The innovation ecosystem – infographic

The Innovation Ecosystem - infographicEvery business knows how important it is to capture and develop innovative ideas. Every business will tell you it is a priority to focus on innovation and high on everyone’s agenda. However, in reality not many companies can honestly claim to do innovation well. Maintaining their innovation ecosystem is one of the common characteristics amongst those companies that do.

There are three main components of an organisation’s innovation ecosystem. Getting the balance right between these three components is crucial:

1) Balance/Mix of innovation types

2) Structure (process, capabilities, culture, funding)

3) Metrics & tracking

In this article we explore how to define what the right mix of innovation types is for your business.

Finding the right mix of innovation for your business

There is no one size fits all solution, the right mix depends on your business and your innovation needs. However, there are some really useful rules of thumb that will help to guide you. In finding the right mix you need to first of all define the different types of innovation and ideas that you have. Our take is borrowed from Igor Ansoff’s classic management model on where and how to allocate funds to growth within a business.

In this definition there are three hierarchical levels of innovation within the business innovation ecosystem. This is probably as simplistic as you can reduce your innovation portfolio down to;

1) Core innovation:

In most businesses the largest amount of effort (c.70%) in terms of time and resource will be given over to ideas and innovation within this category. These are typically more incremental improvements to existing products or services to optimise the delivery, return and experience for the existing customers.

2) Adjacent innovation:

Innovation involves an increasing level of risk as we move away from the core. This type of innovation can be very complex and result in high failure rates. Can involve taking existing products to new markets or, more commonly, developing value-add products or services to existing core propositions.

3) Transformational innovation:

Being the highest risk of all the innovation categories transformational innovation can take up a huge amount of time, even be a distraction, and often be costly. In this category organisations will be looking for new products and services, new markets – big changes to the business. This type of innovation is more popular with early stage and highly innovative businesses.

Not many organisations are able to be good at all three of these innovation types. Those that are successful at all three manage to get the mix and delivery right by respecting the very different requirements of each type of innovation and by having strategies and operational processes to support each.

  • Do you know what processes and tools are required to support each of these innovation types?
  • Do you have these processes and tools in place?
  • Do you know what skills you will need to develop within your workforce to deliver these types of innovation?
  • Does your organisational culture support all these types of innovation?

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Simon Hill is CEO and co-founder of Wazoku, an idea software company, an Associate Director with the Venture Capital Firm FindInvestGrow and an active member of the London technology and entrepreneurial community.

Simon Hill




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No Comments

  1. Grant Millin on September 8, 2012 at 4:17 pm

    Something called an Innovation Ambition Matrix was discussed in the May 2012 issue of Harvard Business Review. I see no Deloitte references. The HBR article covered basically all these principles covered here by Simon. There have been a few other very recent HBR and other academic journal articles on innovation ecosystems, but not much.

    It’s a good concept, but the original HBR article only explains good innovation portfolio thinking. But even with the original HBR article, innovation ecosystems are not explained with much detail, except in partial way looking internally rather than at partnerships and collaborations.

    Also, I think throwing around the term innovation ecosystem weakens a very needed concept. An innovation portfolio is pretty much along the lines of doing strategic alignment with projects and defining ones project portfolio. So the HBR article pulls in some marketing and innovation management ideas into program and project management ideas.

    There’s some better literature on innovation ecosystem thinking that thankfully stretches beyond the walls of Porter’s cluster theory and university technology commercialization. While there’s plenty more that needs to be worked out on this subject, I’m sorry Simon, but this does not seem to be a very well organized or even original posting.

  2. Mari Anixter on September 10, 2012 at 2:30 pm

    Grant, thank you very much for your comments, and also pointing me in the direction of the HBR article “Managing Your Innovation Portfolio” by Bansi Nagji and Geoff Tuff (May 2012). I am not aware that Simon Hill was aware of the HBR contributors’ inclusion of an “Innovation Ambition Matrix.” Although, I do see that Hill, like Nagii and Tuff, reference Igor Ansoff classic model (info graphic). We did include the image credit: at the end of the article, as is our policy to attribute all images, we also cite articles and provide hyperlinks. It is a vigilant practice that requires editorial attention!

    Innovation Excellence, and I believe I speak for our contributors as well, invites debate and conversations, locally, regionally, globally. Our intent always is invite meaningful conversations, point-of-view and opinions; and to expand our community and contributors in the process. We welcome you to contribute an article on innovation ecosystem thinking, or any innovation topic that deeply interests you!

    Our thanks again for sharing your voice and concerns.

    Mari Anixter
    Managing Editor, Innovation Excellence.

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