Today the only certainty is uncertainty.
From climate change to food shortages, from pandemics to lack of trust in our leadership and institutions, there's a lot keeping us up on our way to 2023.
What needs to change (and what doesn’t) when it comes to bringing new products, services, and business models to market in 2023? What and how to adjust to better and faster speak to our customers and meet their needs? What’s the best way to leverage new technologies?
During The Innovator’s Handbook 2023 launch event, we discussed these topics with Tom Waller (Senior Vice President of Innovation at adidas) and Tiffany Vasilchik (Chief Growth Officer at Board of Innovation).
How To Seize Opportunities For Innovation In 2023?
In order to survive and grow, corporates need to innovate- or, as they say at Board of Innovation, "make what life needs next". Customer demand for new products and services that are more efficient and better aligned with their lifestyles, values, and aspirations is rising in every industry.
Whilst the need to innovate is not new, what is changing is how organizations innovate- the way they imagine and create new products, services, and businesses. All the breakthroughs in science and technology and the need to work iteratively in crisis-prone times are pushing our innovation strategies and approaches to change rapidly. So the question is not "why meet customer needs?"; instead, it is "how to better (and faster) meet those needs?”
Streamlining Portfolios: Moving Away From What Is No Longer Serving The Business
As innovators, it’s our job to understand what customers and what we can do to serve them based on what we’re qualified to do. However, our focus is usually on what can be done, rather than what should be done. And, as a result, our innovation portfolios tend to be quite large and less and less strategic. According to Tom, streamlining our portfolio is the first thing to do in 2023 to increase customer satisfaction and speed up the overall innovation process.
“If you cannot demonstrate that a project has the potential to win hearts, minds, and wallets, then park it or put it on a different path”.
To assess the current portfolio, adidas periodically deconstructs every project through the lens of the Lean Canvas model. Recently, they’ve cut down the portfolio size by 50%. This way, the company can reallocate talent and resources and put more emphasis on what really matters to them.
Ideally, a balanced innovation portfolio should be composed of both linear projects that protect and grow the core – “otherwise, you lose the support of the company”, says Tom – and more lateral projects that explore new opportunities.
Using Technology Differently (and More Efficiently)
The purpose of technology in 2023 will be to facilitate and deliver solutions, not to drive demand.
Historically, adidas has been excellent at bringing new technologies to life. Yet somewhere down the line, they realized they had become so good at developing technology that it overtook the ability to comprehend their consumers. As Tom shares, adidas often released technology and then evolved it in real time as people responded to it. Today that has changed.
“Problems and needs must be identified and deconstructed before attempting to develop a new technology. You should never retrofit and try to find a reason for using your innovation”.
“Consumers are sensory beings who can teach us a lot about our innovations. It all comes down to understanding them”, says Tom. Hence, corporates should invest more in research and recognition of the human condition to create unique and distinctive products and services. Only then can new technologies be developed.
Mapping the Ecosystem
There’s no way we can solve today's biggest challenges alone. Complex obstacles always call for ecosystem thinking. That’s why Tiffany firmly believes that mapping and understanding the entire ecosystem where we play is an essential feature and element of success in 2023.
“You can’t create a compelling user experience, meet customers’ unmet needs, and elevate their desires unless you map your ecosystem first”.
Mapping the ecosystem equals understanding all the connections between the inputs, outputs, and stakeholders involved as well as acknowledging the value exchange and how our corporate can facilitate that. Seeing all things as interconnected, spotting patterns, and developing a more holistic perspective can help us identify where to concentrate our efforts more and spot opportunities accordingly.
Strategic Agility
Tiffany outlines that strategic agility – i.e., the ability to respond quickly and appropriately to changes while maintaining focus and flexibility – is the key to future success. To better explain this concept, she briefly shares how Loop, a company that creates earplugs to reduce the harmful noise of music at concerts, has brilliantly survived the pandemic.
Before COVID hit, Loop was doing incredibly well. But their business plummeted when everything shut down and the concerts were canceled. At that point, Loop came up with a different use case and targeted their earplugs to different audiences. They have in fact intercepted the need of people who work from home to filter out some noise around them to stay focused. That’s how they survived and thrived in a time of deep crisis.
In a nutshell, having agility in our product is essential, but it's not enough. What we really need is to be strategically agile. That’s why every three months Loop still looks at their strategy and the exogenous factors that could impact the business to adapt and fine-tune what they're doing.
Tom echoes Tiffany and specifies that, within corporates, strategic agility (and the freedom to explore that comes with it) calls for very clear boundary conditions, mainly regarding resources that can be used.
“An open checkbook and total freedom to interpret the world is great if you’re a startup. But it doesn't help to move a corporate toward the direction it needs to go. Corporates need lots of little tweaks in the right direction”.