The internet is full of definitions of innovation, long, short, good, and bad, emphasizing specific aspects of innovation that the author considers important in his field of expertise. To quickly get to the core of innovation, Merriam-Webster provides a good definition:

The introduction of something new

It summarizes the fundamental aspects of innovation: novelty, and implementation. Only when it’s brought into existence, a new idea becomes an innovation.

In most cases, innovation is incremental. In those, the implementation is done through the existing organization, to the existing customers, through established channels. The implementation requires an update or changes in that chain, but those processes are well known.

The interesting cases are those where the novelty is further away from the state of the art, the changes in the organization, value chain, or business model may be major, and the established innovation processes may no longer be suitable. Such radical innovations can have a very high impact on the market with the corresponding reward for the innovator, but successful cases are very hard to find.

In this article, we will explore a few aspects of innovation and provide ideas on how to approach the topic. But note that in the end, innovation beyond incremental is still hard and rare.

Ideation

In the innovation process beyond incremental (to avoid the beaten term ‘radical’ or ‘disruptive‘), it all starts with a good idea. Some innovation experts claim, that the introduction part is more important than ideation, but without a good idea it doesn’t even start.

Many innovations that introduce significant advancements in an area are a combination of components that have already been around for some time, but that are now combined into a new solution. Some components may origin in an adjacent or even more distant application, and can be transferred, re-interpreted, and combined. Very often we observe, that such a transfer, mostly a technology transfer, is pushed into the new application (technology push). The expert in one area is promoting the solution in an area where he or she lacks the domain expertise. Very regularly, the state of the art in that area is then neglected, and a solution is pushed that is not needed, because the current solution is sufficient.

To avoid this, ideation can be improved by forming diverse teams, comprised of both domains (typically from the technology and from the application domain). The mode of operation in that team shall not be that the domain experts tell the technology experts their challenges to be solved, but both parties have to understand the domain challenge and the technology potential in order to find an innovative solution. This solution may not be addressing the challenge initially stated by the domain expert, but something that fits better to the capabilities of the technology.

MaxVO – Maximum Viable Offering

Once an idea is considered worth investigating, current innovation approaches propose to go for a proof of concept, and then implement a minimum viable product to test the idea in the market. We suggest a variation of this process: Before diving into the implementation, we propose to envision a ‘Maximum Viable Offering’. What do we mean by that? The MaxVO describes the offering in a distant future when all features have been implemented, and it reaches maturity in the most challenging markets that are intended to be addressed. The MaxVO does not only describe the product features. By referring to it as the Maximum Viable Offering (MaxVO), we indicate that it includes product as well as services, or a combination thereof.

When describing the MaxVO, you should try to imagine the world where it is successfully brought to the market. This description should contain:

• What has to be true outside your control for the product to be successful?
• Who is buying the product, and why? What are the values provided?
• What would potentially be a competitive alternative?
• What would it take to build and deliver the offering?

That allows you to not only sharpen your view on the future market (segmentation, needs, and values), but also to recognize what it takes to sell and deliver this offering.

Demonstrator

With the clear idea of the MaxVO in mind, you’ll probably have to convince stakeholders that this is a good idea. In many cases, particularly if there’s a significant amount of magic technology involved, it is difficult for stakeholders to comprehend why your idea should be different from anything known today, and what value it would bring to the customers, and to the company.

For that, you have to go beyond PowerPoint. Very rarely do slides convey the full beauty of the MaxVO. To achieve that, you require a good demonstrator, a setup that looks and feels like your MaxVO, and in the best case also implements some key aspects in a tangible form.

Think of the demonstrator as a concept car shown at a trade fair: the main ideas are clearly visible, and there are plenty of shortcuts taken where functionality is involved that is non-differentiating or well known. The demonstrator should open the eyes of the stakeholders to create the trust that this is a good idea worth investing in.

You may have to convince management first, but at some point that very same demonstrator can be shown to advanced customers, or investors if additional money is required.

Note, that although the demonstrator contains implemented functionality that may even address a significant problem that was solved on the way to building it, it has no production quality whatsoever. The demonstrator is a demonstrator, and the production quality offering has to be developed from scratch, discarding any demonstrator functionality.

MVP – Minimum Viable Product

To build something that has production quality, the way to go these days is the minimum viable product, the MVP. In the framework presented here, the MVP is the first step towards the MaxVO. It should implement the core functions of the idea that find initial market acceptance.

We would like to emphasize here, that the MVP is not the implementation of minimum functionality in all aspects. Those minimum functions may end up creating a product that does not find a market at all. Instead, we propose to go after the fully viable product for the market with suitably low requirements. This may require some functions to be fully implemented on the level of the MaxVO, for example the entry requirements into the market.

The key in creating an MVP is the identification of the minimum viable market segment, and then cover all the requirements demanded by these customers.

Take for example a predictive maintenance offering for industrial equipment. The MVP may address only a subset of possible failures for only a subset of the installed product lines. But it may require the same cyber security features as the MaxVO.

As the MaxVO not only defined the product functionality, but also the required internal delivery functions, the MVP definition should also take the first step in building up an organization that can translate into the one that will be capable of handing the MaxVO

Roadmaps

The roadmaps from MVP to MaxVO then need to cover all aspects of the MaxVO:

• market segments served
• company capabilities to develop, deliver, support
• product functionality
• supporting services

What makes the roadmaps difficult is furthermore the fact that a really innovative product is addressing future requirements, hence the market segments served may not only be particular verticals, geographical areas, or size of customers, but also their willingness to move forward with new solutions.

As the company learns from the MVP, the roadmap may adapt, and the MaxVO may change its shape. To continuously keep track of the latest learnings, customer feedback, and competitor watch will lead the adaptation of the MaxVO to keep the focus on the future and not get distracted in technology playgrounds.

Christopher Ganz

Christopher Ganz hat in über 30 Jahren in der gesamten Wertschöpfungskette der industriellen Innovation Erfahrungen gesammelt, davon über 25 Jahre bei ABB. Sein Fokus liegt dabei auf der industriellen Digitalisierung und deren Umsetzung in Service Geschäftsmodellen. Als einer der Autoren der Digitalisierungsstrategie von ABB konnte er auf seine Arbeiten in der ABB Forschung und im globalen ABB Service Managements zurückgreifen, und unterstützt heute Unternehmen in Innovationsprozessen.