Innovation Strategy

Strategy answers two simple questions: where to play, and howto win.

How can you put the world in your pocket?

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To help participants make sense of this framework we march through a familiar example. Remember how personal music used to work?

Step 1: Diagnose the Situation

In the waning years of the 20th century, the Sony Walkman defined music-on-the-go. The world celebrated Sony as the leading consumer electronics innovator of the era – great design for new experiences. Napster and other clever file-sharing services crept into a gray market of pirated music. Rather than grasp the inevitable transition and create their own innovation strategies, record companies unleashed hordes of lawyers to shut down sites and prosecute their own customers. Meanwhile, the first personal digital music players bloomed. The original iPod, showed up late in 2001, the sixth major mp3 player. Yet product generations later and morphed from standalone to smartphone, Apple reigned supreme.

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How is this possible?

Participants will be challenged to deconstruct this phenomenal disruption. How did the iPod win the market and go on to redefine industry after industry? No, it was not Steve Jobs’ force of will. Nor was it Apple’s legendary control of hard and software. Because the innovation was not the iPod. It was not the device. As charted in the 8-steps, the innovation strategy for the iPlatform began with a clear recognition of the changes underway in the world. They watched digital technologies evolving to threaten the accepted limits of the music industry. To Steve Jobs’ credit, and our benefit, he refused to accept those limits as immutable. His bold ambition fuels our next two steps.

Step 2: Declare Intent

State your intentions. Where others bellow, Apple whispers. A trusted inner circle huddled around this vision, on a need-to-know basis.

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“Put 1,000 songs in your pocket.”

Apple first tackled the barrier that competitors skipped. Design a way for consumers to access all the music they already owned. Compress piles of worn discs and tapes and vinyl into a single pack of cards. The iTunes “digital jukebox software” was launched in January 2001, fully eight months before the first iPod. iTunes represented the first wave in a Trojan Horse strategy. For the first time, music-lovers could build a digital catalog of the music they already owned. This wed them to Apple’s staged vision for the future. The software platform morphed to the iTunes store, complete with the earthquake innovation – buying one song at a time. Apple breached the record company cartel. One by one, the walls tumbled. iTunes spread from music to video, and came full circle music streaming, the next generation as a subscription model. (Folklore contrasts this tidal wave with the stunted vision Bill Gates revealed when, as CEO of Microsoft, he first encountered Apple’s new iPod. After turning it carefully, prying at the seams, toggling the touch dial, he dismissively dropped it with a satisfying clunk on his desk, sniffing “aww, it’s just a hard drive.”)

Step 3: Set Your Innovation Ambition

As in the noble work of the Gates Foundation, Bill Gates was technically right. But in this case he was also blindingly wrong. Lesser competitors than Microsoft have made the mistake of underestimating Apple’s ambition (though few have made it such a habit). The Apple Watch and the iPad Pro are only the latest in a long line of initial product launches to win skepticism or outright reproach. In the case of the iPlatform, the aspiration started by looking outside. The shift from analog to digital music was inevitable. Industry disruption was already underway in the digital black market. Jobs declared the intention to create a truly personal music experience – including ease, breadth and access, while giving the music industry a legal avenue to turn criminals back into customers. Participants learn to cast your innovation ambition in the voice of the customer:

“Put my entire music collection in my pocket. Make it available on demand – whenever and wherever I want it. Make it simple, intuitive, elegant and reliable.”

In other words, play to Apple’s core strength – design for end users. Simplify complexity. Weave the morass of technical chaos into an easy, welcoming package.&steps apple

Steps 4-6: Align the organization.

Apple mobilized a battalion of 200 lawyers to crack the record companies.

“Your mission – get one company to sell one song.”

Apple blew open the market for outside partners to extend the platform (and begrudgingly approved the most profitable piece of the puzzle, the App Store).

Steps 7-8: Pull the company to the future.

Apple chose their first focus areas and drafted a map of innovations to pursue. Those elements came together in your pocket. Nothing short of brilliant. Other examples demonstrate that innovation strategy is not the unique province of Apple. Market leaders like General Electric and Procter & Gamble, and relative upstarts from Amazon to Zara illustrate lessons in each of the eight steps.

From Apples to Oranges

That was just the warm-up act. Once participants have a working understanding of the process, we form teams to apply this method to your business. They begin to build your own innovation strategy—a roadmap to the future. We remind leaders that innovation strategies don’t need to be perfect. In fact there is no such thing as “right”. Just get it right enough to take action, and learn along the way.

Put aspirations into action

Your innovation strategy should complement your business strategy. Participants will plot a path to fulfill your declared aspirations. Plans alone mean nothing until you turn them into actions. Participants will commit to specific assignments, either during this session or in our work to follow, to build your portfolio of priority projects. Define, discover and design solutions.