How to Fill an Innovation Portfolio
If you’ve been reading our posts on innovation, you may already have gotten your feet under you either by starting a new innovation lab, feeling more confident in being tasked to lead innovation, and getting a handle on your innovation ecosystem. Maybe you’re even off to a great start on most of your program.
You might be thinking, “Great… now what?”
Now it’s time to find some problems to solve or trends to explore! The goals of your program or lab will help indicate how “far out” to go with ideation. Hopefully, you can draw inspiration from these different methods that we have leveraged to build innovation portfolios.
Focus on growing and sustaining competitive advantage.
Your company is in business for a myriad of reasons. Identify areas in which you have the advantage and work to keep them. This could be from any part of the organization, but it should be something that you feel you are best at—think hedgehog principle from Jim Collins’ Good to Great.
Amazon’s patents, commercials and forays into supporting adjacent businesses give us a tangible example of what a whole portfolio might look like. The e-commerce giant reset consumer expectations with fast shipping, easy returns, and a seamless shopping experience. However, they still compete with storefronts in the “I need it now” category (but even that is shortening). While they are ahead of others in “order to door” timing— when was the last time you ordered something online and it took 4 days—they want to maintain that competitive advantage.
Horizon 1: Partnerships with UPS
Amazon and UPS worked together to share order data, accelerate pick up times, and provide return labels in packages. This is all towards the goal of shortening time to delivery and making the experience easier through simple returns, improving customer experience while making the decision to buy online more appealing.
Horizon 2: Amazon Delivery Service
We’ve seen the trucks and we’ve probably seen a few headlines recently—an effective strategy for creating innovation is recognizing what aspects of your value chain you can do yourself. What a great way to shorten the window from warehouse to en route, by owning the vehicles performing the last mile delivery. Delivery isn’t a core competency but it is supporting a competitive advantage, making this a likely adjacent innovation for Amazon.
Amazon Scout AV Delivery Bot
Remember this ad from way back in January 2019 with the adorable little autonomous delivery bot?
You may also recall that it started making deliveries later in 2019. That bot doesn’t just show up in a commercial in January. There’s a good amount of work, experimentation, and validation of many ideas behind it. The innovation here was probably generated from a mix of goals: improve last-mile delivery, competitive advantage focus (maintain and grow delivery strength), technologies (autonomous vehicles), and trends (growing acceptance and use of personal assistants).
Horizon 3: Blimp Warehouse & Drone Delivery
This is probably the most far-out of all of them. Amazon filed a patent for a blimp warehouse leveraging drone delivery… IN 2014! If that’s not free to fail, loosely defined value, and long runway, I’m not sure what is. How many ideation sessions have you been a part of where an idea like this was mentioned and everyone laughs, but then focuses back to “real work?” Those ideas need a place to go. Your innovation program can be it.
“Big, if true”
By now you’ve probably heard someone reply to a news story or rumor with a snarky “big, if true.” Well, use that snark to your advantage to fill a portfolio. Take an emerging tech, a demographic shift, potential policy, or any other trend and turn it up to eleven. Pick a year you anticipate it to reach that and work backward. How is it affecting your industry in that year? Continue using this lens to generate revolutionary horizon three ideas until you have ideas across your risk portfolio.
When working with a large insurer, we did this for two trends: the gig economy and the democratization/ease of transfer of health data.
We asked some big questions about the gig economy. “What if 80% of the workforce is freelance/gig/contract?” An insurer’s main path to revenue – employer-based benefits—is essentially removed. How should the business model change in that environment?
Apologies for the over-simplification but essentially,assessing and then holding risk is the underpinning of insurance. Life insurers do their own gathering of data on an individual or group, perform their actuarial analysis, and push out a cost for premium. Their ability to underwrite and their actuarial analysis is often a point of competitive advantage.
How does that change if they don’t need to collect data? What if they were able to just access EMR/EHR data? What algorithm is necessary? How do systems change internally to assess and report on the data? How do you make a better user experience in this new model?
These questions, driven by trends to create lenses for viewing opportunities, are a great way to fill a portfolio and keep innovation tracking down value.
We’ve helped fill a lot of portfolios over the years. If you have questions about how this may apply to your organization or innovation program, let us know! We’d be happy to start asking some big questions with you.