Thursday, February 21, 2008

Discovering New, Untapped Markets

What's common between Southwest Airlines, McDonalds and SUVs?!

The promise of new, untapped markets is something of a holy grail for every business. It conjures up dramatic growth opportunities from creating products that serve unfulfilled needs of existing customers, or attract new customers.

As will be their wont (!), management thinkers have devoted enormous energies toward creating frameworks and approaches that help practitioners innovate in opening up such untapped markets.

One leading body of management thought that has emerged in recent years, that aims to help companies fan out into hitherto undiscovered markets is Blue Ocean Strategy. Created by the famed duo of W. Chan Kim and Renee Mauborgne of INSEAD, France, this is a set of frameworks and techniques for opening up such new markets.

The horse sense view on this topic, however, is that it should be possible to keenly observe some innovative new products, and discern a few simple themes that led to the discovery of the previously untapped markets that those products were introduced to serve.

Such a 'simple theme that leads to the discovery of a previously untapped market' must, in my view, meet at least the following criteria:

- it should be shown to have led to truly successful products
- it should preferably have been used by innovating companies spanning a variety of industries, and
- it should be simple to for a innovation-hopeful company to implement.

One such theme that I have discerned, by observing a few innovative products that have emerged in various industries over the past several years, is what may be called innovating in the interstices. Simply put, it means that you target the interstices between existing, adjacent markets.

Hyatt was using similar thinking when it launched it's Hyatt Place brand of hotels in 2006, to blur the distinction between business and leisure hotels. The Premium Economy class of travel offered by many airlines, designed to cater to passengers whose preference (and affordability) lies in between regular economy and business class is another example.

And as I show in my post on the Infosys blog, such an approach has been used with great success by Southwest Airlines, McDonald's, the Indian auto major Tata Group, and other innovators.

And so, one may not need to look into the wild blue yonder for those blue oceans - they may be much closer, in the white spaces between familiar, adjacent markets!

Friday, February 08, 2008

Unleashing Innovation, the Unplugged Way

In the lexicon of modern-day business, innovation and isolation are firm opposites

A strong lesson that efforts at innovation have taught in recent years is, don't go it alone. In fact, innovation is best done by opening out, inviting fresh perspectives, admitting new participants, and allowing new combinations.

Most of the major new approaches to innovation that have emerged over the past few years - Open Innovation, "Crowdsourcing", Co-creation, User-centric Innovation - embody this more-the-merrier feature. The development of the fabled iPod, Proctor and Gamble's Connect-and-Develop initiative, IBM' s innovation ecosystem and Intel's lablets and corporate venturing approach, Innocentive, the Collaborative drug discovery project , IDEO's design philosophy, IKEA's fabulously successful approach to furniture design, the creation of the Linux operating system, all exemplify one or other of the above approaches in action.

Because these approaches to innovation - Open Innovation, "Crowdsourcing", Co-creation, User-centric Innovation - have a similar principle underlying them, I thought it's a good idea to collect them under one umbrella term - Unplugged Innovation. To better understand why such a new term is needed, and how companies can thrive in this brave new world of unplugged innovation, see my post on the Infosys blog.

This unplugged approach is one central theme that has emerged in innovation over the past few years. There are two more such themes, which I will elaborate on over the next few weeks on that blog.

And so, the lone innovator is firmly a thing of the past. If you want to unleash innovation, unplug it!