In today’s rapidly evolving business landscape, the imperative for innovation has never been more clear. Leaders across industries understand that the key to relevance and sustainability lies in continuous adaptation and evolution. In fact, Miro’s global innovation survey reveals that nearly all enterprise leaders believe a company will become extinct if it fails to innovate — so the clock is ticking.
Yet despite understanding these high stakes, a majority of leaders believe that innovation is more of a luxury than a necessity, particularly during uncertain times. This presents a glaring contradiction: While organizations recognize the existential threat of stagnation, many struggle to prioritize innovation amid the pressures of day-to-day operations.
As the renowned author and self-described “wizard philosopher” Jason Fox explains, in today’s pursuit of efficiency we have inadvertently stifled progress. That’s because this narrow focus on productivity actually makes it harder to innovate meaningfully — and the problem only gets worse over time. This sentiment echoes Peter Drucker’s warning about the perils of feeding yesterday at the expense of starving tomorrow.
If, as a leader, you feel like you’re stuck in this path, there’s still time to course correct. Below we’ll cover how you can balance risk with reward and embrace an ethos of experimentation at your organization. By taking a more holistic view of innovation, which includes not just products and services, but pricing models and ways of working, you’ll be able to unlock new growth opportunities with confidence.
Let’s get started.
Step 1: Map the risk vs. return of your current business model
To kick off this process, begin by mapping your existing business model(s) by their disruption risk and return profile using the Disruption Risk Assessment tool. Then, leverage Strategyzer.com’s Portfolio Map template from Miroverse, using your score to determine where your business model sits in the Exploit portfolio quadrant on your Portfolio Map.
With these results, your executive team will have a shared understanding of the current state of your existing business models, including areas of potential (or necessary) improvement. Equipped with this new knowledge, you can explore how to improve them using Business Model Patterns.
Step 2: Explore future profit engines
Next up, let’s turn our attention to inventing future profit engines. We’ll dive into this topic in detail in an upcoming post, but for now you can start by exploring five potential sources of future profit engines:
- Implement an idea that’s already worked somewhere else, such as in a different sector or company. For example, James Dyson got the key inspiration for his bagless vacuum cleaner design from observing industrial cyclones at a local sawmill.
- Leverage emerging technologies to provide a new solution. Netflix saw high speed internet adoption and the potential of on-demand internet streaming and became one of the pioneers of this technology.
- Adapt to environmental changes like macroeconomic shifts or new policies or regulations. Tesla was an early mover in the electric vehicle market, recognizing the potential impact of tightening environmental regulations and policies aimed at reducing emissions from transportation.
- Apply innovation theory to tap into a new market. Online education platforms like Coursera, edX, and Udacity disrupted traditional higher education institutions by offering affordable and accessible online courses.
- Explore collaboration and partnerships for innovation. Lego leveraged open innovation by creating the Lego Ideas platform, which allows fans to submit and vote on new product ideas. The best ideas are then produced and sold as limited editions by Lego.
Step 3: Examine your innovation risk
Once you have a portfolio of new initiatives, add them onto the Explore quadrant on your Portfolio Map. Their position will vary based on the expected return versus anticipated risk. Remember: innovation risk is low when you have clear evidence to support the desirability, viability, and feasibility of the project. If you have little beyond slides or spreadsheet models, assume it’s a higher-risk endeavor.
After mapping these initiatives, it’s time to dive in. The team can help increase the expected return by improving business models and, at the same time, use experimentation and iteration to reduce the potential innovation risk. Tools like The Right It Canvas from Mirovese can facilitate this stage.
Step 4: Invest strategically, but cast a wide net
As you move forward in this process, remember that the aim is to invest a small amount in a large number of initiatives. Make investment decisions based on traction — and retire projects that aren’t performing.
Identifying what needs to be true to achieve your business outcome helps you re-risk ideas, shelve others, and free up resources to dedicate toward the best bets. The faster you can run experiments, the more experiments and ideas you can test.
To support a culture of innovation, tap into the proven dynamics and mechanics of startups and venture funders through a venture builder model. This will help ensure that the best ideas take priority — which also brings big benefits for teams, because who doesn’t love to work on a winning project with demonstrated impact?
Innovate strategically to move at the speed of change
Innovation is no longer a choice but a necessity for survival in today’s dynamic business landscape. By adopting a strategic approach to innovation, grounded in experimentation and risk management, organizations can navigate uncertainty with confidence and chart a course toward sustainable growth and relevance.
It’s time to embrace the challenge, unlock your creative potential, and build a future that positions you as a market leader.
This is the first in a series of articles from Miro’s innovation evangelist on how to get innovation done. Stay tuned for more!
