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Control the Risk, Radically Innovate December 15, 2009

Posted by Carlos Lievano in Design-related Books, [Books] Ways of Thinking.
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On his book titled Design-Driven Innovation, Roberto Verganti, an Italian researcher, talks about common threads in radical innovation. He very rarely mentions the most common type of innovation, which is the incremental one. In the world of innovation, game-changing radical innovations are followed by a continuous series of small and incremental innovations. These smaller innovations can be done by the creators of the original innovation, or they can be done by the competition.

For these reason, radical innovations tend to be the ones that change the rules of competition, and can present a company with an opportunity to define and capture a market. For an example, think of the iPod and iTunes platform developed by Apple. At the time, many other digital players were already in the market, but the radical innovation in content access coupled with a simple interface, allowed Apple to dominate such market. However, if you look at the devices throughout the years, you can see that a big deal of their evolution is minor improvements to the original device: incremental innovation.

Successful companies do both. Radical innovation takes longer periods of time to achieve, while are riskier to undertake, as often the ideas aren’t proven by any market. As stated in one of the first anecdotes accounted in the book, the CEO of a company focused on radical innovations was quoted saying “Market? What market? We do not look at market needs. We make proposals to people.” There you have it, risk at its prime, with the uncertainty of proposal rejection.

However, the book claims that this isn’t an uncontrollable risk, allowing companies to increase their expenditure in radical innovation, or design-driven, as the book calls it. The book uses a three step process to achieve this. The first step is listening, in particular to what Verganti calls the Interpreters. These are people that are in business or knowledge domains that are related to those pursued by your own organization, and present you with an opportunity to create, validate, and reinforce your vision of the way people are going to give meaning to your products within the socio-cultural and technological context. The step of coming up with your own meaning proposal is the next step, and the book calls it the interpreting step. The cycle is closed with an addressing step, where you search for the proper means to communicate your proposal to the people the company will try to address with the innovation.

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