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Look Sideways to Innovate

Wouldn't it be nice to always be ahead of the curve? To be the first mover? To be able to come up with that great new idea; or to create a whole new market or category?

 

Observing what is happening outside - outside your industry, outside your country and beyond this moment in time - yes, outside your comfort zone - is the key. Finding innovation isn't difficult. Turning your head is all it takes.

 

Most organizations are harmfully myopic. They are focused on their industry, their product lines and their direct competition, diligently tasking managers with thorough SWOT analysis (strengths, weaknesses, opportunities and threats) to find new market space. The fundamental problem with this is that it forces organizations to spend valuable resources focusing on meeting competitors rather than finding true innovation or new market space. And this tends to generate only incremental improvements in cost structures, features or quality. So, what happens in this traditional scenario is your strategies end up converging with those of your competition, squeezing the space even further and preventing you from seeing real opportunity. You become reactive rather than innovative.

 

Innovating requires just a small shift in focus. We call it "looking sideways." Once you get the hang of it, your challenge will be to limit yourself to what you can do best.

 

Looking sideways is so essential because we live in a global "replacement economy," one in which victory belongs to the consumer. Experiences substitute for products. Services substitute for products. Products within one industry or country are substitutes in another. Products substitute for experiences. You do it everyday…a nice dinner and a movie or that new cell phone?; remodel the bathroom or take that vacation?; hire a gardner or get that beefy lawnmower?

 

To find innovation in a replacement economy, you must look through the metaphorical vertical walls that stand between industries, geography or time.

 

Examples are the best way of explaining the looking sideways concept. Let's look at a few.

 

Take the example of Motorola and clothing. Yes, two industries that you would not think of as competitive or even complimentary. But Motorola looked beyond the vertical wall of the electronics industry and has teamed up with Benton, a snowboarding outfitter to manufacture Bluetooth-enabled snow jackets, snowboard helmets and eyewear. Being on the slopes no longer means being without your music or being out of touch. It provides wireless convenience in using cell phones, MP3 players or other devices while all bundled up against the cold. And, bigger yet maybe are the social aspects of communication between people and their devices. A new category is born: wireless clothing - and a new socializing concept already dubbed "toothing."

 

You don't have to be a multi-national to go international. My example for looking beyond geography is very close to home and is on a small scale. We were searching for a new webcasting technology in order to offer our clients next-generation corporate communications technology. We decided not to develop it ourselves, and the U.S. market is crowded with competitors who follow each other's feature set and who focus on the technology rather than a communications solution. We looked beyond geography and found the partner we were looking for in Finland. While looking for a new "product" we also found a new client: we now manage their U.S. webcasting operations and distribution, and are helping them to market their products and services in North America.

 

Looking sideways across the time boundary isn't about predicting the future, but rather about observing trends. Most of us adjust to trends by evolution - as events that affect our businesses unfold, we move with the trend, keeping pace with developments. Real innovation comes from observing a trend and then looking beyond today to the value it might deliver tomorrow.

 

nTag found innovation this way. The use of RFID (radio frequency identification) came into the mainstream business news when Wal-Mart adopted the standard for inventory control and required all suppliers to embed these small identification tags into every item Wal-Mart purchased. It provides a more cost-effective way to track inventory and tap into its inventory networks. Hmmm. Smart objects that broadcast inventory information about themselves? nTag looked at the potential value the trend will have in the near and near-distant future. They applied it to interactive name tags into which event attendee information is embedded and that "talk" to other name tags in the room. It helps attendees at events, conventions and meetings network more effectively; it captures lead information and streamlines polls and surveys during the event; and helps event coordinators track and report event details, among many other things. It reduces some of the frustrations, cost and inefficiencies of attending and organizing events. Old products will be made new, and entire markets will grow up around this trend. nTag has already positioned itself as a first-mover.

 

There are certainly many other vertical barriers that keep us from looking sideways, but industry, geography and time are easy verticals to identify and work with as you brainstorm for opportunities. There are lots of examples all around you of breakout ideas. Gather a few and identify the barriers they made permeable. Begin to really observe what's happening outside. You'll find new thinking and new space between the walls.