first page of results.

Engagement

Making experiences more interesting and stimulating for users such as gamification of business software that makes work more enjoyable and creative.

Accessibility

Making things more useful for as many people as possible. For example, a design for a living street that improves things for people with disabilities, children, seniors, people carrying large items, bicyclists and emergency services.

Safety

Designs that are safer than the current state of the art such as an innovative design for a child safety seat.

Quality

Making things more fit for purpose such as a design for a kite that is easier to launch and control.

Reliability

Reliability such as an aircraft engine that is better at handling bird strikes without being damaged.

Performance

Performance such as a high speed train that can be safely operated at a higher speed than competing models.

Efficiency

Getting more output for each unit of input. For example, a passive technique for transporting sunlight to the center of a building that reduces the use of electric lighting.

Sustainability

Designs that reduce environmental damage or improve quality of life. For example, a plastic bottle that quickly biodegrades into harmless elements. Product designs are commonly produced in millions of units. As such, product designers are in a unique position to save the world.

Capacity

The ability to hold more such as an innovative rechargeable battery that stores more energy that any other comparable technology.

Aesthetics

A revolution in the way that things look and feel.

Differentiation

Designs that differentiate products in some extremely valuable way. For example, innovative use of shape, form and materials that generates demand and publicity for a product.

Durability

Designs that are more difficult to break. For example, a valve for a soccer ball that doesn’t allow the ball to be overinflated.

Complexity Hiding

Making interfaces simpler without making the product simpler. For example, an aircraft that has extremely complex safety systems that are relatively simple for pilots to use.

Integration

Things that are better integrated with other things. For example, a child car seat that is easy to anchor in any model of vehicle.

Modularity

Things that can be deconstructed and customized with modules such as a mobile device that is infinitely upgradable with hardware components that click into each other. For example, the ability to add nearly infinite memory units to the device as you need them.

Scientific Control

Scientific Control Jonathan Poland

Scientific control is a fundamental principle of experimental research, which is used to minimize the influence of variables other than the independent variable. It is a way of carefully designing and conducting experiments in order to isolate the effect of the independent variable on the dependent variable, which is the variable being measured.

The use of scientific control is essential in order to produce reliable and valid results. Without it, the effects of other variables (called confounding variables) may be misinterpreted as being due to the independent variable, leading to incorrect conclusions.

There are several ways to achieve scientific control in an experiment:

  1. Random assignment: Participants or subjects are randomly assigned to different groups or conditions, in order to control for individual differences. This helps to ensure that the groups are similar in all aspects other than the independent variable.
  2. Control group: A group of participants or subjects is used as a comparison to the experimental group, in order to control for the effects of extraneous variables. The control group is not exposed to the independent variable, and any differences between the control group and the experimental group can be attributed to the independent variable.
  3. Placebo control: A placebo is used as a control in experiments on the effectiveness of medical treatments or other interventions. The placebo is a dummy treatment that is identical in appearance to the experimental treatment, but has no active ingredients. This allows researchers to control for the psychological effects of receiving a treatment, which may influence the results.
  4. Standardized conditions: Experiments are conducted under consistent, controlled conditions in order to minimize the influence of extraneous variables. This may involve controlling for factors such as temperature, humidity, lighting, or noise levels.

By using scientific control techniques, researchers can be confident that any differences observed in the dependent variable are due to the independent variable, rather than other factors. This allows for more accurate and reliable conclusions to be drawn from the results of an experiment.

Innovation Process

Innovation Process Jonathan Poland

Innovation refers to the process of making significant improvements by taking bold steps forward, rather than making incremental progress. This can be applied to various aspects of a business, such as its model, products, services, customer experiences, processes, systems, and practices. The innovation process involves generating a large number of creative and experimental ideas, with the understanding that most of them will not succeed. The most promising ideas are then pursued through a process of design, development, marketing, and launch, with a focus on bringing them to market quickly in order to gather the necessary feedback for rapid improvement. The following are common steps in the innovation process.

Idea Stage

Generating ideas, building them out and filtering them down to your best ideas. Results in a business plan or business case.

Market Research

Cultivating knowledge of customer needs, perceptions, competition, technology and industry trends.

Creativity of Constraints

Early stage constraints designed to direct your efforts. Well designed constraints may stimulate creativity.

Preserving Ambiguity

Avoiding assumptions that aren’t in your constraints. For example, if you’re developing a bicycle, don’t assume it has two wheels.

Idea Generation

Generating as many ideas as possible. Include everyone in your organization.

Creative Processes

Techniques for generating creative ideas such as brainstorming, divergent thinking, thought experiments and counterfactual thinking.

Lead Users

Customers who are pushing your products to their limits are a common source of innovative ideas. They often have pain points that identify fundamental flaws in the way that things are done.

Market Fit

Estimate the value of ideas in terms of market fit including factors such as customer needs and competition.

Risk Management

Identify the risks that surround your ideas. Risks are fully managed though each stage of the innovation process. Risk management is a potent tool for innovation as it is the firms that are taking the biggest risks that benefit most from risk treatment.

Idea Screening

Eliminate or backlog as many ideas as possible such that you are left with your best ideas. Associated techniques include reverse brainstorming, defensive pessimism and prioritization.

Business Case

Begin the process of documenting your best ideas as a business case or business plan.

Testing & Planning

Brave ideas need a significant amount of verification because they are often flawed. Innovation processes are based on lightweight experimentation that explores ideas to find those that are most valuable to your goals.

Concept Testing

Testing high level ideas. For example, a paper prototype for architecture that explores a concept for the form of a building.

Test Marketing

Getting something in front of customers as early as possible to collect qualitative data. For example, a poster for a product idea.

Business Experiments

Designing experiments that will generate data with techniques such as A/B testing. For example, simulate a manufacturing process to benchmark its estimated performance.

Feasibility Study

Research and experiments designed to validate that aspects of an idea are feasible in terms such as cost, time, technology, resources and regulations.

Prototypes

Build partial implementations to support testing and planning.

Problem Solving

The process of resolving problems identified in testing to build ideas out.

Fail Often

One of the key differences between innovation and regular development projects is that innovation expects a large percentage of early stage ideas to fail. Innovation avoids forcing ideas that show little promise. An innovation process might see more than 99% of ideas fail at an early stage.

Goals & Objectives

Developing goals and objectives for ideas that survive testing.

Strategy

Developing strategies to achieve goals and objectives.

Planning

Planning the implementation of strategy. This involves completing a business case, documenting requirements and project management processes.

Design & Development

Innovation is often based on the design prowess of a team. A creative director who has launched dozens of unusually valuable products may drive innovation for a firm. In terms of development, innovation is usually about prioritizing work to develop and operationalize small chunks of functionality on a weekly or monthly basis.

Creative Direction

It is common for innovation to fall under a creative director for design and implementation. Generally speaking, innovation requires creative talent and can’t be easily systematized.

Parallel Design

Creating multiple designs for the same thing in a competitive fashion.

Iterative Design

Designing things, using them and designing them again.

Transition Design

Innovation is often a bold vision that can’t be implemented all at once. Transition design is used to identify meaningful and achievable steps that pull off large changes that would be impossible all at once.

Charrette

An intensive group process of delivering design work.

Backlog

A backlog of requirements to be implemented in future. It is common for a backlog to grow large with no expectation that all the work will ever be completed. The backlog is allowed to grow at any time and is prioritized with each design and development cycle.

Sprints

A short development cycle that creates working items that can potentially be operationalized.

Minimum Viable Product

The minimum set of functions and features that allow you to get the product in front of customers.

Quality Assurance

The end-to-end process of achieving the target level of quality in products and services. This includes processes such as testing and quality control.

Ship Often

Getting things out so that they can be rapidly improved.

Marketing & Launch

The process of generating demand and launching products and services.

Target Market

Identifying your customers. If an innovation is disruptive in the sense that it requires customers to change their ways, it will be hard to sell. In this case, a target market will typically be early adopters such as enthusiasts of your product category.

Branding

The process of developing brand identity and brand awareness.

Promotion

Demand generation using communication processes such as public relations, advertising, events, relationship marketing and strategies to spark word of mouth.

Distribution

Methods of selling and delivering a product or service.

Pricing

Pricing models and strategy.

Market Penetration

The process of gaining market share for a new business, brand, product or service. For example, promotional pricing and free trials. In some cases, market penetration requires skilled personal selling.

Pilot

Launching an innovation on a limited basis to manage risk, gain experience and collect data.

Moment of Truth

A customer interaction that is predictive of the success of a product or service. For example, audience reactions to the screening of a film.

Feedback Loop

Establishing ways to collect data from customers. For example, a firm that knows the top five customer pain points with a new product within a week of launch.

Launch

The full commercial launch of an innovation.

Operations & Management

The day-to-day process of managing innovative products, services, experiences, processes and environments.

Sales

Reaching your target market to sell a product or service. Includes managing customer relationships and related processes such as voice of the customer.

Operations

The process of delivering a product, service, process or experience.

Innovation Metrics

Business metrics that are relevant to innovation such as time to volume.

Innovation Management

A fully scaled innovation process may have all of the steps above running in parallel at all times. Innovation management is the practice of directing and controlling the innovation process.

Product Management

The regular process of managing a product such as monitoring competitive threats, pricing and positioning.

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