Reflections on Breakthrough Innovation

Today Forum publishes Breakthrough Innovation: your guide to innovating for a brighter future. Since the start of the year I’ve been leading a small team that brought together the experiences of Forum’s leading partners into a short guide for sustainability champions and innovation specialists to make it happen. These are some of my reflections on the guide and what stands behind it.

The starting point was Forum’s Sustainable Business Model Group (SBM Group), which brings leading companies like Unilever and M&S together to explore how they can create step-change, internally and externally. These companies wanted advice on how to do disruptive innovation with a sustainable purpose. We set about creating the guide.

The fact that leading companies asked us to work on this topic says that practice is at an early stage of development. It also means there is something very difficult but very important for Forum to attempt: move things along to the next stage of development. It is important because the guide might help many companies to try to innovate in a different way – for sustainability-related breakthroughs.

It is difficult because there is little or no agreed definitions, what counts as ‘disruptive’ or ‘innovation’ (or, indeed, ‘sustainability’). The scope is potentially vast. The intended users are practical business people, so they’re not interested in ‘theory’, but without a strong, shared theoretical basis you establish a domain of best practice. Also, there are few real examples to study and draw lessons from.

The story of the research is, first, a narrowing down to a specific definition and scope, then finding digest recommendations and finally testing with users.

The final guide defines breakthrough innovation as “a new product or service that both (1) shifts the market (or creates a new one) and (2) creates superior sustainability outcomes”. There are quite a lot of choices made within this.

The most important was to frame it in terms of outcomes, not process. This take is different from Clayton Christensen, who coined the term disruptive innovation. He defines who uses disruptive innovation to mean “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors.” I wanted to make sure that the purpose of the innovation – for a sustainable world – was never in doubt.

The second narrowing down was on how far along the disruptive innovation process we went. We decided to limit ourselves to the point where something has been piloted and is ready to scale. We did this to focus on what companies could control (sort of): their internal processes and culture for pulling ideas through from twinkles in someone’s eye and then incubating to a working prototype. This did mean cuting out a lot of stuff on how products, services, technologies, business models and so on actually do scale up. I read a lot of Carlota Perez and her brilliant book Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. Its insights and conclusions are similar to Forum’s system innovation approach. Frankly, I would have loved to have a lot more on this – but it was even less developed and was much more external, and so didn’t fit with the insights on how to organise internally. 

At this point we had had the central insight from the interviews and reading: big companies need to make themselves more like smaller entrepreneurs (perhaps as the company had been in the beginning). The three recommendations come out of this:

– have a balanced portfolio, so at least some of the company has the resources to act like an entrepreneur
– embed in your culture, so there is greater permission (formal and informal) to act. There are a page of practical actions. 
– have management structures to nurture and protect, so the entrepreneurial activity is not crushed by the day-to-day. We found 10 such structures.

The final step was testing. First, with the SBM Group themselves. We had venture capitalist Julie Meyer give her take. Then we got these leading businesses to work through our findings. I was nervous but it went very well. The main problem they picked up was in balancing your portfolio. We had said that there was no point putting resources into disruptive innovation that wasn’t about sustainability, as those markets would not endure. They agreed the markets wouldn’t endure – but you can’t control which direction a concept takes. It is impossible to rule something out, so don’t say there’s no point.

Then we expanded the circle of testing to colleagues who hadn’t been involved so far, other business practitioners and academics. There were three themes to there feedback. They liked it. They had some tweaks and to specifics. And they had a question about the framing. 

I admit, some of this questioning the framing was frustrating – especially when people said we hadn’t defined terms when in fact the definition was the third line of the first page. But I realised that the basic reason people were quesitoning the framing was because the topic is at an early stage. We were trying to move people from an isolated partial take to a collective wider understanding, a common platform which enables more people to act. 

Now we are at launch day. There is already some coverage in the trade press. I am hosting an event for Forum’s wider partner base; about 40 companies are coming. My hope is that the event and the report will help companies – perhaps you – move the leading-edge forward, and be the inspiring example for others of breakthrough innovations in a few years’ time.

Please do download the report here and leave your insights below.

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