New digital technologies have emerged over the past decade to help companies think outside the box and develop more novel products and services. Two forces driving this change, according to two business professors, are tools such as 3D printers and cloud-based design programs that help users develop prototypes and bring products to market more quickly, and web programs such as Slack, a messaging app, and Dropbox, an online file storage platform, that make it much easier for people to collaborate.
The professors said that these factors have created the “perfect storm” to help companies expand their ability to think creatively and generate new ideas. And they have written a new book to show managers and executives how to implement changes at their companies that will lead to better products and services that can be commercialized faster.
“These two forces of digitization and collaboration that have come together over past 10 years have completely changed the way companies can approach innovation,” said Tucker Marion, a professor of entrepreneurship and innovation at Northeastern. “We came up with a framework for how companies can use these different approaches to the innovation process at different times, and how there are challenges and opportunities for companies as they strategically navigate how they can innovate.”
In their new book, The Innovation Navigator, Marion and Babson College professor Sebastian Fixson identify four strategies, or modes of innovation, that companies can employ to transform their organizations in an era of unprecedented technological change.
- The “specialist mode,” in which companies that specialize in specific products use new technologies to improve those products and advance their competitive advantages in the market.
- The “venture mode,” in which companies expand the entrepreneurial culture within their organizations by encouraging their employees to try out these new technologies.
- The “community mode,” in which companies invite their customers and others outside their organizations to help generate new ideas and design products.
- The “network mode,” in which companies increase the number of their collaborators to include outside organizations, universities, and government with which they’ve developed close relationships.
Marion and Fixson studied how hundreds of companies, big and small, have tried to use these strategies to develop novel products and services in the past. In their book they provide examples of how some companies succeeded—and others have failed—at exploring these methods.
Apple, they said, succeeded in the “network mode” by developing the iPod by bringing together its internal technology departments and external suppliers and ventures to design and refine the product, which launched in 2001 and by 2007 accounted for one-third of the tech giant’s revenue. Apple has continued to use this approach to develop many other products.
“Being successful at innovation requires a long-term perspective, and you need to work over time on each of these different modes. The change in culture could take years. There’s not a three-month fix.”
The professors said that Boeing’s development of the 787 Dreamliner exemplified the difficulties of attempting to expand into new modes of innovation—in this case, going from “specialist mode” to “network mode.” The project went billions over budget and took several years longer than expected to reach the market, in part, they said, because Boeing placed too much control of the innovation process outside the company by outsourcing more of the supply and design of the aircraft’s parts than it had when developing other planes.
The book outlines the opportunities and challenges each mode presents, describes how the modes can be implemented, and offers questions for executives to ask themselves in order to better understand whether their companies are prepared to expand into new modes. The goal, Marion said, is to help companies become more comfortable using one or a combination of these modes of innovation in order to be more successful in the future.
“We are [experiencing] very dynamic changes due to technology, competition, and disruption for many traditional industries,” Marion said. “Companies need to be faster and more agile. They need to respond more quickly to these changes by adding new and diverse actors to the innovation process that can help. They also need to get the most out of their employees.”
Marion and Fixson have led workshops at engineering firms, software companies, and the U.S. Navy to train leaders to make their organizations more innovative. In these trainings, participants play a 30-minute online game that simulates the innovation process and exposes players to the innovation methods outlined in the book.
Marion said that there’s no “silver bullet”to help companies learn how to become great innovators. “Being successful at innovation requires a long-term perspective,” Marion said, “and you need to work over time on each of these different modes. The change in culture could take years. There’s not a three-month fix.”
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