Archive for the 'Innovation Amplitude' Category

Pyramid of World and Industry Rockers

I believe that some business leaders are the world’s crowning jewels of innovative leadership, and they each cast a long shadow. Mixed in with their mortal blood is a spark of something revolutionary that propels them toward greatness – a drive and a passion that not only fuels, but actually enables their genius. They are all poster children for my Wave Thinking™ process.Industry Rockers

Here’s what I call Pyramid of World and Industry Rockers. Following the World Rockers, the second tier of remarkableness are the Industry Rockers and theyinclude Microsoft’s Bill Gates, GE’s Jack Welch, Virgin Airlines’ Richard Branson, Wal-Mart’s Sam Walton, and Berkshire Hathaway’s Warren Buffett. The fourth tier includes Proctor & Gamble’s A.G. Lafley, Cisco’s John Chambers, Google’s Larry Page and Sergey Brin, Facebook’s Mark Zuckerberg, Twitter and Square’s Jack Dorsey, and others like them.

I initially thought to only include those who are living, but I had to make two exceptions because of their astounding achievements. If you can reinvent four industries, or start from scratch and build the largest company in the world with revenue of $466 billion and 2.2 million employees, then I promise to include you in my future hierarchy too.

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Eruptive Innovation Trumps Disruptive Innovation

Over the last 35 years, I’ve researched the fields of innovation, leadership, strategy, and many related areas by reading hundreds of excellent books and thousands of articles, and most important, talking with literally thousands of business executives and top managers.Innovation Hierarchy

I challenge you to find an executive of a Fortune 500 company who disputes that innovation is the fuel for growth. On the other hand, with a few exceptions, almost all rate their own companies poorly at it. And rightly so. Clayton Christensen and Michael Raynor in their book The Innovator’s Solution report: “Study after study concludes that about 90 percent of all publicly traded companies have proved themselves unable to sustain for more than a few years a growth trajectory that creates above-average shareholder returns.”

Business gurus speak of quite a few levels of innovation. From my research, I’ve developed a new framework that I call the Innovation Hierarchy. We’re all familiar with the first four levels of the Innovation Hierarchy:

  • Level One is Sustaining Innovation: Regular improvements that keep you moving forward, but not necessarily ahead of the competition. Keeping up with the Bezos, so to speak.
  • Level Two is Incremental Innovation: Medium-sized improvements that benefit both your customers and your company. This can keep you slightly ahead of the competition, or if you are behind, help you catch up a bit. But, as shown in my previous cartoon, if a rogue wave of innovation hits your industry, you’re sunk.
  • Level Three is Breakthrough Innovation: This is not based on novelty. As I define it, “breakthrough” results in step-change in both customer value and a company’s financial performance.
  • Level Four is Disruptive Innovation: Coined and defined by Clayton Christensen of Harvard Business School in 1995, it is game-change in an industry or a field such as education or health care. It is often created by providing the same or much better value to customers at a massively lower cost and price.

There is no question that disruptive innovation can change the rules of an entire industry, and rapidly create new winners and losers. Up until now, it has been the dream of any business wanting to win big. I would argue, though, that there is yet a higher level of innovation – a fifth level of the Innovation Hierarchy …

  • Level Five is Eruptive Innovation: It doesn’t just change an industry. It creates change so big and broad that it affects the world, the planet, society at large. History is replete with hundreds of eruptive innovations. Most advancements of mankind were due to one. Examples include fire, wheel, agriculture, ship, railroad, automobile, semiconductor, computer, robot, Internet, Cloud, and the smart phone. These do not just change industries; they change humanity.

The value of any framework is that it serves as a gauge to help you understand where you are and as a guide to show you what more you can achieve. Many businesses set their sights on achieving Breakthrough Innovation but most accept Incremental Innovation as “good enough.” After all, achieving Breakthrough Innovation takes vision and the ability to think and act “out of the box.” Yet beyond Breakthrough, there is no question that Disruptive Innovation can change the rules of an entire industry, and rapidly create new winners and losers. Until now, Disruptive Innovation has been the dream of any business wanting to really win big. Yet few businesses aggressively seek the even higher level of Eruptive Innovation. Truly visionary business leaders accept nothing less than Eruptive Innovation.

So what level of innovation is your company striving to achieve?

Innovation Amplitude: Succeed Even in this Tough Economy

Why do some companies consistently outperform their competitors? It’s because they innovate and execute better than the rest. Peter Drucker once said, “The enterprise that does not innovate inevitably ages and declines. And in a period of rapid change such as the present, the decline will be fast.” Poignant in past times, and even more imperative today amid today’s brutal economy and hyper-competitive markets.

What is the secret of these master innovators such as Apple, GE, HP, P&G, and Virgin? Fifteen years of research studying remarkable leaders and innovative organizations has revealed to me it is one thing. They have much greater Amplitude. In mathematics, Amplitude is the height and depth of a wave, which generates its intensity. In the X-Games, judges and spectators often use the term Amplitude to describe the heights of the jumps of skiers, snowboarders, BMX bikers, and skateboarders, as in “Boy did he get some amplitude!.”

What I discovered is that remarkable leaders and organizations have immense Intellectual Amplitude as well as enormous Emotional Amplitude. They apply them by:

1.        Digging deep with intellect and compassion to identify and excavate unmet market needs ahead of competitors (negative Amplitude)

2.        Leaping high with ingenuity and passion to develop imaginative solutions (positive Amplitude)—whether they be products, services, or other advances

3.        Completing the process by testing and selecting the best concepts to implement, and marketing them with the same innovative zeal as they employed creating them.

The sum total of this process is an organization’s Innovation Amplitude. And it can be measured, understood, and with this knowledge, increased. I have presented this concept to over 10,000 CEOs and managers around the globe and have received 99.9% confirmation that it’s the real deal.

What about the non-innovators? People and entire companies are sometimes accused of “thinking inside the box.” Well, the box is not just a metaphor. I claim it is real: a low Amplitude. So the challenge is to lead your entire organization out of the box by increasing its Innovation Amplitude.

Innovation is change for the better. Change management expert Rosabeth Moss Kanter stated: “Mindless habitual behavior is the enemy of innovation.” British politician Harold Wilson put it even more strongly: “He who rejects change is the architect of decay.”

Some today contend the USA is losing its competitive edge. Competitive strategy expert Michael Porter says, “Innovation is the central issue in economic prosperity.” In this age of innovation, we all need to work together to do two things:

1. Discover America’s inner strength

2. increase America’s Amplitude.

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