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Innovation Challenges – Answering the Big Why & Where Qs

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Innovation Challenges – Answering the Big Why & Where Qs

This year’s Consumer Electronics Show featured an amazing new BMW i Vision Dee concept car. The car can literally change color, thanks to “e ink electrophoretic paper” embedded on its surface. This is unquestionably a remarkable technical achievement. My puzzle is what customer problem is it solving and then whether solving that problem is a part of BMW’s long-term business strategy.

These are heretical questions for some. When I first questioned BMW’s concept in a recent conference keynote, I quickly received emails from BMW complaining that I was bounding the space for innovators to explore. They explained that the application of e-ink to vehicle bodies was the brainchild of exactly the sort of independently minded corporate explorer that I champion in my books.

The mental model at work here is that innovation is a process of discovery led by brilliant technologists who should operate with the minimum of constraints. This “inside-out” model gives maximum opportunity for ideas to emerge from these insights. I do not share this “inside-out” model for innovation. I am firmly in the “outside-in” camp that focuses on understanding what the customer is trying to achieve (consistent with “Outcome-Driven Innovation”).

I understand the focus on “inside-out” innovation. Invention is unpredictable and serendipity plays a critical role in the development of breakthrough ideas. I have argued this point with many CEOs and CTOs who got promoted from technical careers and for whom this is a deeply held model. However, I want to separate how we generate the idea from whether we commit resources to its development. Strategy is all about resource allocation. What are the company’s priorities and how do we commit resources to pursue them. Is BMW’s innovation funding following its strategy or is its strategy following its innovation?

According to Statista, design features, like changing the color of the vehicle, rank only 8th on the list of criteria for consumer choice, unsurprisingly vehicle range is top. By this logic, I would expect BMW to be more focused on developing battery-powered electric vehicles that compete with Lucid at 500 miles + or Neo’s reported 600 miles for its ET7 Sedan. That’s the big customer problem of the 2020s, not how do I personalize the color of my vehicle.

Innovation suffers when there is a gap between the firm’s ambitions – the impact it wants to have in the world – and the ideas that get funded. This is innovation’s strategy problem. If the ideas that get funded are not connected to a strategic direction, then the company risks entering the innovation zoo. In the zoo, companies have more ideas than they could ever afford to scale into commercially viable ventures. Many small projects get started, but few go to scale.

At the other extreme, a disconnect between strategy and innovation means that there are too few people working, inside-out or outside-in, to find ways to realize the company’s ambitions. Corporations have a finite number of Corporate Explorers capable of developing new business concepts and championing them through the organizational maze. If they are unclear about “why” they should innovate and “where” the company thinks the most promising areas of opportunity lie, then the odds of making progress becoming very short indeed.

In my new book, the Corporate Explorer Fieldbook, my co-authors, including Tony Ulwick, and I outline a three-step approach to overcoming this dilemma.

  1. Strategy Manifesto – get strategy out of powerpoint and into simple, joined up sentences that everyone can understand. Answer the big “why” in a way that is strategically logical, aspirational,and emotionally compelling.
  2. Hunting Zone – define the areas of highest opportunity for searching for new opportunities that is based on an assessment of major macro trends and the company’s assets, and,
  3. Customer Outcome Markets – define your markets by a customer’s “job to be done;” you are not meeting new needs, you are changing how customers solve problems they already have.

I am thrilled that on September 27, I get to join Tony Ulwick for a webinar to discuss these approaches to closing the innovation – strategy gap in ways that are clear, practical, and highly impactful. I look forward to joining the conversation and please buy the book to be ready for the session!

It is possible that BMW have a clear strategy for the color changing car. They talk about creating an “empathetic vehicle” that “brings the body of the car to life.” As a BMW owner of more than 20 years, I hope this is true and that the i Vision Dee is not a sign that they have lost their way as a company. I do know that young, technically minded talent in Germany have a negative view of BMW. One Munich tech entrepreneur told me recently, “they are the same as an oil company, they are unwilling to take seriously the scale of the threat from global heating.”

The message that the X Flow technology sends is “let’s build a car that can change color, never mind that it isn’t competitive against the best EVs, you can always have it with a gasoline engine!” I do not know BMW’s strategy, but I doubt that its goal is to turn off technical talent and consumers like me. Andy Binns is managing director of Change Logic LLC, a Boston-based strategic advisory firm, and co-author of Corporate Explorer and the new Corporate Explorer Fieldbook. He will join Tony Ulwick for a live webinar on September 27 on Unleashing Growth: How to Define Your Market for New Ventures in Established Companies.

Andy Binns

Andy Binns is managing director of Change Logic LLC, a Boston-based strategic advisory firm, and co-author of Corporate Explorer and the new Corporate Explorer Fieldbook. He will join Tony Ulwick for a live webinar on September 27 on Unleashing Growth: How to Define Your Market for New Ventures in Established Companies.

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