Leap Innovation: A Strategy to Get Ahead and Stay Relevant

ABSTRACT:
Leap innovation is a new way of looking at innovations in your organization. Leap innovation describes the importance of switching the innovation focus between product, process and business model innovations in order to get ahead and stay relevant.

ARTICLE TEXT:
Staying relevant is a major challenge organizations are facing. Continuous changes in the business environment add new problems to the existing. Dominant players with global reputation for their brands and technologies fade away leaving room for new players to emerge. Being relevant means keeping the product appeal intact, continuing to create value to stakeholders and purposive denial of becoming obsolete or irrelevant.

The importance of innovations for organizations to remain competitive is widely discussed and well accepted by scholars and practicing managers. However, failures in innovation attempts are quite common and raise many questions. Why do firms with innovative products fail? Does market acceptance of innovations alone guarantee continuous success? Is it the innovation strategy that can ensure long term prosperity? With this backdrop, we can argue that it is not only how to innovate that matters but also where to innovate, what to innovate and when to innovate make the difference.

What is leap innovation?

In response to environmental demands organizations tend to shift innovation focus between product, process and business model innovations. Their ability to change innovation emphasize swiftly, hereafter described as leap innovation, has a positive impact on sustainable results. Leap innovation is a strategy an organization will adapt to shift innovation focus pro-actively across products, processes and business models to stay relevant and ensure sustainability. Making these quick movements or leaps enables firms to enjoy the ‘being relevant’ status all the time.

In a competitive market, launch of a new product by one firm will make others also busy to offer similar products with notable differentiations. The first mover has two options to remain competitive. They can either continue with product innovations to increase the perceived value or switch to process innovations. Leaving the challenge of further product innovations to competitors and focusing on process innovations will enable the first mover to enjoy many benefits such as reduced costs, ability to lower the prices, higher profitability and value engineering.

Leading the innovation path always from the front is costly and risky. Leap innovation will enable the firm to piggyback on innovations by others in the epicenter of innovations. First mover can get ready with a process innovation to leap forward where competitors may find it difficult to match in terms of capabilities and cost. Leap innovation can also reduce the first mover disadvantages such as heavy and continuous R&D expenses and risks associated with those investments. Leap innovation enables firms to switch between product, process and business model innovations to get ahead and stay relevant.

A team working towards a common goal naturally promotes convergent thinking. Leap innovation brings the space necessary for divergent thinking to innovation teams and facilitates them to come out from the paradigms they are immersed in. Leap innovation invites firms to dig elsewhere for better value propositions instead digging deeper where you would continue to innovate for the sake of innovating. In other words it assists you to stay relevant.

Attempting to become the dominant player or technology leader in a hyper-competitive market has the inherent risk of being irrelevant. No customer would expect a laser beam for shaving perhaps the distance competing firms will push each other to produce better and better razors. Leap innovation can keep you on track. It gives you breathing space to revisit what you really do as you switch from one innovation type to another.

Making your moves unpredictable

Leap innovations make an organization’s strategy less predictable. The leap can be along the same type of innovations such as continuing with product innovations, or switching to another type such as process or business model innovations. Less predictability can make follower’s life difficult. Mintzberg defines strategy as a pattern observed in a stream of decisions. Leap innovation can make it difficult for competitors to read your patterns. It can also bring an element of surprise making your strategy rewarding.

When competition drives organizations along an irreversible innovation path, showing amphibian movements can take competitors by surprise. Zigzag or back and forth movements will prevent close followers coming closer to you. Leap innovation brings deception as a new ingredient to the strategy recipe. This allows firms to get away from where the common battle is and pushes the firm to emerge ahead of competitors on a different track be it product, process or business model innovations.

Reducing path dependence

Leap innovation challenges path dependence and over reliance on existing competences. Success the firm enjoys today should not be a reason for failure tomorrow. Innovative organizations tend to shift innovation focus continuously across the frontiers of products, processes and business models. Leap innovation emphasizes the fact that innovators cannot rest. They keep on moving, shaking and destabilizing what seems to be stable, dominant or permanent. Leap innovations can avoid Kodak moments your organization may come across.

Leap innovation is a strategy that demands organization wide participation as it does not limit innovation to product teams, manufacturing units or business managers. Although leap innovation has been described as a pro-active measure, it can either be a deliberate or an emergent strategy.

New innovations may need sufficient time to cross the chasm. A firm will face a dilemma whether to wait until receipt of feedback from early majority or to continue to innovate from day one. Pace of technology evolution, payback period, competitor pressure and possible cannibalization effects on products due to own innovations can further aggravate the situation. Leap innovation is a remedy.

Shifting innovation focus should not necessarily happen between products, processes and business models. It may cover distinctly different areas of innovation efforts in the same type of innovation. For an example, a firm that introduced a novel electrical device which significantly conserves energy may next attempt to innovate in an area such as product durability, aesthetics, safety etc.

Where does leap innovation stand?

Leap innovation will have its own space, identity and compatibility within the innovation vocabulary of theory and practice. Leap innovation supplements open innovation by enabling firms to collaborate in R&D in common areas and making room to concentrate on proprietary domains as in-house projects. This enables a firm to collaborate with the others, create synergy and harness from collective efforts while eyeing on differentiations without compromising the risk of leaking out proprietor technologies.

Success of Uber and Airbnb is often attributed to innovative business models they introduced. Even the Indian eye hospital that revolutionized eye care, Aravind emerged decades ago with a powerful business model innovation. However, the ability of firms to defend the competitiveness purely based on business models will eventually fade away compelling them to leap into product and process innovations before it is too late.

Disruptive innovations pause major challenges to incumbent firms. In defending their positions, leap innovation is a useful strategy as it can make competition in one place irrelevant with a leap to another track. A disruptive product innovation signals the incumbents to switch to process innovations and business model innovations. In terms of extent of change, leap innovations can be incremental or radical. A point to note is leap innovations may tend a firm to take few incremental steps at the same time perhaps in a zigzag way to get ahead of the others making it a radical innovation.

The argument in this article

Looking at how organizations behave, we can argue that they switch innovation focus between product innovations, process innovations and business model innovations. The long term prosperity depends on how smartly an organization does the switching. Once a product innovation is well received in the market attracting competitors to work on ways to combat, an organization may next switch to process or business model innovations.

This may not happen in a sequential way. It can be parallel or the focus may oscillate between product and process innovations initially. On reaching an optimum level in those frontiers a change in the business model may give the firm an edge over the others. However, business model innovations are not foolproof. For an example, the power of entry barriers embedded to a business model may deteriorate with time or better technologies. This compels the firm to look back on product innovations and process innovations in creating competitive advantage. Therefore, we see organizations continue to change the innovation focus switching among product, process and business model innovations which is termed in this article as leap innovation. The firm who does leap innovation better will stay ahead of competition and continue to be relevant. Similarly, those who fail to switch between the innovation types eventually fade away despite heavy investments in R&D and innovations. Leap innovation is about what, where and when to innovate than how to innovate.

Insights for managers and researchers

Attempting to innovate for the sake of innovating is a waste of time, money and efforts. The emotional expression by Stephen Elop, CEO of Nokia, “We didn’t do anything wrong. But, somehow we lost”, necessarily signals innovation managers to revisit what they do. The effort by Nokia in R&D and innovations was the dream benchmark for many to learn how to innovate. The collapse teaches us a lesson. Firms must understand where to innovate, what to innovate and when to innovate and this is the essence of leap innovation.

Managers must pro-actively look for innovation space not necessarily in the epicenter where everyone is fighting. If product innovation is common across industry or tends to bring diminishing returns it is time to switch focus on process or business model innovations. In a competitive market where organizations are competing against each other on the same ‘key success factors’ finding a way out will be very challenging. Making competition irrelevant demands the firm to look for areas to differentiate ideally with the use of the core competences built. Lack of space for product innovations should not stop your quest for innovations. Switching to process and business model innovations will be the next option. Leap innovation is about swiftly changing the battleground to explore new horizons before the others, buying time to harness the returns of existing innovations and making your movements unpredictable.

The concept and practice of leap innovation opens new vistas for researchers as well. How do successful organizations switch from one type of innovations to another? Is there any particular pattern they follow? What factors influence the leap innovation strategy? What hinders leap innovation efforts in organizations? These are few questions researchers can explore in understanding leap innovation as a strategy for organizations to get ahead and stay relevant.

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