Almost all CEOs and marketing executives feel that innovation is a critical component of corporate success. Yet, most senior managers have a pretty narrow view of innovation – they feel that it is all about new product development or traditional R&D. The danger of this myopic view of innovation is that it can, over time, erode competitive advantage. Most companies within an industry start copying best practices resulting in the commoditisation of the industry.

Innovation in business should be viewed on broader terms than just product and technological innovation. In a 2006 article in MITSloan Management Review – The 12 Different Ways for Companies to Innovate – Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz argued that to avoid innovation myopia, companies should look at customer outcomes that result from innovation; this would mean looking holistically at all possible dimensions through which an organisation can innovate. They defined ‘business innovation as the creation of substantial new value for customers and the firm by creatively changing one or more dimensions of the business system.’ This led them to conclude that business innovation has three important characteristics:

• It is about new values, not new things.
• It comes in many flavours.
• It is systemic.

Based on this, Sawhney, Wolcott and Arroniz presented a 12-dimension framework through which a company can innovate. These are:

1. Offerings: Development of innovative products and services.
2. Platform: Usage of common components to create different products. For example, Disney creating animated movies.
3. Solutions. Offer of end-to-end solutions in any industry.
4. Customers: Identification of customers with unmet or under-met needs.
5. Customer Experience: Redesign of all consumer touch points.
6. Value Capture: Creation of innovative new revenue streams.
7. Processes: Redesign of core operating processes to add efficiency and effectiveness.
8. Organisation: Change of form, function or activity scope of the company.
9. Supply Chain: Different strategies for sourcing and fulfilment.
10. Presence: Creation of new points of distribution or innovative points of presence.
11. Networking: Creation of network-centric intelligent and integrated offerings.
12. Brand: Leverage of brand into new domains.

They called this framework ‘the innovation radar.’ Use it to look at innovation in your organisation in a holistic manner.

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