Geoffrey Moore on Business Innovation
So I’ve been thinking a lot about the topic of “business innovation” lately. With the pace of change in technology and business occurring in our world today, formally promoting and managing innovation within the enterprise is really not even an option anymore.
Ken Lerer’s speech to the Columbia School of Journalism, that I blogged about here, also made an impact on me. His comments on the failure of the traditional newspaper industry to manage disruptive change and innovate upon its traditional business model really struck home, as did his comment that ALL media companies are now technology companies.
For 2 decades, one of the most insightful pundits on business innovation has been Silicon Valley-based tech consultant Geoffrey Moore (although his Wikipedia writeup is somewhat sparse). Some of his most influential books are Crossing the Chasm, Inside the Tornado, and his most recent book Dealing with Darwin. Much of his work has involved insights around the Technology Adoption Lifecycle, and the impact this cycle has on technology-based business strategies.
Geoffrey Moore on Business Innovation
While early in his career – in both Crossing the Chasm and Inside the Tornado – Moore focused largely on emerging technology business strategies , more recently he has looked at developing models and frameworks for helping incumbent businesses manage technological change and its impact to business strategy.
Such is the case with his most recent book, Dealing with Darwin: How Great Companies Innovate at every Phase of their Evolution. An excellent introduction to the concepts introduced in Dealing with Darwin can be found in here, in a talk that Moore delivered to Microsoft staff in December 2005. Without going into any great detail, I’m going to post a few slides from the talk to whet your appetite to view the video, and explore Moore’s ideas in more detail.
Do the right type of Innovation – focus on ROI
More begins by pointing out that not all Innovation actually contributes to ROI. In fact, Innovation that does not result in products and services which differentiate the business or streamline costs can be wasteful. Here’s how Moore tells it:
Waves of Innovation and Business Strategy
Innovation, from Moore’s perspective, happens in a context he calls the Innovation landscape.
The key message here is that companies, like applications and products, ride waves of innovation. And that the right business strategy for a company depends on where they are positioned in terms of the innovation waves taking place in their industry, and how they are positioned to ride the particular innovation wave they are facing.
Moore makes the case that there are different types of innovation, that may be placed in 4 key areas, which he calls Innovation Zones:
As you can see from the diagram above, these Zones are (i) Product Leadership, (ii) Customer Leadership, (iii) Operational Excellence, and (iv) Value Renewal. I don’t want to get too deep into the theory here, but Moore’s key point is that different types of Innovation happen in these 4 zones, and that different types of Innovation are appropriate for different companies depending on the unique characteristics of the company, and where they are positioned in the overall Innovation Cycle in their industry.
Types of Innovation
As I mentioned above, these 4 differrent Innovation Zones contain different types of Innovation. Here’s how Moore characterizes the types of Innovation that happens in these 4 areas:
Again, I don’t want to explore the different types of Innovation that Moore characterizes in the visual. The point is that there are different types of innovation, and that a company should consciously evaluate and execute the type of innovation it elects to pursue.
Cycle of Innovation
OK, one more slide. In Dealing with Darwin, Moore also discusses the importance of both (i) allocating resources to innovate new products and markets, while (ii) harvesting core markets and products, and (iii) streamlining mature business operations to reallocate resources to new product/business model innovation. Again, there’s a lot to this, but the slide below illustrates how Moore views this so-called Cycle of Innovation:
Geoffrey Moore’s talk at the Midsize Enterprise conference in LA in September
Finally, a colleague of mine had a chance to hear Moore speak at the
Midsize Enterprise Summit in Los Angeles in September of this year. If you’d like to view the webinar of his presentation, you can find it here.
In Summary …
Provocative stuff from Geoffrey Moore. I’m very passionate about this topic, so if anyone has any questions, comments, or ideas, I’d be very interested to hear.
All for now.