Professor Bart Clarysse & Dr Jana Thiel
Are you an analytical, experimental, or visionary innovator? Knowing may help you write your next business case.
Faced with challenges like technological disruption and changing patterns of consumer behaviour, big corporates know they need to innovate or be left behind.
Across the world corporate incubators and accelerators are being established, innovation teams expanded, projects launched, and startups founded and funded. Leaders and investors have high hopes and companies such as Google, Amazon.com, and Tesla are setting the benchmark. However, innovation initiatives often fail to live up to sky-high expectations.
We have studied how companies approach innovation and can suggest three models used by companies when developing business cases for innovation initiatives: analytical, experimental, and visionary.
We hope these models will help you decide which innovation strategy (or combination of strategies) is right for you given your tolerance of uncertainty, timescales and desired outcome.
Analytical innovators develop business cases using methods familiar to executives and business school students. They analyse market trends to identify unmet customer needs and build investment proposals which aim to achieve breakeven typically within a few years. Their analytical approach requires supporting data. This data is often drawn from similar projects in different industries or regions of the world. Therefore, the innovative project that emerges might be unknown to the company or its industry but is unlikely to be new in the world.
This approach can lead to successful and sustainable new enterprises in a short time.
But if company leaders want to instigate truly visionary and transformative change they need more than an analytical mindset.
Experimental innovation happens in environments with higher levels of uncertainty. Experimental innovators work on concepts where a future market can be anticipated, but is yet to be activated.
In the absence of data, experimenters take action. Using agile methodologies (for example approaches inspired by Lean Startup or real options reasoning) they introduce ideas to the market by funding, testing and refining prototypes through small proof-of-concept projects. Over three to seven years successful businesses and new product lines can emerge.
Experimenters need patience and the ability to pivot in response to market feedback. They must build a community of supporters to sustain their ideas over time. Corporations that encourage experimentation need mature processes to stop projects that fail and to redeploy resources.
Visionary innovators lead whole movements often inspired by grand challenges like addressing climate change. Perhaps building on past success, visionaries have the confidence and resources to overcome the highest levels of uncertainty and be agents for economic, technological and social change. For example, when Richard Branson started his space program in 2005, everyone was very sceptical. Today the idea that in a few years spacecraft could fly passengers rapidly from one big city to another is no longer surprising.
Visionaries instigate change that brings about corporate renewal and entirely new market segments. However, they must sustain tremendous vision, passion, money and intellectual effort over many years.