The Innovation Triangle: A Fix for our Ramshackle House of Innovation

Everyone here seems to know the story of the house on the hill. The rambling log structure with its undulating staircases, umpteen balconies and fun-house warren of half-finished bedrooms has for nearly 30 years loomed over the Buffalo Bill Cody Scenic Byway…’There were no blueprints—the endless additions were all off-the-cuff.’ “

– Sarah Maslin Nir, The New York Times

The Smith Mansion in Wapiti Valley, Wyoming, is a large, rambling mansion, constructed piecemeal over many years. Known locally as the “cowboy mansion,” it now sits uninhabited and in disrepair, its only potential value lying in its appeal to tourists – and as a useful lesson to innovators.

The science and art of innovation have evolved significantly over the several decades since Clayton Christensen jumpstarted the movement with his theories on the innovator’s dilemma. Many useful methods and tools have since emerged, yet they have been ad hoc additions, lacking an overarching blueprint. As a result, most corporate innovation systems today are incomplete and fragmented, with much of this fragmentation occurring, not surprisingly, along functional lines.

We are now in need of a holistic, integrated and streamlined framework for innovation if we want to realize the full potential of our innovation investments. The Innovation Triangle is proposed as a conceptual framework for this integrated, streamlined architecture. The Triangle encompasses the three fundamental legs of innovation – technology, business model and experience – that collectively impact the degree of adoption of any new thing. The Triangle also spans both sustaining and strategic levels of innovation.

Integrating three very different types of innovation isn’t easy. However, the three legs of the Triangle are highly compatible from the standpoint of the customer or end user, at times even indistinguishable from each other.

Technology is a key enabler of strategic innovation. Most major strategic innovations are rooted in new or emerging technologies. This type of innovation has the added benefit that technological invention can be protected by law in most major markets around the world, which reduces the risk to large investments over time without fear of copycats. Technology innovation favors the “durability” aspect of strategic innovation.

Business model is also a key enabler of strategic innovation. A company’s existing business model can prevent a new technology innovation from being adopted and, similarly, a new business model can often enable an existing or new technology to be adopted. The clever technology in the Apple iPod might never have been appreciated without the iTunes business model.

Experience innovation tends to be a more prevalent factor in sustaining innovation, where a novel aesthetic or superior usability can boost the popularity of an existing product or service. However, interactive experience innovation also can deliver at the strategic level. Mert Lawwill’s rethinking of conventional bicycle design to enable rugged off-road use spawned the entirely new mountain biking industry and outdoor sports genre.

Apple has repeatedly demonstrated its mastery of the Triangle framework. The iPod is a now iconic illustration of the integration of all three legs of the Triangle. The original Toshiba 1.8-inch disk drive innovation was critical to its pocket size, song library capacity and song retrieval speed. The user experience, both emotional and physical, greatly exceeded that of prior MP3 players. Finally, the iTunes music delivery service, which created a new business model incorporating the major recording labels, was essential to making the device easy to use for millions of consumers.

Adding depth to the Triangle with sustaining and strategic innovation

In addition to the three legs of innovation, the best innovators also create and pursue opportunities at two distinct levels – sustaining and strategic. In the illustration below, these two levels of innovation are differentiated by the newness of an opportunity to both the external world (y-axis) and the internal organization (x-axis).

The aim of sustaining innovation is to protect a company’s competitive position in the market and does not significantly alter the internal or external status quo. It is essential to survival and can be seen as the engine that generates the financial means to pursue strategic innovation.

The aim of strategic innovation is to create durable long-term advantage, potentially disrupting the prevailing industry status quo, fending off disruption or creating entirely new growth businesses outside the core business. The critical challenges for strategic innovation are the uncertainties related to external adoption and internal resistance to change.

Some companies also pursue speculative innovation, such as Alphabet’s “moonshot” Project Loon (internet connectivity via high-altitude balloons), but few have the risk tolerance, patience or financial wherewithal to pursue this truly ground-breaking type of innovation. Even Google restructured itself into Alphabet in order to separate its core business from its more speculative ventures.

Designing and building the Innovation Triangle

Four elements must be incorporated when establishing any new organizational capability. The same is true for designing and building the Innovation Triangle system.

  • StrategyHow you to intend to win at innovation, including vision, mission, objectives and scope of your innovation efforts.
  • Organization – The organization design, including reporting relationships (both solid and dotted line), resource levels and decision authority and decision-making mechanisms.
  • Operation – How the capability will be deployed through processes, activities and tools, including metrics for tracking how well the capability is delivering results.
  • People – The roles, responsibilities, skills and mindsets of the people who will support the new capability. This element includes competencies, leadership and culture.

A truly integrated system of innovation must encompass the three legs of innovation – technology, business model and experience. Many significant innovations in recent memory have relied on all three to achieve their success, yet few companies today have established a holistic and integrated model of innovation in their organizations and so the truly significant, game-changing innovations tend to be random and inconsistent.

Adding an orthogonal dimension to our framework captures the important distinction between sustaining and strategic innovation – the durability of competitive advantage – and helps integrate the three legs.

But without the four elements of capability – strategy, organization, operation and people – companies will continue to be challenged to effectively design, build and use this new integrated Triangle model of innovation. It is a model all businesses will need to pursue to effectively compete in today’s rapidly changing business environment.

Two decades after Clayton Christensen’s groundbreaking work, the innovation community’s house is in dire need of reconstruction. We stewards of innovation – companies, academic institutions and professional service firms – urgently need to define a simplifying and integrating architecture to begin to make sense of the rambling rooms, staircases and hallways in our house. The Innovation Triangle offers just such an architecture. What type of house will you build?

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